The government in Bangladesh has finalized rules that will enable a welfare fund for labor.
Tofail Ahmed, commerce minister, made the announcement after negotiations and discussions with workers, officials of the Bangladesh Garment Manufacturers and Exporters Association and other representatives.
“Garment factory owners will give 0.03 per cent of their total export earnings, which would be approximately $8 million per year, to the Bangladesh Labor Welfare Foundation, “ Shahidullah Azim, vice president of the BGMEA, told WWD. “The money will be used for the workers as well as money that will be available for compensation in the case of injury or death.”
He said the amount would go up in coming years as the industry is expected to grow from the $24.5 billion in 2014 to a target of $50 billion in 2021.
The question of compensation for injured workers has been causing concern in Bangladesh as months of research and thought have gone into the compensation of victims and families of the dead of Rana Plaza. The death of 1,133 garment workers in the collapse of the eight story Rana Plaza in April 2013, and an earlier fire at Tazreen Fashion Ltd in November 2012 when 111 garment workers were killed, brought up the importance of a continuing and clear policy in the case of accidents.
These rules will be published as a gazette very shortly, he said.
In addition, Azim said that the issue of Occupational Safety and Health (OSH) committees that are now becoming a major focus of the initiatives of the two groups of global retailers and brands – the Accord and the Alliance – which represent more than 200 major companies will be formed by the trade unions or the participation committee at the factory.
“There will be no separate representation for these committees, which will be overseen by the inspector general of factories,” he said.
Both the Accord and the Alliance have plans to make the OSH committees a part of their agenda in 2015.
Exports from the garment industry from July 2014 to March 2015 totaled $18.63 billion. The industry has been targeting exports of $27 billion by the end of the financial year in July. Bangladesh is the second largest exporter of garments in the world, after China.
Several factory owners are taking a more considered stand to help combat a slowdown. “More than 2,100 factories have closed down and we are left with 3,500 factories,” said Azim.