Bangladesh Private Sector Assessment

A Preliminary Scoping Study

The primary objective of the study is to provide a broad-based overview of the private sector in Bangladesh as a stakeholder in combating modern slavery in the country

PB The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 1 The Mekong Club 1. Contents

The Mekong Club is a catalyst 2. Objectives of the Study 4 7.2.6. Beximco Group 19 for change – engaging, inspiring and supporting the private 7.2.7. Square Group 20 sector to eradicate slavery from 3. Definition of Terms 5 7.2.8. City Group their business. Given that the 20 majority of modern-day slavery 4. Demographic Overview & Key Social Trends 6 7.2.9. Partex Group 20 exists in the private sector, these companies are ideally placed to 4.1. Population Distribution 6 7.2.10. Ananda Group 20 help turn the tide of this global epidemic. 4.2. Social Indicators 8 7.3. Top 200 Companies 20 4.2.1. Human Development Index (HDI) 8 7.4. Transparency 21 The only organisation of its kind, The Mekong Club steers away 4.2.2. GINI Coefficient 9 from the approach taken by other 4.2.3. Poverty Rate 8. The Mekong Club Target Sectors 22 players in this space, which is to 9 ‘name and shame’ companies – 8.1. Agriculture 22 ousting bad behaviour or issues 5. The Labour force 10 8.1.1. General related to this subject. Instead, 22 5.1. Employment and Income 10 we believe in starting and ending 8.1.2. The Shrimp and Fishing Industries 24 with collaboration. 5.1.1. Employment Distribution 10 8.2. FMCG Retail 24 5.1.2. Informal employment In fact, The Mekong Club 13 originally formed as a direct 5.1.3. Unemployment 13 8.3. Manufacturing 25 response to the growing 5.1.4. Income 14 8.3.1. General 25 number of companies looking to develop strategies to address 5.2. Gender Gap 15 8.3.2. Garment and Textile Industry 28 forced labour risk through a 5.3. Comparative Minimum Wage 15 8.3.3. Major Players 28 professional forum. Divided into industry-specific working groups, 5.4. Migrant Labour 16 8.4. Banking Industry 31 these networks meet regularly to learn, share best practices, 6. Political Risk Assessment 17 and network with other like- 9. Modern Slavery in Bangladesh 33 minded professionals. Member 9.1. Overview 33 companies also work together 7. The Private Sector 18 to achieve an annual deliverable 7.1. Overview 18 9.2. Highlights from US Trafficking Report 2017 34 which will work towards producing tangible results in the 7.2. Top 10 Conglomerates in the Private Sector 18 9.2.1. General 34 fight against forced labour. 7.2.1. PRAN-RFL Group 18 9.2.2. Migrant Labour 34 7.2.2. ACI Group 19 9.2.3. Rohingya Crises 35 7.2.3. Navana Group 19 9.3. Child Labour 35 7.2.4. Abul Khair Group 19 7.2.5. Bashundhara Group 19

2 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 3 2. Objectives of the Study 3. Definition of Terms

The primary objective of the study is to provide a broad- Throughout the report the following definitions will apply to the use of the terms based overview of the private sector as a stakeholder in human trafficking, forced labour, bonded labour and contract slavery, as specified by combating modern slavery in the country. More specifically The Mekong Club. the study aims to generate a knowledge base from which The Mekong Club can approach the private sector in order FORCED BONDED LABOUR HUMAN TRAFFICKING to create awareness and offer cooperative solutions for the LABOUR AND CONTRACT SLAVERY eradication of modern slavery in corporate supply chains; the core focus of the Mekong Club’s mission. An act (1) carried out by a All work or service which is Bonded labour begins when a third party, through different extracted from any person worker borrows money from The following secondary objectives specify the details of means (2), for the purpose of underthe menace of any an employer and commits the data that need to be gathered in order to fulfil the exploitation (3). penalty and for which the themselves to work person has not offered for the employer in return. For children under age 18 it is scope of the study: themselves voluntarily. sufficient to demonstrate Contract slavery involves the act of moving a child for deceiving or illegal contracts the purpose of exploitation. signed by victims who cannot understand them,and used to justify forced labour.

1. Act of: Threat of penalty Common features of Bonded • Give an overview of the demographic landscape • Recruitment • Physical and/or sexual Labour and economic conditions in Bangladesh • Transportation violence. • Transfer • Imprisonment or physical • The employer manipulates • Harbouring confinement. interest rates or charges • Detail the characteristics of the labour force in • Receipt • Withholding of wages, excessive rates. Bangladesh by looking at factors such as size, unreasonable fees or financial • The employer imposes average income, distribution, key issues 2. By means of: penalties. high charges for • Threat • Withholding of identity food, accommodation, • Provide a detailed analysis of the private sector • Force or coercion documents. transportation, or tools. • Abduction • Unfair dismissal or exclusion • The employer charges in terms of size of industries, number of workers • Fraud from future employment. workers for shortfalls in and key players • Deception • Deprivation of food or shelter. business output or days • Abuse of power • Exclusion from community, missed due to worker • Provide in-depth reports on the Banking/finance, • Abuse of vulnerability social life or denunciation to sickness. Manufacturing, Agriculture and Retail community/family. 3. For the purpose of: • Intimidation and other threats. Common features of Contract • Exploitation Slavery • Identify the current state of modern slavery in • Slavery or similar practices Lack of Valid Consent • Contracts are in a language Bangladesh • Servitude • Worker deceived about the the victim does not • Prostitution wages they would receive. understand. • Removal of organs • Worker cannot leave • Contracts are presented to • Forced labour and service employment as they must victims who cannot read. remain for an undefined period • Victim is told fines and to repay debts to employer. penalties will follow if he • Worker made to work by breaks the contract. family. • Deception or fraud during recruitment stages.

HUMAN TRAFFICKING FORCED LABOUR BONDED LABOUR emphasizes the movement of is often a consequence victims of human trafficking and CONTRACT SLAVERY emphasizes are two forms of forced labour the exploitative condition the victim suffers

4 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 5 4. Demographic Overview & Key Social Trends

4.1 Population Distribution The last official census in Bangladesh was conducted in 2011 and according to the Statistical Yearbook 2016 the total population of the country was estimated at 144,043,6971 in that year. The World Bank estimated the population at 162,95 million in 20162. The population is evenly split between males and females. The rural population constituted 64.95% of the total population in 2016, down from 76.41% in 20003 The age distribution of the Bangladeshi population is skewed to the youth, with more than 50% of the population being under the age of 30 years6 Population Distribution by Gender and location in 2016

2016

Total 162,951,560

Male 50.06% Population Pyramid 2016 Female 49.94% Male Female 100+ 0.0% 0.0% Rural 64.95% 95-99 0.0% 0.0% 90-94 0.1% 0.1% 85-89 0.1% 0.2% 80-84 0.3% 0.3% At 1237 people per sq. Km (in 2015)4 Bangladesh is one of the most densely populated countries 75-79 0.5% 0.5% in the world. The population is distributed regionally as follows: 70-74 0.7% 0.7% 65-69 0.9% 0.8% Population Distribution by Province in 20115 60-64 1.1% 1.1% 55-59 1.8% 1.7% 50-54 2.4% 2.4% Total Population 144,043,697 45-49 2.8% 2.8% 40-44 3.2% 3.2% Barisal Division 8,325.666 35-39 3.7% 3.9% 30-34 4.1% 4.3% Chittagong Division 28,423,019 25-29 4.4% 4.5% 20-24 4.8% 4.6% Dhaka Division 47.424,418 15-19 5.0% 4.8% 10-14 5.0% 4.8% Dhaka City (12,043,977) 5-9 4.8% 4.6% 0-4 4.7% 4.5% Sherpur (13,583,225) 10% 8% 6% 4% 2% 0% 2% 4% 6% 8% 10% Khulna Division 15,687,759 Rajshahi Division 18,484,858 Rangpur Division 15,787,758

Sylhet Division 9,910,219

1. http://bbs.portal.gov.bd/sites/default/files/files/bbs.portal.gov.bd/page/b2db8758_8497_412c_a9ec_6bb299f8b3ab/ 4. https://tradingeconomics.com/bangladesh/population-density-people-per-sq-km-wb-data.html StatisticalYearBookFinal2016.pdf 5. http://bbs.portal.gov.bd/sites/default/files/files/bbs.portal.gov.bd/page/b2db8758_8497_412c_a9ec_6bb299f8b3ab/ 2. https://data.worldbank.org/country/bangladesh?view=chart StatisticalYearBookFinal2016.pdf 3. https://data.worldbank.org/indicator/SP.RUR.TOTL.ZS?locations=BD 6. https://www.populationpyramid.net/bangladesh/2017/

