Bangladesh Bank pursuing instilling responsible business ethos in financial sector institutions

By Bangladesh Bank Governor Dr. Atiur Rahman, In recent years Bangladesh Bank (BB) has been pursuing instilling of socially responsible business ethos in our financial sector institutions by mainstreaming of CSR in their corporate goals and objectives, guiding them into in-house and community based CSR engagements; encouraging fostering of inclusive, equitable and sustainable socioeconomic growth and development.

In the international arena, on the other hand, a lot of activities are also going on for attaining business sustainability. The Post-2015 Business Engagement Architecture, for example, is trying to engage business on sustainable development to join forces with the UN Global Compact, the World Business Council for Sustainable Development (WBCSD), the Global Reporting Initiative and other like-minded organizations to promote and support corporate commitments and actions that advance UN sustainable development goals. This collaboration is based on a common understanding that i) corporate sustainability strategies must be rooted in respect for universal principles such as those advanced by the UN Global Compact in the areas of human rights, labor, environment and anti-corruption; ii) that companies must adopt transparent processes for communicating to their stakeholders, applying standards such as those developed by the Global Reporting Initiative; and iii) that corporate sustainability initiatives, platforms and networks, while focused on business, should also integrally involve key stakeholder groups to work together for sustainability.

We all know that over the past thirty years or so, the contribution of garments sector in Bangladesh has been simply outstanding in terms of employment generation particularly for women, export earnings and domestic demand creation. With the lion share in export and transforming itself as the top producer in South Asia, Garments sector deserves to be our prime driver of change. In view of ensuring a healthy atmosphere in the garments sector a UK Government sponsored project named ‘RAGS (Responsible Accountable Garment Sector)’ through DFID Challenge Fund was initiated in 2010 and is expected to end December 2013. It is a multi-country project in the RMG sectors of India, Bangladesh, Nepal and Lesotho managed by Maxwell Stamp with the following characteristics:

· The objective of RAGS is to engage in a holistic approach of developing the RMG sector through capacity building of mid level management and workers, women’s empowerment through skill training and women’s cafes and women’s rights, working with small and medium enterprises and cottage industries to produce fair trade products and accessing global markets, using environment-friendly technology in the RMG sector.

· In Bangladesh there are 4 projects being implemented under RAGS which are led by Actionaid Bangladesh, Impact Foundation, Tesco and People Tree Foundation.

· The Challenge Fund is for short term pilots through which activities can be replicable and scalable to create unique contribution to the economy of a country.

· Post Rana Plaza calamity has revealed that in order to create a sustainable RMG sector in the countries in Asia there have to be proper implementation and concern on aspects of human rights, worker friendly environments through occupational health & safety issues, capacity building of workers and supply chain interventions which will adhere to global standards and create a “win – win” situation for both employees / workers and factory owners.

· Investing in skill development of workers will enhance labor productivity and increase market share and bring in higher profits. Both Tesco & Impact Foundation have been conducting management training in the factories both in Chittagong & Dhaka which have strong business cases for cost effectiveness and greater profits.

· On women’s empowerment & women’s cafes initiated through Actionaid Project women have gained awareness on their rights as RMG workers and been learning to resolve problems through dialogue and discussion in the women’s cafes set up in the factories for female workers.

· Although this Project is almost at its end there is a scope to continue the activities under the 4 projects in Bangladesh through new funding and new partnerships.

Ladies and gentlemen, we at Bangladesh Bank have also something to share what we have already done and plan to do for the improvement of garment sector in Bangladesh. Major initiatives that BB has taken are:

· Bangladesh Bank called upon all banks and financial institutions operating in Bangladesh for contributing to Prime Minister’s Relief fund for rehabilitation activities after Rana Plaza Collapse. All banks and FIs contributed around Tk. 1000 million to Prime Minister’s Relief fund and the entire CSR operation was coordinated by Bangladesh Bank.

· Bangladesh Bank instructed all scheduled banks to open bank accounts for RMG workers with minimum initial deposit of Tk. 100 and no service charges for facilitating banking services to the at affordable costs.

· Bangladesh Bank constructed a Two Step Loan Fund for refinance or pre-finance of JICA assisted Financial Sector Project for the Development of Small and Medium Sized Enterprises with the aim of extending financial support to micro enterprises and ensuring safe working environment for RMG and knitwear sector workers.

· Bangladesh Bank instructed all scheduled banks to comply with all relevant building codes strictly during the construction of own building or own floor space purchase as well as in lending for construction of building or floor space purchase.

Bangladesh Bank plans to do more for improving the capacity of Fire Service Department and others for faster and stronger response to any disaster related to RMG sector.

While concluding, I would like to thank CSR Center for organizing this timely event and expect our development partners continue to support socially responsible worker-friendly initiatives like the ones pursued by RAGS in the coming days as well. Together, we can surely build a stronger and yet sustainable garments sector in Bangladesh which will help all of us in achieving people and planet friendly sustainable development in the years to come.

Source: BB Governor Atiur Rahman’s speech at a seminar on Responsible Accountable Garment Sector (RAGS)  Organized by CSR Centre at Lakeshore Hotel in Dhaka on Nov. 16