REPORT

ON

BANGLADESH EXPORT PROCESSING ZONES AUTHORITY (BEPZA) &

IT’S CONTRIBUTION TO ECONOMIC DEVELOPMENT, ETHICAL ISSUES
IN VARIOUS ASPECT

SUBMITTED TO:

TOUFIQUL ISLAM

SUBMITTED BY:

Tazin hasan Ruponty – 1120837

Abu Sufian - 16

Shanu sumaya - 16

Independent University of Bangladesh (IUB)

DATE OF SUBMISSION: 21 NOVEMBER , 2016

 CONTENT
1. Introduction

2. Profile of BEPZA (Bangladesh Export Processing Zones Authority) & details of establishment

3. Management Structure of BEPZA

4. Standard of EPZs and it’s contribution to Export

5. Financial Contribution of BEPZA

6. Implementation of Monetary Policy of BEPZA

7. Regional Development (Economic)

8. Ethical issues of BEPZA

a) Human Resource Management

b) Employees & Workers

c) Financial activities

9. Marketing activities of BEPZA

10. Corporate Social Responsibilities (CSR) activities

11. EPZs’ Workers are Satisfied with Facilities & Labour Rights

12. Trade Union in BEPZA

13. Government negotiation

14. Legal Protection For The Investors-

15. Unethical aspects and limitations

16. Recomendation

17. Conclusion
INTRODUCTION:
This assignment provides us a great opportunity to get familiar with business that are practiced in
BEPZA mostly we are going to talk about the ethical business practice as it’s the prime objective
for conducting the study and generating the report related to it. The reason behind of choosing
Garments industry is that a EXPORT is a vital financial way that creates a strong economic
structure in the country. Bepza contributee country’s economic development.

PROFILE OF BEPZA:
In order to stimulate rapid economic growth of the country, particularly through industrialization,
the government has adopted an 'Open Door Policy' to attract foreign investment to Bangladesh.
The BEPZA (Bangladesh Export Processing Zones Authority) is the official organ of the
government to promote, attract and facilitate foreign investment in the EPZs under Prime
Minister’s Office. Besides, BEPZA as the competent Authority performs inspection &
supervision of the compliances of the enterprises related to social & environmental issues, safety
& security at work place in order to maintain harmonious labor-management & industrial
relations in EPZs. The primary objective of an EPZ is to provide special areas where potential
investors would find a congenial investment climate free from cumbersome procedures.

About EPZ:
An export processing zone (EPZ) is defined as a territorial or economic enclave in which goods
may be imported and manufactured and reshipped with a reduction in duties / and/or minimal
intervention by custom officials (World Bank 1999).

Bangladesh EPZ's at a glance:

Chittagong EPZ

Dhaka EPZ

Mongla EPZ

Ishwardi EPZ

Comilla EPZ

Uttara EPZ

Adamjee EPZ

Karnaphuli EPZ
MANAGEMENT STRUCTURE OF BEPZA:

BEPZA has two tier administrations- Board of Governors and Executive Board. In details,
management structure of BEPZA is explained below:

a) Board of Governors: This board is chaired by the honorable Prime Minister of the
People’s Republic of Bangladesh. Executive Chairman is ex-officio the Member
Secretary of the Governor’s Board. Ministers of different ministries of the government
are also members of board of governors.

b) Executive Board: This board is headed by the Executive Chairman. There are three
(03) members of this board:
i) Member (Investment Promotion),
ii) Member (Engineering), and
iii) Member (Finance)

c) Export Processing Zones (EPZs): The zones are headed by General Manager.
There are six (06) core departments:
i) Accounts & Finance Department;
ii) Administration Department;
iii) Commercial Operation Department;
iv) Engineering Department;
v) Industrial Relation Department and
vi) Security Department

STANDARD OF EPZs & IT’S CONTRIBUTION TO NATIONAL EXPORT:

EPZ has emerged to attract capital investment and has made a remarkable progress in multiple
sector of social, political, cultural and economic development of Bangladesh. Few steps has also
been taken to attract Foreign Direct Investment (FDI) and facilitate further industrialization in
order to boost up economic development. EPZs have been creating significant contribution to the
gradual employment, especially empowerment of women, which supports the obective of
Millennium Development Goals (MDGs).