6 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 7 4.2. Social Indicators Bangladesh’s HDI Value and component measures compared to countries in the SEA region 11 4.2.1. Human Development Index (HDI)

According to the UNDP Human Development Report of 20167, “Bangladesh’s HDI value for 2015 is HDI HDI Life Expected Mean GNI Per IHDI 0.579— which put the country in the medium human development category—positioning it at 139 out Expectancy years of Years of Capita Value Rank at birth schooling Schooling (PPP USD) Value of 188 countries and territories.”The Human Development Index (HDI) is a statistic measuring human 8 development based on life expectancy, education, and per capita income indicators . Vietnam 0.683 115 75.9 12.6 8 5,335 0.562 In its overview of the country, the World Bank9 states that “Bangladesh has made substantial progress Bangladesh 0.579 139 72.0 10.2 5.2 3,341 - in reducing poverty, supported by sustained economic growth…However, sustained growth has rapidly increased the demand for energy, transport and urbanization.” Philippines 0.682 116 68.3 11.7 9.3 8,395 0.556

Bangladesh Human Development Index (HDI) Thailand 0.740 87 74.6 13.6 7.9 14,519 0.586 Indonesia 0.689 113 69 12.9 7.9 10,053 0.563 Life Expected GNI per expectancy years of Mean years capita HDI Value China 0.738 90 76 13.5 7.6 13,345 ** at birth schooling of schooling (2011 PPP$) Malaysia 0.789 59 74.9 13.1 10.1 24,620 ** 58.4 5.7 2.8 1,286 0.386 1990 Cambodia 0.563 143 68 10.9 4.7 3,095 0.436 61.9 6.6 3.3 1,435 0.423 1995 Myanmar ------2000 65.3 7.5 4.1 1,679 0.468 East Asia & 0.720 74.2 3,423 0.617 12,125 0.581 Pacific - 2005 68.0 8.4 4.5 2,036 0.506 70.1 9.4 4.9 2,652 0.545 Medium 0.631 68.6 4,314 0.655 6,281 0.469 2010 HDI - 2011 70.5 9.9 5.1 2,784 0.557

2012 70.8 10.0 5.2 2,943 0.565 4.2.2. GINI Coefficient

2013 71.2 10.0 5.2 3,071 0.570 The distribution of inequality is further illustrated through the GINI coefficient, which is calculated at 32.1 for the year 201312. Bangladesh’s low GINI Coefficient (0 = equality) indicates that the low income that is 2014 71.6 10.2 5.2 3,179 0.575 generated (See GNI per capital above) is equally shared among the population. 2015 72.0 10.2 5.2 3,341 0.579 4.2.3. Poverty Rate

In South East Asia, Bangladesh ranks only higher than Cambodia on the HDI. It has the lowest expected According to the World Bank13 ,“based on the international poverty line of $1.90 per person per day, years of schooling (10.2) and only marginally outranks Cambodia on life expectancy and GNI per capita. Bangladesh reduced poverty from 44.2 percent in 1991 to 18.5 percent in 2010, and is projected to decrease to 12.9 percent in 2016.”. The World Bank further notes that “while the poverty reduction efforts to date have been extraordinary, Bangladesh faces daunting challenges with about 28 million people still living below the poverty line. The country is at an important juncture, when with the right policies and timely action, it can move up within the middle-income bracket.”

7. UNDP: Human Development Reports – Bangladesh 8. Wikipedia; see also UNDP 11. UNDP: Human Development Report 2016: Human development for everyone 9. http://www.worldbank.org/en/country/bangladesh/overview 12. UNDP: Human Development Reports 13. http://www.worldbank.org/en/country/thailand/overview 8 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 9 Distribution of employed population aged 15 or older, by occupation, sex 5. The Labour force and area16

5.1. Employment and Income Rural Urban Total M F Tot M F Tot M F Tot 5.1.1. Employment Distribution Manager 1.1 0.3 0.8 5.4 2.1 4.5 2.3 0.7 1.8 According to the Quarterly Labour Force Survey 2015- 201614, Professionals 3.8 3.3 3.7 6.9 12.3 8.3 4.7 5.6 4.9 “the country’s labour force (aged 15 or older) experienced dramatic changes over the past decade and Technicians and Associated increased at a per annum average of 3.3 per cent, to around 58.8 million workers in 2015. The youth 1.7 0.6 1.3 4.1 1.8 3.5 2.4 0.9 1.9 labour force participation rate decreased slightly, reflecting a positive trend of youth staying longer in Professionals the education system.” Clerical Support Workers 1.3 0.4 1.0 3.1 1.6 2.7 1.8 0.7 1.5 The agricultural sector provides employment to 42.7% of the economically active population. Service and Sales Workers 17.4 2.5 12.7 28.6 7.3 22.9 20.6 3.7 15.6 Women account for 29.8% of the total labour force and are still confined mainly to occupations in the agricultural sector. The majority of occupations (72.2%) are found in what is classified as rural areas. Craft and Related Trades 15.2 10.8 13.8 20.5 27.5 22.3 16.7 14.9 16.2 Technicians and Associated 32.5 62 41.6 7.4 16.9 9.9 25.2 50.8 32.8 Employed populations aged 15 or older, by economic sector, Professionals 15 sex and area Plant and Machine Operators and 8.3 1.9 6.3 11.6 8.2 10.7 9.3 3.5 7.5 Assemblers Rural Urban Total Elementary occupations 18.6 18.3 18.5 11.9 22.3 14.7 16.7 19.3 17.4 M F Tot M F Tot M F Tot

Agriculture 21.9 17.2 39.1 2.0 1.6 3.6 23.8 18.8 42.7 Agriculture, manufacturing and retail are the biggest industries in Bangladesh. This report will prioritize these industries for further investigation. Women are proportionally equally represented in manufacturing Industry 9.9 2.3 12.3 5.7 2.5 8.2 15.7 4.8 20.5 when compared to men, but under represented in the service sector and over represented in agriculture. Service 18.0 2.9 20.9 12.6 3.3 16.0 30.7 6.2 36.9 Total 49.8 22.4 72.2 20.3 7.4 27.8 70.2 29.8 100.0

14. http://bbs.portal.gov.bd/sites/default/files/files/bbs.portal.gov.bd/page/96220c5a_5763_4628_9494_950862accd8c/QLFS_2015.pdf 16. Ibid 15. Ibid

10 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 11 Employed population aged 15 or above, by major industry, sex and area17 5.1.2. Informal employment

A key characteristic of the Bangladesh labour market is the contribution of the informal sector. In total Rural Urban Total 86.2% of employment are classified as being informal. According to the Quarterly Labour Force Survey 2015- 2016 : M F Tot M F Tot M F Tot Agriculture, forestry and “The operational (statistical) definition for informal employment in Bangladesh was a combination of fishing 43.9 76.7 54.1 9.7 22.1 13.0 34.0 63.1 42.7 both the informal character of the individual job as well as employment in the informal sector: Mining and quarrying 0.3 0 0.2 0.1 0 0.1 0.2 0 0.2 1. All individual job-based informal employment – operationally comprises all employed persons in the non-agriculture sector, both wage and salaried workers (employees) with no pension or no Manufacturing 12.3 9.2 11.3 19.0 32.1 22.5 14.2 14.9 14.4 contribution to a retirement fund; Electricity, gas, steam and AC 0.2 0 0.1 0.4 0.1 0.3 0.2 0.1 0.2 2. All contributing family workers; Water Supply, sewerage, waste 3. All employers and own-account workers in the informal sector enterprises (operationally defined in 0.1 0 0.1 0.2 0.1 0.2 0.1 0 0.1 management Bangladesh as all private unincorporated enterprises engaged in non-agriculture work that do not have any registration); Construction 7.1 1.1 5.2 8.5 1.1 6.5 7.5 1.1 5.6 4. All own-account workers employed in a private household.” Industry Subtotal 19.9 10.3 17.0 28.1 33.4 29.5 22.3 16.1 20.5 Wholesale and retail trade, repair 15.0 1.8 10.9 25.2 4.5 19.7 18.0 2.5 13.4 This indicates that the majority of workers lack the basic social or legal protection afforded to jobs in the formal sector. This lack of access to a legislative framework exposes the majority of the labour force to Transportation and storage 9.5 0.5 6.7 13.6 1.2 10.3 10.3 0.7 7.7 risks such as exploitative working conditions, forced labour and trafficking. Accommodation and food service 1.8 0.3 1.4 3.0 1.4 2.6 2.1 0.6 1.7 activities Employed population aged 15 or above, by formal/informal 19 Information and communication 0.1 0.1 0.1 0.9 0.4 0.8 0.4 0.1 0.3 employment, sector and area Financial and insurance activities 0.4 0.1 0.3 2.0 1.3 1.8 0.8 0.4 0.7 Rural Urban Urban Real estate activities 0.1 0.0 0.1 0.5 0.1 0.4 0.2 0 0.2 Formal InFormal Total Formal InFormal Total Formal InFormal Total Professional, scientific and technical 0.4 0.1 0.3 1.1 0.5 0.9 0.6 0.2 0.4 Agriculture 1.1 53.0 54.1 0.4 12.5 13.0 0.9 41.8 42.7 Administrative and support service 0.5 0.1 0.4 1.5 0.5 1.2 0.8 0.2 0.5 activities Industry 1.6 15.4 17.0 3.3 26.2 29.5 2.0 18.4 20.5 Public administration and defense 1.4 0.3 1.1 3.8 1.6 3.2 2.1 0.6 1.7 Service 8.0 20.9 29.0 18.1 39.4 57.5 10.8 26 36.9 Education 2.8 3.0 2.8 4.0 10.1 5.6 3.1 4.8 3.6 Total 10.7 89.3 100 21.9 78.1 100 13.8 86.2 100 Human health and social activities 0.6 0.5 0.5 1.3 2.6 1.7 0.8 1.0 0.9 Arta, entertainment and recreation 0.1 0.1 0.1 0.2 0.1 0.2 0.1 0.1 0.1 5.1.3. Unemployment

