Bangladesh is facing growing political pressure from the U.S. and Europe to improve labor conditions in the textile and apparel industry even as union leaders express worries that job cuts could result from the growing furor over the building collapse in Savar, outside Dhaka, that killed more than 400 people.
This story first appeared in the May 2, 2013 issue of WWD. Subscribe Today.
In Washington, two Democratic lawmakers sitting on House trade and labor committees on Wednesday urged President Barack Obama to convene a meeting of American and European retailers and brands, along with Bangladeshi apparel officials and labor groups, to develop a concrete action plan to address a range of issues relating to working conditions and worker rights in the Bangladeshi garment sector.
The U.S. Trade Representative’s office is reviewing whether to consider withdrawal, suspension or limitation of Generalized System of Preferences benefits given to Bangladesh, but a decision is not expected until the end of June, according to a spokeswoman. The GSP program in the U.S. does not provide duty-free benefits for apparel, Bangladesh’s largest export.
Representatives of the European Union said Tuesday that they also were considering action to pressure Bangladeshi authorities to improve labor conditions. “The EU is presently considering appropriate action, including through the Generalised System of Preferences — through which Bangladesh currently receives duty-free and quota-free access to the EU market,” EU foreign policy chief Catherine Ashton and Trade Commissioner Karel de Gucht said in a joint statement.
Dipu Moni, foreign minister of Bangladesh, told WWD that the EU statement was “very positive and very constructive.”
“It is very understandable that they have expressed their concerns on the health and safety provisions,” Moni said. “But what we want to say is that Bangladesh is trying its best, even within…given limitations and constraints, to provide proper safety and health provisions, and to also improve the labor conditions. Given [ready-made garments] is our largest export product, and the EU is our largest destination, it is understandable that they would express concerns at the recent tragedies.”
Others expressed concern, as well. “As the largest trading partner, this could lead to far more pressure for our garment workers, who could find themselves out of a job,” Rahman Masur, who is a lawyer and an activist, told WWD, reacting to the EU’s statement.
Bangladesh’s apparel exports to the EU amounted to $11.37 billion in June 2012 compared with $4.53 billion to the U.S. Bangladesh exports 60 percent of its garments to EU markets, and 23 percent to the U.S., according to figures from the Bangladesh Garment Manufacturers Employers Association.
Government officials said that what the apparel industry needed at this time was support rather than threats from retailers and other countries. “Instead of canceling orders, foreign buyers would help the workers more by working with their partners to ensure stronger compliance,” said an official, who requested anonymity since the government is not speaking about the matter officially at this time.
Wednesday was a solemn day in Savar, marking a week since the tragic collapse of the eight-story building, Rana Plaza, in Savar that housed five apparel factories. These included New Wave Style, New Wave Bottoms, Phantom Apparels, Phantom Tac and Ether Tex.
Another 19 bodies were recovered from the debris on Wednesday, bringing the death toll to 407, according to police officials. The 32 unclaimed bodies kept at the mortuaries of Dhaka Medical College Hospital and Sir Salimullah Medical College Hospital (Midfort Hospital) were also buried on Wednesday with several hundred people in attendance.
All this came as May Day was marked in the city, with an estimated 20,000 workers shouting slogans, asking for the death penalty for Rana Plaza owner Sohel Rana, for justice and for better conditions for garment workers.
A four-member delegation of the International Labour Organization led by Gilbert Fossoun Houngbo, deputy director general for field operations and partnership, arrived in Dhaka on Wednesday. While appreciating the quick rescue operation at Savar, Gilbert told the Prime Minister Sheikh Hasina that he “hoped that the victims will get full and prompt compensation.”
Hasina said that her government has been working with labor policies to heighten workers’ interests and sought the support of ILO to better implement the programs for worker welfare.
In her May Day speech, Hasina said those protestors who went on a rampage in mills and factories recently would be arrested after checking video footage. She called upon the workers “not to be misguided with false propaganda and involve in any destructive activities as those are suicidal for the country’s economy.”
BGMEA president Atiqul Islam also appealed to workers to return to work on Thursday. The time to respond to global buyers and “resume production for the betterment of the sector and to make timely shipment of the products” was at hand, he said.
But in Washington, legislators have begun to pressure the Obama administration over Bangladesh’s labor conditions. Reps. George Miller (D., Calif.) and Sander Levin (D., Mich.) sent a letter to the President calling for action.