BEPZA has also accelerated the privatization effort of the government. Investment, Export and
Employment are the driving forces of a country’s economy and EPZs of Bangladesh have great
contribution to these forces.

Contribution to National Export:

Bangladesh has achieved phenomenal export success through the EPZs. In the total foreign
exchange earnings of the country through exports. In FY 2014-15 total export was US $
46141.159 millions whether in FY 2015-16 it’ volume of export is US $ 52817.47 millions. In
2015-2016 financial year, BEPZA has solely contributed 19.29% of total national export. It’s a
huge contribution for any particular organ of Prime Minister’s Office to national economy.

FINANCIAL CONTRIBUTION OF BEPZA

01. Nari Project

02. BEPZA School and College
03. MCTB Hospital
04. Female Dormitory
05. Investors’ Club
06. Commissariat
07. Investors’ Dormitory
08. Capacity Building of BEPZA

IMPLEMENTATION OF MONETARY POLICY OF BEPZA

BEPZA has central Accounts & Finance (A & F) Department in Executive Office in Dhaka.
Member (Finance) leads in formulating and implementing monetary policy with the approval of
the Executive Chairman of BEPZA.

REGIONAL DEVELOPMENT BY BEPZA

There is no room for doubt that BEPZA is one of the most successful stories behind the
noticeable improvement in the balanced regional economic development of Bangladesh. In fact,
the vision, mission and objectives of BEPZA is tactfully designed to ensure a balance in
economic development in different parts of the country. The location of the existing eight (8)*)
EPZs is strategically planned to serve the purpose of socio-economic development, women
empowerment in the particular regions. Followings are the major points of achievement of
BEPZA in terms of regional development in Bangladesh-

 Reduction of unemployment in the regions surrounding the EPZs

 Reduction in income inequality in the EPZ areas
 Creation of skilled manpower in the rural areas
 Transfer of technology to boost the productivity of the local manpower
 Empowerment of women in the rural areas
 Discouraging child labour in the rural areas and educating them properly
 Helping the rural people to join and contribute directly to the mainstream economy.

Currently, the number of workers working in the eight EPZs is more than four lac and
approximately 70% of the workers are female who are contributing to the solvency of their
family. Their decision making power in the family is getting more strong day by day. Moreover,
the socio-economic infrastructure of areas adjacent to the EPZs are getting more developed. The
inclusive strategy of BEPZA to build a stronger and economically prosperous Bangladesh with
the equal contribution from both side i.e. men and women specially in the less developed regions
has done a world of good to the national economy of Bangladesh.

ETHICAL ISSUES OF BEPZA

a) Human Resource Management: BEPZA has it’s own recruitment policy to catch talent
employees. It recruits fresh and meritorious graduate of reputed universities. Technical and
job related training are given to employees. Beside this, on the job training are also given.
Training is a crucial part of BEPZA for Annual Performance Agreement (APA) to establish
and achieve government’s goal. Job rotation and transfer, job promotion are also regularized
for creating job satisfaction among employees. BEPZA is also positive to create leadership
approach among employees. From the enterprise viewpoint, it applies existing rules
[BEPZA Instructions 1 & 2] for sound HRM practices by the company management.

b) Employees & Workers: As an authority BEPZA is always keen to ensure win-win

situation between itself and investors. Beside this, every EPZ has Industrial Relation (IR)
department to ensure 100% social compliance of the established companies/enterprises.
BEPZA treats employees and workers as well as management as the trusted family
members. Ethical issues are highly considered and practiced among stakeholders.

c) Financial Activities: BEPZA is always committed to ensure financial accountability and

transparency regarding investment, export, and import related matters. It has Audit
department for regular inspection on financial issues. Financial Ethics is highly prioritized
and practiced to establish itself a brand to investors.