Other service activities 3.1 4.0 3.4 3.8 7.9 4.6 3.3 4.9 3.8 The overall estimated unemployment rate (defined as the unemployed as a percentage of the labour Activities of households as employer 0.3 2.1 0.9 1.2 12.3 4.2 0.6 4.7 1.8 force) was 4.2 per cent. The youth, aged 15-17 and 18-24 years (more than10.0 per cent), had the highest unemployment rate. This increases the risk of the young being exploited by traffickers. Family Services Subtotal 36.2 12.9 29.0 62.2 44.5 57.5 43.7 20.8 36.9 responsibilities and other pressures to get work may further increase the possibility of being trapped in Total 100 100 100 100 100 100 100 100 100 slavery conditions.

17. Ibid 18. Ibid 19. Ibid

12 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 13 Unemployment rate20 5.2. Gender Gap

Rural Urban Total According to a World Economic Forum report, Bangladesh ranked 72nd, out of 145 countries measured on its Gender Gap index22 with a score of 0.698. Although not reflected in the official income figures, M F Tot M F Tot M F Tot the Gender Gap index estimate that females comparatively only earn 40% of wages that males earn. Overall, Bangladesh scored higher on gender equality than all the other countries in South Asia, indicating 15-17 10.1 14.1 10.9 9.7 9.0 9.5 10.0 2.0 10.5 significant improvements despite consistent weaknesses. 18-24 8.9 12.2 10.0 9.1 12.8 10.4 8.9 12.4 10.1 5.3. Comparative Minimum Wage 25-29 4.8 9.8 6.5 5.6 10.7 7.3 4.9 10.0 6.7 Compared to the rest of Asia, Bangladesh’s current minimum wage structure is the lowest in Asia 30-64 0.9 4.0 1.9 1.1 4.8 2.0 1.0 4.2 1.9 (excluding India). 65+ 0.6 2.5 0.8 0.7 2.2 0.9 0.6 2.4 0.9 Total 2.9 6.5 4.1 3.2 7.7 4.4 3.0 6.8 4.2 Comparative Minimum Wages in Selected Countries in Asia(As of 30 June 2017)23

5.1.4. Income Daily Minimum Wage Monthly Minimum Wage Exchange Country/City In Country In Country Rate The estimated average monthly income of paid employees in 2015-16 was Tk. 12897 or 156 USD. On Currency In US$ Currency In US$ Per US$1* average, females earn 1000-2000 Taka (12 USD) less than males across all industries. The gender gap is most pronounced in Skilled Agricultural, Forestry and Fisheries and Elementary Occupations. The average Bangladesh 176.67 b/ 2.23 5,300.00 1/ 66.88 79.2430 (Taka) income in urban areas are significantly higher than in rural areas. Mongolia 6,400.00 a/ 2.73 192,000.00 2/ 81.95 2,342.8400 Managers (326 USD) and Professionals (256 USD) are paid the highest salaries, while agricultural workers (Tugrik) are paid the lowest (119 USD). Myannmar 3,600.00 a/ 2.68 108,000.00 3/ 80.32 1,344.6100 (Kyat) Average monthly income from employment (wage/salary), Lao PDR 30,000.00 a/ 3.71 900,000.00 4/ 111.39 8,079.9800 by occupation,sex and area21 (Kip) Pakistan a 10,000.00- 96.62- 333.33-400.00 / 3.22-3.86 12,000.00 5/ 115.95 103.4940 Rural Urban Total (Rupee) Cambodia 18,666.67 a/ 4.67 560,000.00 6/ 140.00 4,000.0000 Male Female Total Male Female Total Male Female Total (Cambodia Riel) Vietnam 103,333.33- 3,100,000.00- 138.07- a 4.60-5.20 7 22,452.4000 Manager 18029 17102 17937 31128 29602 30907 26966 26714 26933 (Region I & II Dong) 116,666.67 / 3,500,000.00 / 155.89 Professionals 19402 18179 19056 24864 21355 23465 21803 19986 21187 Philippines/XI 340.00 8/ 6.74 10,200.00 b/ 202.20 50.4451 (Peso)

Technicians and other 15447 15209 15407 19427 17385 19070 17601 16411 17396 Philippines/VII 9 9,240.00- 183.17- 308.00-366.00 / 6.11-7.26 b 50.4451 (Peso) 10,980.00 / 217.66 Clerical Support 13036 11471 12863 17825 15237 17397 15534 13863 15300 Philippines/III 10 9,870.00- 195.66- 329.00-380.00 / 6.52-7.53 b 50.4451 Service and Sales 12374 12742 12401 13548 12794 13454 12911 12773 12897 (Peso) 11,400.00 / 225.99 Philippines/IV-A 11 8,790.00- 174.25- 293.00-378.50 / 5.81-7.50 b 50.4451 Skilled Agric, For. & Fish. 10054 8558 9825 10499 9267 10333 10096 8616 9872 (Peso) 11,355.00 / 225.10 Craft/Trade 11699 10432 11477 12630 11015 12098 12058 10777 11748 Operators and Assembler 11838 11081 11712 13282 10971 12598 12517 11009 12166 Elementary occupations 9388 8324 9211 10316 8570 9535 9548 8436 9289 20.21. Ibid Other Occupations 18236 17336 18194 20225 16506 20110 19058 17077 18978 22. http://reports.weforum.org/global-gender-gap-report-2016/ Total 11635 10988 11527 15945 13021 15066 13127 12072 12897 23. http://www.nwpc.dole.gov.ph/pages/statistics/stat_comparative.html