“The mounting death toll in Bangladesh’s garment industry, with the collapse last week of the Rana Plaza, underscores the clear need for immediate action to address the crisis in working conditions and worker rights in that country,” Miller and Levin said in their letter. “This most recent tragedy repeats what has become a serious and disturbing pattern in Bangladesh — labor and workplace laws are flouted and workers’ safety and rights denied in the pursuit of lucrative export opportunities primarily to Europe and the United States. And workers, most of them young women and mothers, are left to pay the terrible consequences with their lives.”
The lawmakers noted that European and American retailers purchase two-thirds of Bangladeshi garment production.
“We urge your administration to lead an effort, together with the European Union, to bring together key European and American retailers that have sourced from Bangladesh to adopt a common response leading to a universal standard guaranteeing basic workplace safety and fundamental worker rights, whether garments are produced by direct contracting or subcontracting,” the lawmakers wrote. “That response must also include effective monitoring. We would note that there are already some proposals — for example, the Building and Fire Safety Agreement being advanced by a number of leading nongovernmental organizations and unions — that address some of these key elements.”
In a separate action on Wednesday, Miller and Rep. Jan Schakowsky (D., Ill.) sent letters to three chief executive officers whose labels were said to be found in the Rana Plaza rubble, pressing them to provide compensation to the hundreds of victims and their families and to commit to a binding agreement to improve working conditions in Bangladesh’s garment industry.
The House lawmakers, turning up the pressure on both retailers and apparel brands, sent the letters to Jane T. Elfers, ceo of Children’s Place; Ari Hoffman, ceo of Benetton USA, and Isak Andic, head of Spanish brand Mango, which is carried in major U.S. retail outlets such as J.C. Penney Co. Inc.
Miller and Schakowsky said documents received by the Committee on Education and the Workforce show that their labels were produced in some of the five apparel factories operating in the Rana Plaza building.
“As major brands pursue the lowest costs for their garments, substandard buildings and working conditions remain unabated, and the government of Bangladesh appears unprepared to adequately address the root cause of these tragedies as it promotes its growing ready-to-wear (rtw) garment industry,” they wrote in the letters.
They pressed the company heads to provide compensation immediately, support a thorough investigation into the causes of the building collapse and sign the binding Bangladesh Fire and Building Safety Agreement.
Some companies already are reacting to the tragedy, with both Primark of the U.K. and Joe Fresh of Canada promising to compensate victims of the collapse. Britain’s Matalan on Wednesday also promised to compensate victims, even though it did not currently source from any of the factories in Rana Plaza. Matalan said it sourced from New Wave until February.
After attending the Montara Circle think tank in Amsterdam, CaliLu founders Cali Norton and Lucille McGovern decided to join other like-minded retailers such as AllSaints Spitalfields in a partnership with Not for Sale, a human rights organization. CaliLu created the Freedom top. A portion of sales will go to Not for Sale. “In light of the recent Bangladeshi factory fire making these abhorrent conditions known to those with the purchasing power, CaliLu feels that now more than ever, in this global age, fashion must rally around fair-trade solutions,” the company said.
Joe Fresh has canceled a cocktail reception on May 9 to celebrate its sponsorship of Frame at Frieze New York. “It didn’t seem like the right time for a cocktail party,” a spokeswoman said. “We’re trying to be really sensitive” to the tragic events in Bangladesh. The spokeswoman said the company is making announcements today with regard to its efforts in Bangladesh.
Loblaw Cos., Canada’s largest food retailer, said it will soon announce more actions in the wake of the building collapse in Bangladesh. Loblaw sells Joe Fresh apparel in its stores. “We have taken action to address the situation including the announcement of a fund to provide relief to the victims of this tragedy,” chairman Galen Weston said during a Wednesday first-quarter financial results conference call. “There is more we will do and we will make that public over the next few days.”
Jyrki Raina, general secretary of the IndustriALL Global Union, said at a meeting hosted by the German Agency for Development Cooperation, on Monday in Eschborn, Germany, unions and a group of about 30 international brands and retailers, including H&M, Gap and Wal-Mart, agreed to finalize an agreement on fire and building safety to make Bangladesh’s garment sector sustainable.
“At the moment, each brand is trying to do something and sometimes it’s nothing more than window dressing,” Raina said. “If we want to get anything serious, it has to take place in a coordinated way, and that is what we are trying to do. What we are doing at the moment is trying to finalize the exact text and get signatures…so that companies will know by May 15 who are in and who are not.”
He added, “We…would like to see the International Labor Organization in the central coordinating role.”