MARKETING ACTIVTIES OF BEPZA

BEPZA has an active and visionary Public Relations (PR) department which always attempts to
promote BEPZA as a brand in home and abroad. It advertises success and contribution of EPZs
in media. BEPZA also joins national and international trade and investment fair every year at
marketwise EPZs as reliable and trusted investment hubs. PR Departments annually publishes
reports, does statistical forecasts, introduces investor guide, BEPZA bulletin, banner, placards,
festoons, promotional CD/DVDs and distribute them among investors to attract local investment
and FDI.
CSR & PROMOTIONAL ACTIVITIES OF BEPZA

To materialize the vision and mission of BEPZA, It has been straining to the utmost of its ability
since its birth in 1980 and has now become a global brand to the local and foreign investors. For
promotional activities, BEPZA has a separate department named Public Relations (PR)
Department headed by a general manager who attends different national and international trade
fairs to encourage local and foreign investors to invest in the EPZs of Bangladesh. Major types
of the promotional activities of BEPZA are listed below-

 Attending different national and international investment seminars with the incentive
plans for the existing and potential investors.
 Arrangement of investment seminar and symposium in different EPZs where different
national and international business groups are cordially invited to know about the
attractive investment incentives and other facilities existing in the EPZs and those
facilities which will be available soon in future.
 Publishing the accomplishments of BEPZA from time to time in the national and
international dailies and other papers that serve the purpose of advertisement.
 Attending different national and international TV talk-shows to let the potential investors
and all other stakeholders know about the investment and employment opportunities inj
the EPZs of Bangladesh through open discussion and Q&A sessions.

Preparing and distributing updated bulletins depicting achievement and contribution of BEPZA
for example increase in FDI, employment creation, total investment, percentage of contribution
in the national economy etc.

EPZs’ Workers are Satisfied with Facilities & Labour Rights-

The working environment of EPZs is very good. Workers at the EPZs are getting higher salary
and other facilities than non EPZ workers. They are getting the opportunities to bargain with the
owners through Workers Welfare Association (WWA).

65% of the EPZs workers are female.  BEPZA always tries to sustain a congenial working
atmosphere giving the highest priority on workers’ rights, welfares & safety including medical
and other compliances issues. He said that BEPZA believes in Workers-Management-Owners
synergy. Investors of the EPZs take care of the workers including recreation and other matters
under their Corporate Social Responsibility (CSR) activities. Mentioning the workers
representative by the direct vote of the workers he said that already 231 nos. of WWA have been
formed which are acting as CBA for the workers.
TRADE UNION IN BEPZA

Trade Union is allowed in the form of Workers’ Welfare Association (WWA). It has been
functioning as Collective Bargaining Agents (CBAs) in the EPZs. EPZ workers always enjoy
their lawful rights through the WWA.

Bangladesh Export Processing Zones Authority (BEPZA) is always concerned about protection
of labors’ rights and benefits. In this regards, Workers Welfare Associations (WWA) are formed
in enterprises of EPZs as Trade Union. Earlier, EPZ Workers Association & Industrial Relations
Act 2004 is enacted to ensure the rights for freedom of association and collective bargaining of
EPZ workers. In 2010, existing act is amended as “EPZ Workers Welfare Association (WWA) &
Industrial Relations Act 2010”. Generally, Workers Welfare Association (WWA) in EPZs are
treated as Trade Union in BEPZA.

Although, investors are very annoyed to Workers Welfare Association. ILO & AFL-CIO are
always concerned on this issue.

EPZ Workers Association & Industrial Relations Act 2004

Process of Formation of WWA:

a. Referendum: It’s called Yes/No vote given by the workers for introducing WWW or not
in industries of EPZs.