14 The Mekong Club Bangladesh Private Sector AssessmentThe Mekong Club Vietnam Private Sector Assessment 14 The Mekong Club Bangladesh Private Sector Assessment 15 Indonesia 6. Political Risk Assessment (Jakarta-Jawa-Timur- 38,333.33- 1,150,000.00- 86.52- Surabaya) (Rupiah) a 2.88-7.77 13,291.8000 103,333.33 / 3,100,000.00 12/ 233.23 Despite being a parliamentary democracy, political risk in Bangladesh remains noteworthy. According to the UK Malaysia 920.00- 214.23- Department of Trade26, Bangladesh’s current political situation, 30.67-33.33 a/ 7.14-7.76 4.2944 (Ringgit) 1,000.00 13/ 232.86 can be summarized as follows: Thailand 300.00 14/ 8.84 9,000.00 b/ 265.29 33.9245 (Baht) Democratic institutions, including Parliament and local 13,620.00- 270.00- government, are weak. The current government is led Philippines/NCR 454.00-491.00 15/ 9.00-9.73 50.4451 (Peso) 14,730.00 b/ 292.00 by Prime Minister Sheikh Hasina. Her Awami League-led 1,000.00- 147.04- Grand Alliance won a landslide victory in the general China 33.33-73.00 a/ 4.90-10.73 6.8008 (Yuan Renminbi) 2,190.00 16/ 322.02 election on 5 January 2014, after the BNP decided not to participate, leaving more than half the seats uncontested. Taiwan 920.00 17/ 30.25 27,600.00 b/ 907.54 30.4120 (Taiwan Dollar) Opposition parties had wanted elections under a neutral interim government. A controversial constitutional Hongkong 18 b ($HK) 260.00 / 33.32 7,800.00 / 999.70 7.8024 amendment, adopted in June 2011, had removed the provision for a temporary caretaker form of government South Korea 19 b (Won) 51,760.00 / 45.37 1,552,800.00 / 1,360.99 1,140.9300 during election periods. As a result of the boycott, Jatiya Japan 5,424.00- 48.36- 162,720.00- 1,450.66- Party is now the official Opposition, though it also enjoys 20 112.1700 (Japan Yen) 7,280.00 / 64.90 218,400.00 b/ 1,947.04 the unique position of forming part of the governing New Zealand 71.19- 2,928.00- 2,135.67- alliance, including holding ministerial portfolios. The 97.60-122.00 21/ 1.3710 (New Zealand Dollar) 88.99 3,660.00 b/ 2,669.58 opportunity for a renewed focus on democratic processes presented by the City Corporation elections in Dhaka and Australia 22 b (Australian Dollar) 141.60 / 107.73 4,248.00 / 3,231.97 1.3144 Chittagong in April 2015 was lost after the BNP withdrew part way through, citing widespread irregularities. The *For more full details of how the wages are determined see: http://www.nwpc.dole.gov.ph/pages/statistics/stat_comparative.html next general election must take place by January 2019 with the most likely timing being the last quarter of 2018. 5.4. Migrant Labour

According to the ILO24 “each year, more than 400,000 workers leave Bangladesh for overseas employment. Problems faced by Bangladeshi migrants include: high fees for migration charged by recruitment agencies, especially for low skilled jobs; low wages, lack of information on migration opportunities and risks; discrimination, exploitation and abuse while overseas; and insufficient services to protect the rights of workers.” Despite the problems migrants face, the importance of their contribution to the economy is evident in the fact that “remittances rose to over $15 billion in 2015 or about 8% of gross domesticproduct(GDP)— up from less than $2 billion in 2000—and have become a major sourceof foreign exchange earnings, second only to ready-made garments25.”

24. http://www.ilo.org/dhaka/Areasofwork/labour-migration/lang--en/index.htm 26. https://www.gov.uk/government/publications/overseas-business-risk-thailand/ 25. https://www.adb.org/sites/default/files/publication/190600/overseas-employment-ban-workers.pdf overseas-business-risk-thailand

16 The Mekong Club Bangladesh Private Sector AssessmentThe Mekong Club Vietnam Private Sector Assessment 16 The Mekong Club Bangladesh Private Sector Assessment 17 7. The Private Sector 7.2.1. ACI Group One of the largest Bangladeshi conglomerates. The company operates through three segments: Pharmaceuticals, Consumer Brands and Agribusiness. It was founded as the part of Imperial 7.1. Overview Chemical Industries (ICI) in East Pakistan in 1968. ACI had been integrated in Bangladesh in 1973. Mr. M Anis Ud Dowla is the founder of ACI. It has over 5,000 employees. Bangladesh has managed to sustain significant improvements in the quality of life of its citizens. 27 According to the World Bank Bangladesh Systematic Country Diagnostic . 7.2.3. Navana Group “Bangladesh is among a select group of countries worldwide where the pace of GDP growth accelerated, poverty dropped and inequality fell over 2000 to 2010, as the economy under went A Bangladeshi industrial conglomerate. It was founded in 1964. Navana Group under the leadership structural shifts accompanied by better job opportunities for men andwomen. Bangladesh made of Mr. Shafiul Islam Kamal as Chairman emerged into a separate physical entity from Islam Group good use of the deep and elasticdemand offered by the global economy to expand job opportunities after the death of its Chairman Mr. Jahurul Islam which was then the largest business group in in manufacturing. Remittances from workers abroad also emerged as animportant source of income. Bangladesh. Navana Group comprises a number of companies, has diversified its activities in various areas like product and project marketing, construction and real estate business, international Growth in Bangladesh has been broad-based due to improved opportunities in the labor market trading, distributions and production of various items and already attained significance in the coupled with a demographic dividend resulting from earlier successes in reducing population growth business arena of Bangladesh. and improving human development, enabling millions to move out of poverty. The pace of poverty reduction has picked up considerably: the number of poor people fell 17m between 2000 and 2010, 7.2.4. Abul Khair Group compared to less than 1m decline during 1990-2000.” The report identifies five areas where “concerted efforts over the next 3-5 years could have a Abul Khair Group is a one of the largest Bangladeshi industrial conglomerates. It started its journey transformative impact on accelerating the creation of more and better jobs in Bangladesh: as a tobacco marketing company back in 1953. With headquarter based in the commercial capital Chittagong, the group has now flourished into a multi-business portfolio of fast moving consumer 1. Energy, goods, steel, cement, ceramics, marble, shipping and trading business. 2. Inland connectivity and logistics, 3. Regional and global integration, 7.2.5. Bashundhara Group 4. Urbanization, 5. Improved delta management.” One of the largest industrial conglomerates of Bangladesh. It was founded by Ahmed Akbar Sobhan. It started in 1987 as a real estate company venture under the name East West Property 28 Development Limited (EWPD). The first project of EWPD turned out to be very successful. After 7.2. Top 10 Conglomerates in the Private Sector then, the company grew very quickly. Bashundhara invested in new fields, including manufacturing, industry and trading. More enterprises were established in the early 1990s; these included cement, (The following section is quoted from paper, pulp, tissue paper and steel production, as well as LP Gas bottling and distribution. It http://www.businesshabit.com/2016/06/top-10-group-of-companies-in-bangladesh.html) presently owns more than 20 major concerns located throughout Bangladesh. Now, it has over 15,000 employees. 7.2.1. PRAN-RFL Group: 7.2.6. Beximco Group PRAN-RFL Group is basically a food-products Corporation in Bangladesh. It was founded by Late Amjad Khan Chowdhury. PRAN started in 1981 as a processor of fruits and vegetables in It is one of the largest and most diversified industrial conglomerates of Bangladesh. It was Bangladesh. RFL started its operation into the PVC category in 1996 and the plastic sector in 2015. founded by ASF Rahman. It was founded in 1972. It has almost 50,000 employees. The group’s key Now it exports its products to more than hundred countries. It has almost 75,000 employees. businessesinclude ceramics, pharmaceuticals, textiles, jute, information technology, aviation, media, finance, real estate, construction and energy. The group is listed on the Dhaka Stock Exchange and the Chittagong Stock Exchange, with a market capitalization of over US$ 300 million. Its pharmaceutical division, Beximco Pharma, is listed on the London Stock Exchange. Its chairman and vice-chairman both have a net worth of over US$ 2 Billion.

27. http://documents.worldbank.org/curated/en/158801468180258840/Bangladesh-More-and-better-jobs-to-accelerate-shared- growth-and-end-extreme-poverty-a-systematic-country-diagnostic 28. http://www.businesshabit.com/2016/06/top-10-group-of-companies-in-bangladesh.html

