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U.S., EU, Bangladesh Set Talks on Safety

The governments plan to launch a “multi-stakeholder” initiative on Monday in conjunction with the International Labor Organization.

WASHINGTON — The governments of the U.S., European Union and Bangladesh plan to launch a “multistakeholder” initiative on Monday in conjunction with the International Labor Organization, aimed at improving labor, health and safety conditions in the Asian nation’s apparel industry, according to documents obtained by WWD.

This story first appeared in the July 8, 2013 issue of WWD.  Subscribe Today.

The meeting comes in the wake of last week’s decision by the U.S. to suspend Generalized System of Preferences benefits for Bangladesh in light of the nation’s health and safety issues in its factories. The GSP benefits do not cover apparel and textiles, however.

The EU’s GSP benefits do include apparel and textiles and the trading bloc is the largest importer of apparel from Bangladesh. EU Trade Commissioner Karel De Gucht is hosting a high-level meeting titled “Staying Engaged — A Sustainability Compact With Bangladesh,” in Geneva on Monday to launch the initiative to pressure Bangladesh to improve working conditions.

Dubbed the “Compact,” the plan comes amid intensifying pressure to reform Bangladesh’s garment industry in the wake of the Rana Plaza Building collapse in April that claimed the lives of 1,129 workers and the Tazreen Fashions fire in November that killed 112 garment workers. It will involve representatives from the EU, U.S. and Bangladeshi governments, as well as the ILO, employees and employers in the apparel industry, Bangladeshi trade groups and other stakeholders, according to a European Commission backgrounder on the event.

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“The Compact will contribute to upholding labor rights, health and safety at work, and responsible business conduct in the ready-made garment industry in Bangladesh,” the European Commission said. “The recent collapse of a garment factory in Bangladesh was a grave tragedy that must not be repeated. These representatives are therefore urgently intensifying ongoing efforts to improve working conditions and promote corporate social responsibility in the ready-made garment industry. The high-level discussion…will focus on the agreement of a ‘Sustainability Compact With Bangladesh.’”

The global fashion industry has taken separate paths in addressing fire and building safety in Bangladesh. A group of 70 primarily European brands and retailers has signed a five-year, legally binding accord with labor groups, led by the IndustriALL Global Union, that requires companies to finance safety improvements, establishes independent fire-safety inspections and increases the involvement of workers in the process. Three U.S. companies — PVH Corp., Abercrombie & Fitch and Sean John — have signed that accord.

A new steering committee appointed by the members of the IndustriALL-led accord released its implementation plan on Sunday in Geneva. Initial inspections at every factory will be completed within nine months, while renovations and repairs will focus on issues that pose immediate risk to workers such as inadequate emergency infrastructure, including fire exits, fire training and evacuation, and fundamental flaws that could lead to partial or total structural failure.

In the interim, the plan outlines that “an emergency protocol will ensure swift action to protect workers at any factory where existing inspection programs or worker reports identify an immediate threat to life and limb.”

During the emergency phase, workers will be informed of the potential danger and their right to refuse to enter, and the owner will be told to cease operations pending further investigation or repairs. Workers will be paid while the factory remains closed.

Factory data from all company signatories is expected to be collected by July 15, along with details about each factory building. The plan also calls for an aggregated list of all factories covered by the accord to be publicly disclosed.

The six executive members of the steering committee includes representatives from Inditex, PVH and N Brown Group, as well as from IndustriALL, Uni Global Union and the Bangladesh Council of Trade Unions. An official from the ILO will serve as a nonvoting chair of the committee.

Meanwhile, a North American alliance of retailers and brands, led by Wal-Mart Stores Inc. and Gap Inc., has been developing its own action plan, which sources said could be unveiled here early next week.

“All companies — Bangladeshi, European and international ones — should respect labor standards throughout their supply chain in line with internationally recognized corporate social responsibility principles and in dialogue with workers’ representatives,” the EC said. “In this respect, the Accord on Fire and Building Safety signed so far by [more than] 50, mostly European, major fashion and retail brands sourcing garments from Bangladesh, is a first concrete response.”

In addition to De Gucht, Bangladesh Foreign Minister Dipu Moni is slated to speak at the event on Monday, as are officials from the U.S. State Department, the ILO, Bangladesh Garment Manufacturers and Exporters Association, and IndustriALL and UNI Global Union.

In revealing the U.S.’s decision to suspend GSP benefits, U.S. Trade Representative Michael Froman said, “The recent tragedies that needlessly took the lives of over 1,200 Bangladeshi garment factory workers have served to highlight some of the serious shortcomings in worker rights and workplace safety standards in Bangladesh. While taking this action today, the administration is also initiating new discussions with the government of Bangladesh regarding steps to improve the worker rights environment in Bangladesh so that GSP benefits can be restored and tragedies like the Rana Plaza building collapse and Tazreen Fashions factory fire can be prevented.”

The suspension of benefits will come 60 days after the notice is published in the Federal Register. The entire U.S. GSP program expires at the end of July and must be renewed by Congress. The U.S. did not make any stipulation for the renewal of Bangladesh’s GSP status.

While the punitive action by the U.S. will affect as much as $34.7 million in Bangladeshi imports into the U.S. under GSP, the hit to Bangladesh’s economy was considered modest, since apparel is not covered.