Process of referendum: EPZ office issues a letter to respective company for taking necessary
measures to start process of conducting referendum among eligible workers (There is a
deification of eligible worker in the act). Company must follow these processes:

i) Company will distribute “Kha” Form among eligible workers.

ii) Minimum 31% eligible workers will fill in distributed “Kha” Forms with finger print.
Company must submit the completed “Kha” forms to EPZ office.

iii) EPZ office will form a committee (Total seven: with the combination of officers,
company’s employee and workers) for conducting Referendum and WWA Election.

iv) In referendum, If 51% response is “Yes” then subsequent measures are taken for
Executive Election. If response is “No”, then it takes one (01) year to restart the referendum
process.

v) Result of referendum along with constitution formation committee (if referendum result is
Yes) is sent to Executive Office of BEPZA.
 vi) After approval of the committee, a pattern of constitution for WWA is sent and approved
by the Executive Chairman. Later, registration certificate of WWA is issue to the company
by the Executive Chairman of BEPZA.

b. Executive Election:

After receiving registration certificate of WWA, the Executive Election process is started.
Activities of casting vote for Election are taken to form WWA.

i) EPZ office proclaim schedule for holding election of Executive Council for formation of
WWA mentioning date, time, venue and number of positions in which eligible workers may
contest.

Minimum number of members for WWA Executive Council:

01. President 02. General Secretary 03. Treasurer 04. Vice-President 05. Member

ii) Nomination Form is distributed among eligible workers. Interested workers submit their
nomination. Later, EPZ office distributes “Emblem” for the positions.

iii) Election is held for formation of WWA Executive Council on scheduled date with the
participation of eligible workers and in presence of company management and EPZ officials
conducted by committee of WWA Election. If more than one contestant is not found, then
selection procedure is automatically followed.

iv) WWA Executive Council is valid for three (03) Years. Members of the WWA Executive
Councill are representatives of the workers for negotiating any issue with owner or
management of the company for labor issues.

14. GOVERNMENT NEGOTIATION

Government of Bangladesh (GOB) are always concerned about welfare of EPZs for economic
development through attracting FDI, boosting up export, employment generation and introducing
technical & technological logistics. To ensure investment-friendly atmosphere in EPZs,
government sometimes negotiate with local and international stakeholders’. Negotiation issues
are taken into consideration of ensuring monthly minimum salary/wages for workers, introducing
Trade Union in the form of Workers Welfare Associations (WWAs), fair labor practice,
industrial safety and sound workplace atmosphere. For catching potential investors in EPZs
government do some negotiations for win-win situation.
Legal Protection For The Investors :

Signatory of
 MIGA (Multilateral Investment Guarantee Agency)
 ICSID (International Centre for Settlement of Investment
Dispute)
Member of
 WIPO (World Intellectual Property Organization)
 OPIC (Overseas Private Investment Corporation)

UNETHICAL ASPECTS & LIMITATIONS:

Unethical activities practiced by management and workers: Management and workers

sometimes intends to practice unethical issues which are restricted according to BEPZA
Instructions 1 & 2.

Sometime workers are deprived by the company management’ poor labor practices. These are:

a. Delay in salary/wages payment;

b. Salary/wages not paid as per rules;
c. Overtime job may not calculate;
d. Casual Leave may not be given
e. Sick leave may not recommended
f. Provident Fund/Annual Increment not given
g. Force termination/retrenchment

Sometime, workers also did some mistakes:

a. Absent from his/her work without prior notice
b. In-subordination
c. Theft of goods or other items
d. Willful destroy office assets
e. Negligence of work

RECOMENDATION:
Bangladesh economy at present is more globally integrated than at any time in the past. Our
Garments Industries can improve their position in the world map by reducing theoverall
problems. Such as management labor conflict, proper management policy,efficiency of the
manager, maintainable time schedule for the product, proper strategic plan etc.Government also
have some responsibility to improve the situation by providing- proper  policy to protect the
garments industries, solve the license problem, quickly loadingfacility in the port, providing
proper environment for the work, keep the industry free from all kind of political problem and
the biasness. Credit must be provided when theindustry fall in need.

CONCLUSION: The industry plays a key role inemployment generation and in the provision
of income to the poor. Bangladesh needs to remove all the structuralimpediments in the
transportation facilities, telecommunication network, and power supply, management of seaport,
utility services and in the law and order situation.