18 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 19 7.4. Transparency 7.2.7. Square Group Transparency International ranks Bangladesh 145th out of 175 countries 29 It is one of the largest industrial conglomerates of Bangladesh. It was founded in 1958 by Samson H. on its Corruption Perceptions Index of 2016 , an index based on expert Chowdhury along with three of his friends as a private firm. It went public in 1991 and is currently opinion from around the world that measures the perceived levels of public listed on the Dhaka Stock Exchange. Square Group is holding the strong leadership position in the sector corruption worldwide. This illustrates the lack of transparency of pharmaceutical industry of Bangladesh since 1985 and it has been continuously in the 1st position public institutions and the high incidence of corruption. among all national and multinational companies since 1985. Square Group is now on its way to Country CPI2016 Rank becoming a high performance global player. Square becomes more than just an organization, it is an institute. In a career spanning across four and half decades it has pioneered the development of New Zealand 90 1 the local business in fields as diverse as Pharmaceuticals, Toiletries, Garments, Textile, Information Singapore 84 7 Technology, Health Products, Food Products, Hospital, etc Australia 79 13 7.2.8. City Group Hongkong 77 15 Japan 72 20 It is one of the largest industrial conglomerates of Bangladesh. City Group was founded by Mr. Fazlur Rahman, a business magnate in the private sector of Bangladesh. It began on 6 February 1972 Bhutan 65 27 as a mustard oil company venture under the name City Oil Mills. The first project of City Oil Mills Taiwan 61 31 turned out to be very successful. After then, the company grew very quickly. , City Group invested in new fields,including manufacturing, industry and trading. More enterprises were established in Brunei 58 41 the early 1990s; these included consumer goods, foods, steel, printing & packaging, shipping, power Korea (South) 53 52 and energy, shares and securities, insurance, media, and healthcare It presently owns more than 23 Malaysia 49 55 major concerns located throughout Bangladesh. Now City Group stands as one of top ten business houses in Bangladesh. Solomon Islands 42 72 China 40 79 7.2.9. Partex group India 40 79 It is one of the largest Bangladeshi industrial conglomerates. The industries under this conglomerate Mongolia 38 87 include foods and beverages, steel, real estate, furniture, agribusiness, plastics, etc. It started in 37 90 1959, by industrialist M A Hashem with tobacco trading. It owns over 40 subsidiaries from tobacco Indonesia to consumer goods, furniture, textile and the IT sector. It has split into two groups to improve Maldives 36 95 management of its subsidiaries. Sri Lanka 36 95 7.2.10. Ananda Group Philippines 35 101 Thailand 35 101 It is a Bangladeshi business conglomerate. The first Ananda company was established in 1983 as the Ananda Builders. It was established by Abdullahel Bari Farina. The diverse business areas of the Timor-Leste 35 101 group include ship building, heavy engineering, textiles, real estate and shipping. The most well- Vietnam 33 113 known concern under the group is Ananda Shipyard and Shipways Ltd. It is the largest of the private Pakistan 32 116 ship yards in Bangladesh. Laos 30 123 7.3. Top 200 Companies Nepal 29 131 Myanmar 28 136 For a more comprehensive list see: 28 136 https://en.wikipedia.org/wiki/List_of_companies_of_Bangladesh Papua New Guinea Bangladesh 26 145 Cambodia 21 156 Afghanistan 15 169 Korea (North) 12 174

29. https://www.transparency.org/news/feature/corruption_perceptions_index_2016#regional 20 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 21 Frozen shrimps, vegetables and tobacco are important export commodities based on their value 8. The Mekong Club Target Sectors contribution. In addition, although not classified under agricultural, Jute and Jute products contribute significantly to export value33. For the purpose of this study, which aims to generate a knowledge base from which The Mekong Club can approach the private sector in order to create awareness and offer cooperative solutions for the Export Commodities-Primary and Agriculture (Value in Million USD)34 eradication of modern slavery in corporate supply chains, attention will be given to the following core target sectors: A. Primary Commodities 687.53 958.98 1001.12 1079.58 554.29 (Chapter 1-24) • Agricultural (42.7% of the economically active population) • Manufacturing (14.4%) (1) Frozen Food 445.18 625.04 598.42 543.84 324.81 • Retail (13.4%) (Chapter 02-03) • Construction (5.6%) - TBC a) Frozen Fish 89.12 133.53 108.05 57.99 17.63 (0300, 0302, 0303, 0307)

8.1. The Agriculture Sector b) Shrimps (0306) 348.28 477.83 471.67 454.93 289.15

8.1.1. General c) Others 7.78 13.68 18.70 30.92 18.03

Agriculture in Bangladesh is of significant importance to the economy with value added to GDP (2) Agricultural Products 242.35 333.94 402.70 535.74 229.48 estimated at 14.8% in 201630. As indicated earlier the agricultural sector employs 42.7% of the (Chapter 04-24) labour force and harbours the highest percentage of female workers. a) Tea (0902) 5.65 3.20 3.38 2.44 1.00 Although rice is the primary agricultural crop produced in Bangladesh, with approximately 75% of all areas under cultivation being planted with rice31, other commodities dominate agricultural exports. b) Vegetables (07) ) 46.84 71.73 77.43 110.34 58.24 According to the Bangladesh Yearbook of Agricultural Statistics 201632, rice production totalled 34.7 52.26 70.88 68.74 millionmetric tons in 2014-2015. Comparatively, Bangladesh was the world fourth biggest producer c) Tobacco (24) ) 60.18 32.32 of rice in 2009, but is only just self-sustainable. d) Cut Flower & Foliage (06) 39.84 42.89 50.46 41.43 19.10

Production of Major Crops (in ‘000 metric tons) e) Fruits (08) 17.37 37.68 57.16 71.89 8.32

f) Spices (0910) 6.94 9.24 13.68 21.13 7.79 2012-2013 2013-2014 2014-2015 Rice Aus 2 158 2 326 2 328 g) Dry Food (19) 20.95 29.37 37.19 45.24 19.66 Aman 12 897 13 023 13 190 h) Others 52.50 68.95 94.66 183.09 83.05 Boro 18 778 19 007 19 192 (17) Jute & Jute goods 787.99 1114.93 967.38 1030.61 332.40 (Chapter 53, 630510) Total Rice 33 833 34 356 34710 Sugar 5 008 5 064 4 988 a) Raw Jute (5303) 196.27 357.28 266.28 229.92 49.47

Winter Vegetables 1 649 1 953 2 192 b) Jute Yarn & Twine (5307) 397.69 500.66 468.15 506.74 208.38

Summer Vegetables 2 931 3 365 3 729 c) Jute Sacks & Bags (630510) 136.79 167.47 185.26 237.42 55.14

d) Others 57.24 50.27 47.69 56.53 19.41

30. https://data.worldbank.org/indicator/NV.AGR.TOTL.ZS 31. Bangladesh Yearbook of Agricultural Statistics 32. http://bbs.portal.gov.bd/sites/default/files/files/bbs.portal.gov.bd/page/1b1eb817_9325_4354_a756_3d18412203e2/Yearbook- 33. https://www.dhakachamber.com/home/Major_Export_Items 2016-Final-19-06-2017.pdf 34. https://www.dhakachamber.com/home/Major_Export_Items

22 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 23 8.1.2. The Shrimp & Fishing Industries 8.3. Manufacturing

Bangladesh’s Fishing Industry is estimated to contribute 3.69% to National GDP and 23.12% to 8.3.1. General Agricultural GDP35. This vast industry is “considered one of the most suitable regions for fisheries in the world, with the world’s largest flooded wetland and the third largest aquatic biodiversity in Asia The table below clearly shows the prominence of the textile and garment industry in manufacturing after China and India”36. exports in Bangladesh. It is well-known internationally that shrimp producers in Bangladesh employ slavery tactics in an effort to increase profits. As far back as 2011, a Verite research report entitled “Research On Manufactured Export Commodities by Value Indicators Of Forced Labor in the Supply Chain of Shrimp in Bangladesh”37 has detailed indices of 2013-14 induced or inflated indebtedness, sexual violence, abuse and harassment, overtime infringement, 2009-10 2010-11 2011-12 2012-13 (July -Nov) engagement in illegal activities, low earnings, health hazards and child labour in shrimp fry B. Manufactured Commodities collecting, shrimp farming and shrimp processing. Siddharth Kara gives an extensive account of 15517.12 21969.24 23300.78 25947.78 11405.32 the use of bonded labour in the Bangladesh shrimp and fishing industry in his book Bonded Labor: (Chapter 25-97) Tackling the System of Slavery in South Asia (2012).(References:in fishing industry, 121; in shrimp (1) Cement, Salt, Stone Etc 19.52 18.63 14.58 6.15 2.12 distribution, 117–18; in shrimp industry, 117–22; in shrimp processing, 118–20). (Chapter 25) Child labour is especially prevalent in the Fish Drying and Processing sectors according to the US (2) Ores, Slag and Ash Department of Labour’s Findings on the Worst Forms of Child Labour38. First hand experiences of 11.47 29.18 27.96 22.37 8.29 (Chapter 26) forced and child labour have also been documented. See for example Jensen’s account of child slavery in the dry-fish industry on Dublar Char; a large, remote, silt island in the Sundarbans forest (3) Petroleum bi Products 39 301.15 260.68 275.44 313.95 70.49 area . (Chapter 27) For more detail see Section 9: Modern Slavery and Human Trafficking in Bangladesh. (4) Chemical Products 102.87 104.76 103.01 93.01 40.14 (Chapter 28-38)

