In Bangladesh, the government has started the minimum wage setting process for the ready-made garment (RMG) industry. With no minimum wage increase in five years, the current level falls way behind what is needed for a worker to cover his/her basic needs.  In line with our ACT on Living Wages membership, Tchibo supports efforts for a higher minimum wage for garment workers and would like to highlight the importance of taking into consideration the due diligence and calculations put forward by the negotiating parties, some of which represent IndustriALL affiliates in Bangladesh¹. We sincerely hope and urge that the RMG Minimum Wage Board members reach a negotiated consensus that will cover the minimum income necessary for a worker to meet the basic needs of himself/herself and his/her family including some discretionary income².

In the worldwide garment industry, minimum wages fall short to meet living wage levels and Bangladesh is no exception. However, the right to an adequate standard of living represents a human right. Fair wages enable a stable production and continued progress towards a sustainable industry and ensure that companies meet (legal) due diligence requirements.

Because for a single company it is not possible to achieve the payment of higher wages on a large scale, Tchibo was a founding member of ACT (Action, Collaboration, Transformation) on Living Wages. ACT is an agreement between 19 brands and IndustriALL Global Union that aims to achieve living wages for workers in the global garment industry through collective bargaining at industry level and responsible purchasing practices.

We acknowledge the crucial contribution that we as a buyer need to make through our purchasing practices and the engagement with our suppliers and producers to enable the payment of higher wages. For more info, please also refer to the ACT letter to the RMG Minimum Wage Board. Within our ACT membership, Tchibo has committed to five particular responsible purchasing practices including that increases in negotiated wages are reflected in the labour components of costing calculations.

Bangladesh has been an important sourcing country for garments for Tchibo for decades and we commit to continue sourcing from Bangladesh after the wage increase has been implemented. In line with legal due diligence requirements, our sourcing strategy takes countries’ human rights record including the right to Freedom of Association and Collective Bargaining into account. We, therefore, are concerned about the increasing repression and harassment of trade union leaders in the country.  We expect that the government will strengthen its approach to create an enabling environment for workers und unionists to exercise their right to form and join unions as well as to collectively bargain. Against this background, we trust that the unions’ position on the new minimum wage will be considered.

Overall, Tchibo recognizes with urgency the need for the RMG Minimum Wage Board to agree through a peaceful process to a higher minimum wage for the sector. We urge the Minimum Wage Board to reach a consensus which secures an income necessary to support the living costs for workers and their families.

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¹ Please refer to the IndustriALL affiliates letter submitted to the RMG Minimum wage board on 8th of August, https://www.industriall-union.org/bangladeshi-unions-demand-increased-minimum-wage-for-garment-workers.
² This should be earned during legal normal working hour limits.