After years of holding out on the issue of trade unions in the export processing zone in Bangladesh, where there are more than 450 apparel-producing factories and about 400,000 workers, the Bangladesh government has taken a major stride forward. The cabinet has approved the draft EPZ Labour Law 2016 with provisions to form legal trade unions in factories in the EPZ.
More than 120 factories are under construction in the zone, with more expected as inspections by global retailers and brands have been reviewing the additional safety requirements for factories that are located in shared buildings. After the collapse of Rana Plaza in April 2013, when more than 1,133 garment workers were killed, the problems of a shared building have become more apparent.
Several factory owners told WWD that they hope to move their factories to EPZs in the long run and avoid the complications of shared building spaces. In Dhaka, a large number of the 3,500 garment factories have one or more floors of a building that is shared with other factories, making it hard to monitor common spaces including the fire exits and adequate stairwells.
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Factories in the EPZ account for an estimated $6 billion in apparel exports. EPZ factories receive special benefits, which include a 10-year tax holiday for companies, duty-free machinery import facilities and uninterrupted gas and power supply. Workers in these areas typically get higher wages, with the Bangladesh Export Processing Zones Authority having the ability to determine wages.
Until now, trade unions have not been allowed in these areas. But even with the passage of the new law, a number of labor leaders in Bangladesh have reacted with dissatisfaction. They believe that the new law does not allow enough freedom for collective bargaining since it would allow Worker Welfare Associations, which would need to be accepted by 30 percent of the workers. These applications would need to be verified and a leader chosen after a referendum by the workers.
“The workers in the EPZ area should have the same rights as those in other areas,” said Nazma Akhter, president, Sammilito Sramik Federation.
Government officials have countered the argument, saying that EPZ workers would win the ability to bargain with factory owners, to fix wages, negotiate working hours, get retirement benefits and mandatory group insurance, compensation in case of death and other benefits.
Factory owners have been reacting slowly and have been advising caution: They claim the new law could affect and slow production, especially in light of the fact that many trade unions in Bangladesh are driven by political parties.
However, Cabinet Secretary M Shafiul Islam reiterated that the law was being framed in light of the existing Labor Law 2006 and that workers would get rights to joint bargaining.
The list of requirements submitted by the U.S. government for reinstating Generalized System of Preferences program privileges for Bangladesh requires that trade unions be allowed in the EPZ areas as well.