8.2. FMCG Retail a) Pharmaceuticals (30) 40.97 44.27 48.25 59.82 31.04

Bangladesh’s retail market continues to be traditionally structured as small, roadside grocery shops b) Chemical Fertilizer (31) 38.55 39.53 17.64 - - (mom and pop stores) constitutes around 75 percent of the retail sector. Municipal corporation markets hosting various smaller shops based on the kind of commodity they carry represent about c) Cosmetics (33) 0.28 0.33 1.06 0.77 0.18 20 percent of the food retail sector. The rest of the 5% market share is occupied by Convenience d) Others 23.07 20.63 36.06 32.42 8.92 Stores and Supermarkets (less than 1%). (5) Plastic Products 40 50.63 68.76 88.69 84.51 32.37 According to the USDA Gain Report of 2016 : (Chapter 39) “The modern retail sector, including supermarkets and convenience stores, is growing as consumers a) PVC Bags (3923) 27.96 27.26 31.26 32.00 15.09 attach more importance to appearance, ambience, comfort, and the availability of a vast range of products. Modern retail outlets are rising in number, although contacts believe they likely only b) Plastic Waste (3915) 15.69 31.58 43.42 39.09 11.27 represent two to three percent of total urban retail market sales. About 22 companies with more than 131 outlet shave ventured into the modern food retail industry.” c) Others 6.98 9.92 14.01 13.42 6.01 The informal nature of the retail sector provides the ideal platform for agricultural enterprises (6) Rubber (Chapter 40) 9.69 20.66 16.23 13.57 5.91 engaged in modern slavery to offset their products. (7) Leather (Chapter 41) 226.10 297.83 330.16 399.73 194.39 (8) Leather Product 29.06 55.42 99.36 161.62 77.95 (Chapter 42-43) 35. http://www.fao.org/fileadmin/templates/ess/documents/apcas26/presentations/APCAS-16-6.3.2_-_Bangladesh_-_Fisheries_ (9) Wood & Wood Products Statistics_in_Bangladesh.pdf 2.18 1.29 1.25 1.71 0.83 36. http://www.sciencedirect.com/science/article/pii/S2468550X16300260 (Chapter 44-45) 37. http://verite.org/wp-content/uploads/2016/11/Research-on-Indicators-of-Forced-Labor-in-the-Bangladesh-Shrimp- Sector__9.16.pdf 38. https://www.dol.gov/agencies/ilab/resources/reports/child-labor/bangladesh 39. http://onlinelibrary.wiley.com/doi/10.1111/foge.12012/full 40. https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%E2%80%99s%20Guide%20Bangladesh-2016_Dhaka_ Bangladesh_6-7-2016.pdf

24 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 25 (10) Handicrafts (Chapter 46) 3.79 4.47 4.78 6.16 2.87 (24) Footwear (Chapter 64) 204.09 297.80 3 3 5 . 5 1 4 1 9 . 3 2 238.18 (25) Headgear/Cap (11) Pulp (Chapter 47) 0.03 0.01 - 0.01 0.08 36.63 5 4 . 1 0 5 3 . 2 3 4 7 . 6 9 22.32 (Chapter 65) (12) Paper & Paper Products 18.88 26.33 27.75 33.73 16.47 (chapter 48) (26) Umbrella Waking Sticks - 0 . 0 3 - 0 . 0 1 0.19 (66) (13) Printed Materials 1.62 1.66 1.58 1.39 0.53 (Chapter 49) (27) Wigs & Human Hair 1.03 2 . 1 2 6 . 7 6 9 . 1 4 4 . 7 3 (Chapter 67) (14) Silk (Chapter 50) 0.03 0.03 0.01 0.18 0.41 (28) Building Materials (15) Wool & Woolen Products 0.30 0 . 2 1 0 . 3 2 1 . 9 1 - 0.10 0.57 0.61 0.16 0.07 (Chapter 68) (Chapter 51) (29) Ceramic Products 30.78 3 7 . 5 8 3 3 . 7 5 3 7 . 6 9 1 9 . 2 0 (16) Cotton & Cotton Product (Chapter 69) (Yarn, Waste, Fabrics etc) 95.23 135.01 113.00 124.96 48.51 (Chapter 52) (30) Glass & Glass ware 5 . 9 4 1 . 4 4 0 . 3 7 0 . 1 6 0 . 1 2 (Chapter 70) (17) Jute & Jute goods 787.99 1114.93 967.38 1030.61 332.40 (Chapter 53, 630510) (31) Engineering Products 311.09 3 0 9 . 5 5 3 7 5 . 4 9 3 6 7 . 4 7 153.17 (Chapter 71-88) a) Raw Jute (5303) 196.27 357.28 266.28 229.92 49.47 a) Iron Steel (72,73) 60.42 6 9 . 7 9 5 9 . 7 3 5 6 . 8 1 22.04 b) Jute Yarn & Twine (5307) 397.69 500.66 468.15 506.74 208.38 b) Copper Wire (74) 110.86 6 5 . 0 4 5 0 . 9 3 6 6 . 3 8 21.02 c) Jute Sacks & Bags (630510) 136.79 167.47 185.26 237.42 55.14 c) Stainless Steel ware (82) 2 6 . 1 1 2 . 4 3 3 . 2 0 1 . 5 8 3.50 d) Others 57.24 50.27 47.69 56.53 19.41 d) Engineering Equipment (18) Man Made Filaments & 2 3 . 2 0 3 6 . 0 3 4 9 . 5 4 4 8 . 7 3 37.85 77.18 95.75 81.39 101.45 38.39 (84) Staple Fibres (54-56)

(19) Carpet (Jute & Others -57) 8 . 0 6 7.50 6 . 2 3 8 . 4 6 5 . 0 2 e) Electric Products (85) 4 9 . 2 3 2 6 . 0 7 8 8 . 5 3 6 3 . 0 9 23.20 (20) Specialized Textiles f) Bicycle (8712) 2 . 6 7 9 9 . 8 3 1 0 5 . 5 9 1 0 5 . 0 8 3 7 . 8 1 185.97 164.55 138.77 124.52 4 9 . 5 1 (Chapter 58-60) g) Others 3 8 . 6 0 1 0 . 3 6 1 7 . 9 7 2 5 . 8 0 7 . 7 5 a) Terry Towel (5802) 1 5 7 . 0 7 120.13 92.11 8 1 . 9 6 3 1 . 9 1 (32) Ships, boats & floating 9 . 3 4 4 0 . 4 4 4 5 . 9 5 5 . 7 3 0 . 0 6 structures (Chapter 89) b) Special Woven Fabric (59) 8 . 2 2 11.75 1 0 . 9 3 1 0 . 9 3 4 . 7 6 (33) Other mfd Products c) Knitted Fabrics (60) 2 0 . 6 8 26.16 3 0 . 8 6 2 4 . 0 1 9 . 2 0 5 4 . 5 7 6 9 . 4 2 8 4 . 6 1 1 2 1 . 5 3 5 2 . 7 9 (Chapter 90-97) d) Other - 6.51 4 . 8 7 7 . 6 2 3 . 6 4 a) Optical, Photographic, (21) Knitwear (Chapter 61) 6483.29 9482.06 9486.39 10475.88 4899.82 Medical Instruments etc (90) 1 4 . 8 6 2 8 . 4 0 3 4 . 6 4 5 0 . 3 3 2 5 . 8 8 (22) Woven Garments 6013.43 8432.40 9603.34 11039.85 4753.53 b) Furniture (94) 1 9 . 2 6 2 1 . 3 8 2 7 . 1 4 3 1 . 4 1 1 1 . 2 8 (Chapter 62) c) Golf Shaft (950639) 1 1 . 1 8 8 . 7 1 9 . 7 9 1 5 . 1 5 4 . 8 0 (23) Home Textile (Chapter 63 402.49 788.76 906.07 7 9 1 . 5 2 297.78 Excluding 630510) d) Others 9 . 2 7 1 0 . 9 3 1 3 . 0 4 2 4 . 6 4 1 0 . 8 3 36.68 (34) Computer Services 3 5 . 3 6 4 5 . 3 1 7 0 . 8 1 1 0 1 . 6 3 (July-Oct)

