The slow process of fixing working conditions in the Bangladesh apparel industry has begun.
This story first appeared in the August 2, 2013 issue of WWD. Subscribe Today.
As executives from international retailers and labor organizations met with industry and government officials to talk about a labor safety accord, the Bangladesh government said Thursday that it would next week decide on a wage increase for the sector’s 38 million workers. Labor and Employment Minister Rajiuddin Ahmed Raju said Wednesday that the revised pay scale that the government had agreed to would be detailed after Eid al-Fitr festival, which is next week.
The minimum pay scale is currently $38 a month, which was revised and agreed upon in 2010, an increase of 80 percent at that time. In the last few months, workers have staged numerous protests demanding better salaries as well as improved safety procedures.
The government revealed the timing for a wage increase as a five-member delegation of retailers and labor organizations was in Bangladesh to discuss the tougher labor safety accord established by the IndustriALL Global Union. The accord is a legally binding fire and safety agreement signed by 84 Western apparel brands and retailers, but only four from the U.S. — PVH Corp., Abercrombie & Fitch Co., Sean John and American Eagle Outfitters Inc.
The meetings concluded Thursday and stirred a sense of optimism among participants that progress had been made toward resolving the complicated issue of worker safety within the Bangladesh garment industry.
“It’s exhilarating is what it is,” Jenny Holdcroft of IndustriALL told WWD. “Expectations are high and we are under some pressure to deliver, but given all the support, it should be possible. The level of cooperation has been heartening.”
The delegation included Philip Chamberlain of C&A; Aleix Gonzalez of Inditex; Christy Hoffman of UNI Global Union, and Holdcroft and Monika Kemperle of IndustriALL.
“For the first time after the collapse of Rana Plaza, there seems to be signs of real hope,” said Fazlul Hoque, who has been in on the many negotiations of the past months and on Wednesday concluded his term as president of the Bangladesh Employers Federation.
Other employers and government officials, although more cautious, said that it appeared the apparel industry was now looking like it would transform in the coming year, as buyers were finally prepared to discuss real concerns: paying more for safety rather than simply demanding it for nothing, uniform standards and a code of conduct that could work across the board.
After months of dread that the $20 million garment industry in Bangladesh may collapse as buyers move production to other countries following a spate of disasters — a fire at Tazreen Fashions Ltd. last November killed 111 workers, followed by several smaller fires this year and then the deaths of 1,132 people after the collapse of the eight-story Rana Plaza — the first visit by the accord team gave union leaders and employers optimism.
“Our objective was to explain the accord and where we have reached so far and, possibly even more important, to listen to the local stakeholders with one eye on how we are going to make this work on the local level and another on the global level,” Chamberlain of C&A said. But clearly there were areas of concern. “The one issue that kept coming back was the need to avoid duplication. We want to ensure that the industry in Bangladesh comes up with a single standard,” he added.
The IndustriALL-led accord is competing with one being developed by a North American alliance of retailers and brands, led by Wal-Mart Stores Inc. and Gap Inc. Hoque explained that there would be factories that would supply companies from both the North American alliance and the accord. “There has to be an understanding that both will work together. If they go for a common code of conduct, that will be better,” he said.
The situation is even more complex as various national programs have already been set in place with their own list of safety parameters and solutions. There is also the National Tripartite Plan of Action on Fire Safety for the Ready-Made Garment Sector in Bangladesh, which the International Labor Organization is coordinating with employers, labor and the government, and various initiatives by the Bangladesh Garment Manufacturers and Exporters Association and different government departments.
Further complicating matters is that there is no exact figure for the total number of apparel factories in Bangladesh, with the figure ranging from 3,500 to 5,000. The BGMEA has undertaken to get a more definitive count.
“We have identified 1,497 factories that accord companies are sourcing at this time, and we will release the information on these factories in the coming weeks, which includes their addresses, the number of floors, the number of employees, etc.,” said Holdcroft.
The number of factories manufacturing for both North American alliance and accord companies is expected to total about 1,700.
Among the important meetings were those between the accord signatories, the BGMEA and the Bangladesh Knitwear Manufacturers and Exporters Association. Atiqul Islam, president of the BGMEA, said that the discussion included some of the important factors facing the industry including inspections; the complexity of separating commercial buildings, which were often shared spaces; factory inspections, and the need for a BGMEA member to be on the accord’s steering committee.
While Chamberlain said the long-term objective between the BGMEA, the BKMEA and the accord members was the same — to make the industry more sustainable and safer — BGMEA officials said their concern was that a local member would ensure better implementation and an understanding of how to get things done at ground level. They also believe there is a need to include a government official to facilitate the plans turning into reality.
Holdcroft commented that the steering committee was more about administration. “We explained the structure of the accord and that it wasn’t important who was on the committee, but that we were working together and closely to find the best way forward and it became a nonissue,” she said.
Hoque agreed, but said that it would certainly help the situation to have two local members on the committee. “Our logic is that if we don’t bring industry people on the board we will have a problem at the ground level. How can we help repair things if we are not on the board?” he said. “We think it is important to have a government member as well as an industry member. It really doesn’t matter who is on the board, but it would help in terms of implementation. They said they would consider this — it is neither accepted nor rejected. We agreed that it does not matter who sits in which chair, and we agreed with the spirit.”
Other important meetings included those with the Ministry of Labor and the Ministry of Commerce, the latter to help facilitate the office that the accord team hopes to set up in Dhaka in the coming months.
Another important point that emerged from the meetings was the need to move as quickly as possible given the nine-month deadline set by the accord for safety improvements, and the amount of work and inspections required. “There is a certain pressure for everyone to act. The accord has a legally binding aspect to it which will help determine the success as well,” Holcroft observed.
On Wednesday, the ILO’s assistant director general of the Asia and Pacific region, Yoshiteru Uramoto, led a delegation in Dhaka. The ILO has been actively involved in the process, and a senior ILO member is the chairperson of the accord steering committee. Local newspapers on Wednesday quoted the labor minister as stating that the ILO would provide $40 million in assistance to the garment sector.
Many of the stakeholders in the garment industry are now trying to look forward. “Not only has the fear lessened, but we are also feeling that the buyers will not withdraw from Bangladesh. In another six months to a year, Bangladesh will gain,” said Hoque.