Bangladesh Government, Western Retailers Take Steps to Improve Garment Factories

Deborah Block
July 22,2013

Recent moves by the government in Bangladesh and western retail companies are leading to changes in the country’s garment industry. On July 15, the Bangladeshi parliament approved legislation aimed at strengthening employees’ rights and improving workplace safety.

Meanwhile, Western retail companies have come up with two separate plans to increase building safety. It's part of an effort to drastically improve the clothing industry in Bangladesh.

More than 1,100 workers died last April after the Rana Plaza garment factory collapsed in Bangladesh. That touched off intense international pressure to improve garment industry conditions, which led Bangladesh to amend its labor law.

Bangladesh’s Ambassador to the United States, Akramul Qader, said the legislation will strengthen the rights of the country's 4 million garment workers - most of them women.

“Allowing them the formation of unions, pension benefits and other benefits for the workers," said Qader.

Kimberly Elliott, an expert in international trade policy for the Center for Global Development, said the law may help avert another building collapse.

“It does take some steps to try to strengthen the building safety code and to make it more difficult to get a permit to add floors, which was a problem in the Rana building collapse,” she said.

But that can only happen if there are enough inspectors, which Qader admits is a problem since there are at least 5,000 factories, and the government does not know where all of them are located.

“We don’t have enough inspectors to go around. We’re taking different steps now to insure that a good number of inspectors are in place, so that they can go and inspect the factories and submit their reports, and the government can take action,” said Qader.

The law prohibits discrimination based on sex and disability and calls for equal pay for equal work. Factories are required to place 5 percent of profits into an employees’ welfare fund, though that does not apply to the export sector, which includes a large part of the work force.

Elliott said another key provision is that workers no longer need approval from factory owners to form unions.

“There’s provisions to try to avoid a problem that has been a big one in the past of the labor ministry sharing the names of union supporters with management who can then fire them or move them to a different factory, and so that has been changed,” said Elliott.

Critics say factory owners may still be able to create obstacles for unions, however, and the government can end strikes.

The law was passed soon after the U.S. said it was suspending Bangladesh’s trade preferences - though that move is considered symbolic since apparel exported from Bangladesh is not eligible for duty free benefits.

European retailers recently finalized a plan to accept legal responsibility for safety, and are conducting inspections at their factories in Bangladesh. North American retailers recently announced a separate safety accord that does not hold them liable.

But Elliott said that ultimately it will be up to the Bangladeshi government to push through the improvements to avert another garment building disaster.

"I think a big test for the Bangladeshi government is going to be willingness to enforce, and that has not always been so clear in the past. But I think if the will is there, that will make a huge difference,” she said.

Bangladesh is the world’s second largest garment exporter after China. Its textile sector is the largest single money-maker for the country.