26 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 27 8.3.2. Garment and Textile Industry 2012 Tazreen Fashion factory “A fire broke out on 24 November 2012, in the Tazreen Fashion factory in Dhaka killing 117 people Bangladesh’s exceptional growth the past few years (GDP Growth Rate in Bangladesh averaged 5.69 and injuring 200.[88] It was the deadliest factory fire in the history of Bangladesh48. percent from 1994 until 2016, reaching an all-time high of 7.11 percent in 201641) has primarily been driven by its growing apparel industry, which accounted for over 83 percent of export earnings in Collapsed Rana Plaza building near Dhaka, Bangladesh, in 2013 201542. “On 24 April 2013 over 1045 textile workers factories making clothes for Western brands were killed According to World Finance43 when a garment factory collapsed. The 2013 Savar building collapse was in the Rana Plaza complex, “As global demand for cheap clothing rises rapidly, Bangladesh’s position as the second biggest in Savar, an industrial corner 20 miles northwest of Dhaka, the capital of Bangladesh. It was the exporter in the world continues to hold strong, which is mainly due to its large population and low “world’s deadliest industrial accident” since the Bhopal disaster in India in 1984.While some 2,500 labour costs.” were rescued from the rubble including many who were injured, the total number of those missing remained unknown weeks later. The building owner, Sohel Rana, built an additional two floors Furthermore, beyond his approved permit for a six-floor building.[94] Rana, associated with the ruling Awami “As of 2016 Bangladesh held the 2nd place in producing garments just after China. Bangladesh is the League, used “shoddy building materials, including substandard rods, bricks and cement, and did world’s second-largest apparel exporter of western brands. Sixty percent of the export contracts of not obtaining the necessary clearances” and constructed the building on a “pond filled with sand”. western brands are with European buyers and about forty percent with American buyers. Only 5% of textile factories are owned by foreign investors, with most of the production being controlled by local 8.3.3. Major players

investors. In the financial year 2016-2017 the RMG industry generated US$28.14 billion, which was 49 80.7% of the total export earnings in exports and 12.36% of the GDP; the industry was also taking on The top textile manufacturers in Bangladesh are as follows : green manufacturing practices44. (the following sections is quoted from https://www.bizvibe.com/blog/leading- garment-manufacturers-bangladesh/ ) Despite being a well-established industry benefiting from various agreements, working conditions in

Bangladesh have been depicted as substandard and even inhuman45. Although major improvements Ha-meem Group have been made, dire conditions exist in different areas. Child labour is still a prominent feature of Ha-Meem Group is a leading wholesale clothing manufacturer in Bangladesh and in the world. the labour landscape and modern slavery practices are widespread. The company produces some of the most fashionable denim fabrics and garment products and owns one of the most comprehensive and resourceful manufacturing facilities in Bangladesh. Over Rapid development has caused many a developer or entrepreneur to cut corners in capitalising on the years, Ha-Meem has been working with some of the biggest fashion brands of the world. The the surge in business. One report puts it as follows: company has a rich history of 30 years in the textile business, and employs around 50,000 workers; the company has 26 garment factories consisting of 300 production lines and 7 washing plants with “In 2000 garment entrepreneurs had a reputation for shirking custom duties, evading corporate the capability of producing 7 million pcs/month. taxes, remaining absent in capital markets, avoiding social projects such as education, healthcare, and disaster relief but, as argued by authors Quddus and Salim, these entrepreneurs took the risks Beximco Fashions Ltd. needed to build the industry46.” Beximco Fashions Limited (BFSL), a member of Beximco Group, started its commercial production during July 1997. BFSL is a 100% export oriented garment industry, located at Dhaka Export The high-risk safety and labour standards workers were exposed to spilled out into the open as “Five Processing Zone at Savar, Dhaka. Beximco Fashions Limited produces over 6 million pcs of high deadly incidents from November 2012 through May 2013 brought worker safety and labor violations quality dress/casual shirts for prominent brands and retails in USA, Canada & Europe. in Bangladesh to world attention”. The three most important were: Square Fashions Ltd. That’s It Sportswear Ltd fire 2010 Founded in 1997, Square Fashions Limited is specialised in producing a wide range Readymade “On 14 December 2010 thirty people died and another 200 were seriously injured in a fire at the Knit Apparels & Circular Knit Fabrics. Now the company has two Garments Units and two Fabrics garment factory, “That’s It Sportswear Ltd”, owned by Hameem Group. International buyers of this Units. Each unit is equipped with cutting, embroidery, printing, sewing and finishing materials and factories products included “American Eagle, GAP/Old Navy, JC Penney, Kohl’s, Squeeze, Sears, VF equipment. Square Fashions Limited is also providing free worker’s dormitories with pure drinking Asia, Target Store, Charming Shoppes, Wal-Mart in USA market and H & M, Carrefour, Zara, Hema, water, lighting and cooking facilities, transportation, meals at work, recreational facilities, and M & S Mode, ETAM, Western Store, Migros, Celio and PNC in Europe market47”. around-the-clock medical services.

41. https://tradingeconomics.com/bangladesh/gdp-growth 42. 43. https://www.worldfinance.com/markets/bangladesh-textiles-industry-set-global-export-record 44. https://en.wikipedia.org/wiki/Textile_industry_in_Bangladesh 45. http://whatshemakes.oxfam.org.au/wp-content/uploads/2017/10/Living-Wage-Media-Report_WEB.pdf 46. 47. https://en.wikipedia.org/wiki/Textile_industry_in_Bangladesh 48. https://en.wikipedia.org/wiki/Textile_industry_in_Bangladesh 49. https://www.bizvibe.com/blog/leading-garment-manufacturers-bangladesh/

28 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 29 Opex Sinha Group Givensee Group of Industries Ltd. Opex & Sinha Textiles Group is one of the leading exporter of readymade garments in Bangladesh Givensee Group of Industries is one of the largest composite garments manufacturers in with an annual export in excess of US $ 300 million. In the apparels business segment, Sinha Group Bangladesh. Established in 1982, it has more than 17000 workers producing over 70000 pieces has two subsidiaries: Medlar Group and Opex Group. Sinha Group has established a strong backup of garments per year, ranging from knitwear items to heavy denim wear. The group also has linkage facility, the most modern and largest several projects of spinning, weaving, knitting, yarn setup some of the largest vertical support units such as spinning, dyeing, washing, and garments dyeing, pc dyeing, denim, knit dyeing, printing, and finishing. accessories production facilities. Fakir Group (see more at: https://www.bizvibe.com/blog/leading-garment-manufacturers-bangladesh/ ) Fakir Group is a combination of composite knit garments, garment label designing and manufacturing, printing and packaging, paper and board manufacturing, and more. Its Fakir Other important garment manufactures include50: Garments Ltd is a 100% export oriented knit garment industry of 3.6 million pcs capacity per annum. FGL has already attained the reputation of being the most dependable garments industry for high • Thermax Group quality knit garments products of multi-dimensional styles. Must Read: Bangladesh Emerges as • Noman Group Leading Denim Manufacturing Hub in the World • Viyellatex Group • Knit Concern Group DBL Group • Sunman Group DBL Group is a diversified business entity which has vertically integrated textile and apparel manufacturing facilities. It is also one of the largest knit garment manufacturers and exporters of 8.4. Banking Industry Bangladesh, with major markets include Europe, USA and Canada and is a platinum supplier of H&M for Knit Garments. H&M, Walmart-George, Puma, Esprit and G-Star are some of the major buyers. Bangladesh’s financial services penetration is comparable with that of the Philippines and Vietnam, with only 30% of the population having a bank account51. The low level of financial formalisation Epyllion Group inhibits transactional flow, but increases the possibility of cash exploitation. Epyllion Group started its journey as a house of Readymade Garments (RMG) engaged in According to export.gov the banks in Bangladesh are structured as follows52: manufacturing and exporting of knit apparel since 1994. It has since become one of the biggest conglomerates with substantial establishment of its backward linkage of all kinds of knit garments, • Scheduled Banks: the banks which operate under the Bank Company Act, 1991 (Amended in textile, wet processing, and garment accessories. The major exports for Epyllion Group’s readymade 2003); garments include Europe, USA, Asia, and Africa. • Non-Scheduled Banks: the banks that are established for special and definite objectives and Standard Group operate under the acts for meeting those objectives. These banks cannot perform all of the functions of scheduled banks. Established in 1984, Standard Group is one of the longest running garment manufacturing companies in Bangladesh. It has one of the largest woven garment manufacturing facilities in Furthermore: Bangladesh, including a sweater production facility. In addition, the company has its own in house “There are 56 scheduled banks in Bangladesh that operate under the full control and supervision garment washing, printing, embroidery, apparel design, garment testing, and various accessories of the Bangladesh Bank, which is empowered to do so through the Bangladesh Bank Order of 1972 production facilities. and the Bank Company Act of 1991. Scheduled Banks are classified into following types:

Asian Apparels Ltd. • State-Owned Commercial Banks (SOCBs): There are five SOCBs that are fully or majority owned by the government of Bangladesh. Asian Apparels Ltd, founded in 1992, is now one of the leading garment manufacturers in Bangladesh with a special focus on garment exports. Over the recent years, Asian Apparels Ltd has • Specialized Banks (SDBs): Three specialized banks are now operating which were established been putting increasing attention on being compliant with all applicable social, ethical, environment for specific objectives like agricultural or industrial development. These banks are also fully or and quality system to build a better sustainable health and safety environment in factories. majority owned by the government of Bangladesh.

51. http://fashion2apparel.blogspot.com/2016/12/top-10-textile-industry-bangladesh.html 52. https://www.export.gov/article?id=Bangladesh-Banking-Systems

30 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 31 • Private Commercial Banks (PCBs): There are 39 private commercial banks that are majority owned by private entities. PCBs can be categorized into two groups: 1) Conventional PCBs: 31 9. Modern Slavery and Human Trafficking in conventional PCBs are now operating in the industry. They perform the banking functions in a conventional fashion, i.e. with interest-based operations; 2) Islami Shariah-based PCBs: There Bangladesh are eight Islami Sharia-based PCBs in Bangladesh, and they execute banking activities according to Islami Sharia-based principles, i.e., in a Profit-Loss Sharing (PLS) mode. • Foreign Commercial Banks (FCBs): Nine FCBs are operating in Bangladesh as the branches of 9.1. Overview banks incorporated abroad.” In this section a broad outline of the problematic of human trafficking and modern slavery in With regards to the performance of the banking sector, The Economist Intelligence Unit reports as Bangladesh will be given. The extent of the problem can be best be understood within the context follows: of the broader region. Using the Global Slavery Index54, the estimated numbers of people in “In June 2017 the government allocated Tk20bn (US$250m) to recapitalise Bangladesh’s state- modern slavery, together with the government response for countries in the Mekong region and owned banks. There are signs that the country’s banking sector is facing mounting problems, and South Asia are shown below. Government response data is measured by the Global Slavery Index regulators’ as an assessment of composite factors of the survivors supported, criminal justice, coordination & accountability, addressing risk and government & business. They also provide a measurement of Efforts have so far been insufficient to tackle the issue. Only limited action has been taken to vulnerability to modern slavery based on civil and political protections, social health and economic penalise defaulters, improve risk management and strengthen bank management. In its latest Article IV report, the IMF stated that there are some underlying risks to the banking sector owing to rights, personal security, refugees and conflict (higher scores mean greater vulnerability). excess liquidity. However, an improvement in conditions within the state-owned banking sector will be dependent on the political will to address the problem, which has been limited so far.” Global Slavery Index

The top 10 banks in Bangladesh53 Mean Number in Government vulnerability to slavery (GSI) % (GSI) response modern 1. Islami Bank Bangladesh rating slavery score 2. Dutch-Bangla Bank Limited 3. Prime Bank Global figures 45.8m 4. HSBC Bank 5. Standard Chartered Bankin 1.648 (ranked 3rd in Cambodia 256,800 prevalence not absolute CCC 41.51 6. BRAC Bank Limited number out of all countries by 7. State Bank of India proportion of population) 8. Bank Asia Limited 9. Grameen Bank 0.247 (in Mekong then china has 10. Janata Bank Limited China 3,388,400 the highest absolute number by CCC 44.66 virtue of being biggest pop, 2nd in world after India)

Laos 20,000 0.295 CCC 36.45 Myanmar 515,100 0.956 CCC 56.36/100 Thailand 425,500 0.626 B 47.54 Vietnam 139,300 0.152 B 29.34 India 18,354,700 1.403 B 51.35 Pakistan 2,134,900 1.130 CCC 62.47 Bangladesh 1,531,300 0.951 B 44.12

Although the lowest comparatively in South Asia, the amount of people in slavery in Bangladesh is staggering when compared to South East Asia. Despite the population being vulnerable to slavery practices, the government shows commitment to the fight against slavery. 53. https://wpgroupbd.com/bangladesh-top-10-bank/ 54. https://www.globalslaveryindex.org/findings/ 32 The Mekong Club Bangladesh Private Sector Assessment The Mekong Club Bangladesh Private Sector Assessment 33 9.2. Highlights from US Trafficking in Persons Report 2017 9.2.3. Rohingya Crises With regards to the recent crises in Myanmar, the report records the following: 9.2.1. General “Bangladesh is host to an estimated 32,000 registered Rohingya refugees and up to 500,000 According to the USA Trafficking in Persons report 201755, Bangladesh is “primarily a source and, to undocumented Rohingya, whose stateless status and inability to receive aid and work legally a lesser extent, a transit and destination country for men, women, and children subjected to forced increases their vulnerability to human trafficking. Though numbers of such migrants were labor and sex trafficking.” significantly fewer than in previous years, some Rohingya and Bangladeshi migrants who travel by boat to Southeast Asian countries are subject to exploitation when they are unable to pay Furthermore: ransoms and are instead sold into forced labor. Women and girls who migrate for domestic work are particularly vulnerable to abuse. Some women who migrate through Bangladeshi recruitment “Within the country, children and adults are subjected to sex trafficking, domestic servitude, and agencies to Lebanon or Jordan for domestic work are subsequently sold and transported to Syria forced and bonded labor, in which traffickers exploit an initial debt assumed by a worker as part and subjected to forced labor and sex trafficking. Some women and children are subjected to sex of the employment terms. Street children are sometimes coerced into criminality or forced to trafficking and forced labor in India and Pakistan.” beg; begging ringmasters sometimes maim children to increase their earnings. In some instances, children are sold into a form of bondage by their parents, while others are induced into labor The situation has since deteriorated. According to an article in the The Washington Post on the 25th through fraud and physical coercion, including in the domestic fish drying industry, or exploited of October: in sex trafficking. Bangladeshi children are vulnerable to forced labor in tanneries. According to an international expert on debt bondage, Bangladeshi families and Indian migrant workers are “Some 604,000 people, mostly Rohingya, have fled to neighboring Bangladesh since Aug. 25, where subjected to bonded labor in some of Bangladesh’s brick kilns; some kiln owners sell bonded they have joined more than 300,000 who fled in earlier waves of ethnic violence over the past three females into prostitution purportedly to recoup the families’ debts and some Bangladeshi families decades. With thousands still crossing the border each day, the total number of Rohingya refugees is are subjected to debt bondage in shrimp farming. Some ethnic Indian families are forced to work expected to cross the 1 million mark in the coming days or weeks.” in the tea industry in the north-eastern part of the country. NGOs allege some officials allow human traffickers to operate at brothels, at India-Bangladesh border crossings, and at maritime 9.3. Child labour embarkation points.” According to the 2016 Worst Forms of Child Labour Report from the USA International Bureau for 9.2.2. Migrant Labour Labour Affairs:

Migrant labour recruited in Bangladeshi to work in the Middle East, Southern and East Africa, “Bangladesh made a minimal advancement in efforts to eliminate the worst forms of child labor. South and Southeast Asia, Europe, and the United States face conditions indicative of forced labor. The Education Act of 2016, which makes education compulsory through eighth grade (age 14), was These migrant labourers are exposed to the typical risks associated with modern slavery practices drafted and endorsed by the Prime Minister’s cabinet but has not yet been adopted by Parliament. e.g. “before their departure, many migrant workers assume debt to pay high recruitment fees, However, children in Bangladesh perform dangerous tasks in garment production. Children also imposed legally by recruitment agencies belonging to BAIRA and illegally by unlicensed sub-agents; engage in the worst forms of child labor, including forced childlabor in the production of dried fish this places migrant workers at risk of debt bondage. Some recruitment agencies and agents also and bricks. The laborlaw does not prohibit children from working in informal economic sectors, commit recruitment fraud, including contract switching, in which they promise one type of job and including in domestic work, on the streets,and in small-scale agriculture. The law also does not conditions but then change the job, employer, conditions, or salary after arrival56.” specify the activities and number of hours per week of light work that are permitted for children ages 12 and 13. In addition,the number of labor inspectors is insufficient for the size of Bangladesh’s work force, and fines are inadequate to deter child labor law violations.”

Child Labour in Bangladesh

Childern Age Percent Working (% and population) 5 to 14 4.3 (1,326,422) Attending School (%) 5 to 14 89.4 Combining work and School (%) 7 to 14 1.9 Primary completion rate (%) - 98.5

Of all the working children ages 5-14, 39.7% are found in agriculture, 30.9% in the service sector and 29.4% in industry.

55. 56. https://www.state.gov/j/tip/rls/tiprpt/2017/

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