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Bangladesh’s Cabinet Approves Changes to Labor Laws Global Retailers Join Safety Plan for Bangladesh
(about 11 hours later)
NEW DELHI – Bangladesh’s cabinet approved changes to the nation’s labor laws on Monday that officials say will expand benefits for garment workers and make it easier to form trade unions. The steps came a day after the government promised to push for higher pay in an export clothing industry with the lowest wages in the world. Under mounting pressure to improve working conditions in Bangladesh’s garment factories, several of the world’s largest apparel companies agreed on Monday to a landmark plan to help pay for fire safety and building improvements after the collapse last month of the Rana Plaza factory complex, which killed more than 1,100 people.
The new initiatives are partly in response to outrage over conditions in the country’s garment sector after the April 24 collapse of a garment-factory building, Rana Plaza, in Savar, an industrial suburb of Dhaka, the nation’s capital. By Monday afternoon, at least 1,127 people were confirmed to have died in the Rana Plaza collapse, a number that could still rise, in what is now considered the deadliest disaster in the history of the garment industry. The agreement, hailed by labor and consumer groups as a major breakthrough, came as the Bangladeshi government also took steps to respond to the April 24 disaster at Rana Plaza outside Dhaka, the Bangladeshi capital. In the last two days, the government has pledged to raise wages for garment workers and change labor laws to make it easier to form trade unions.
A top adviser to Bangladesh’s prime minister, Gowher Rizvi, said the changes approved by the cabinet – which must still be approved by the country’s Parliament – are part of a broader government effort to come into compliance with international labor standards and improve conditions for workers in an industry that is critical to the nation’s economy. The parallel announcements by global brands and the Bangladeshi government were a significant shift: For years, Bangladesh has seen some of the worst practices in the global garment industry. Wages are the lowest in the world, starting at roughly $37 a month. Factory conditions are often unsafe. Yet global brands have often sought to deflect any direct responsibility for the problems, while the government has often been tepid in protecting worker rights.
“Worker safety and worker welfare have now been brought into the forefront,” Mr. Rizvi said in a telephone interview. He said that discussions on these changes predated the Rana Plaza collapse even as he agreed that the disaster had intensified the pressure for reforms. But the Rana Plaza disaster, the deadliest in the garment industry’s history, has created tremendous pressure for change. On Monday morning, the Swedish retail giant H&M and Inditex, owner of the popular Zara chain, endorsed the safety plan. Within hours, the large Dutch retailer C&A also joined the agreement, as did the low-cost British retailers Primark and Tesco.
“Fire and building safety are extremely important issues for us, and we put a lot of effort and resources within this area,” said Helena Helmersson, head of sustainability at H&M. “With this commitment we can now influence even more in this issue. We hope for a broad coalition of signatures in order for the agreement to work effectively on the ground.”
H&M is the largest purchaser of garments from Bangladesh, and its endorsement was seen as influential to other brands. The agreement calls for independent, rigorous factory safety inspections with public accountability and mandatory repairs and renovations underwritten by Western retailers. It also enhances the roles played by workers and unions to ensure factory safety.
“H&M’s decision to sign the accord is crucial,” said Scott Nova, the executive director of the Worker Rights Consortium, a factory-monitoring group in Washington that is backed by 175 American colleges and universities. “They are the single largest producer of apparel in Bangladesh, ahead even of Walmart. This accord now has tremendous momentum.”
Labor groups and others were already trying to pressure other big brands, including Walmart and Gap, to sign onto the agreement. “We call on these companies to do the right thing on behalf of the more than 1,250 textile workers killed in Bangladesh factory disasters in the last six months, including Rana Plaza, where the tragedy is still unfolding,” said Philip J. Jennings, the general secretary of the UNI Global Union, the international association of trade unions. “This is black and white, life and death.”
Gap has been the target of an online petition that obtained more than 900,000 signatures in support of the agreement. But the company has resisted signing on, objecting to the agreement’s legally binding nature and arguing that it had already hired a fire inspector and promised $22 million in loans for factory improvements.
PVH, the parent company of Calvin Klein, Tommy Hilfiger and Izod, announced it would sign the deal, an expanded version of a proposal that PVH had already signed. The new plan lasts five years, while the previous one was to last only two. PVH also announced on Monday that it would contribute $2.5 million to underwrite factory safety improvements as part of the new plan.
Meanwhile, Bangladesh’s cabinet on Monday approved changes in labor laws. Gowher Rizvi, a top adviser to Bangladesh’s prime minister, said the changes — which still require approval by Parliament — are part of a broader government effort to come into compliance with international labor standards and improve on-the-job conditions.
“Worker safety and worker welfare have now been brought into the forefront,” Mr. Rizvi said in a telephone interview. He said discussions on these changes predated the Rana Plaza collapse but agreed that the disaster had intensified the pressure for reforms.
“This is the goose that lays the golden egg,” he said of the garment industry’s importance to Bangladesh. “Don’t kill it. We have to strengthen it. We have to nurture it. Nurturing it means fair treatment of the workers.”“This is the goose that lays the golden egg,” he said of the garment industry’s importance to Bangladesh. “Don’t kill it. We have to strengthen it. We have to nurture it. Nurturing it means fair treatment of the workers.”
Bangladesh is now the world’s second-leading garment exporter, trailing only China, and has become a popular manufacturer for top global brands by delivering lower costs, largely because of rock-bottom wages. Minimum wage in the garment industry is $37 a month. Labor unions are largely absent in garment factories, partly because of legal restrictions on organizing. In some cases, workers trying to organize unions have faced dismissals from factory bosses, as well as intimidation and harassment from local officials. Bangladesh is now the world’s second-leading garment exporter, trailing on China. Its low wages and lack of regulation have helped it attract billions of dollars in orders from Western retailers and apparel brands. Not only are wages the lowest in the world, but labor unions, which face impediments in organizing, are largely absent in garment factories. Some workers who have tried to organize unions have been dismissed or harassed.
Mikail Shipar, the country’s labor secretary, said Monday’s changes included eliminating a central restriction on union organizing and improving benefits for workers. Under the current rules, organizers must present the government with a list of names showing that at least 30 percent of workers in a factory want a union. But that list is then turned over to a factory’s owner to verify the authenticity of the names – a step that some owners have used to engage in union busting by firing or harassing workers on the list. Mikail Shipar, the country’s labor secretary, said one onerous restriction was removed by the cabinet on Monday. Under the current rules, organizers must present the government with a list of names showing that at least 30 percent of workers in a factory want a union. But that list is then turned over to the factory’s owner to verify the authenticity of the names — a step that some owners have used to engage in union busting and firing union supporters.
Now, Mr. Shipar said the list would no longer be turned over to factory owners. The list will no longer be turned over to factory owners, Mr. Shipar said, removing “a major barrier in getting registration of a trade union in a factory.”
“This is a major barrier in getting registration of a trade union in a factory,” he said. “Through the proposed amendment of the labor law, we removed this barrier.”  Other changes involve benefits. Severance and retirement payments will be increased for workers with longer tenures; annual payments under a welfare fund will be equalized so that every garment worker, regardless of the size of the factory he or she works in, will receive the same amounts.
Other changes involve benefits. Severance payments will be increased for workers with longer tenures at factories; annual payments under a welfare fund will be equalized so that every garment worker, regardless of the size of their factory, will receive the same amount. Factories will be pushed to modernize management practices and provide workers with banking accounts and direct deposit to protect against abuses by lower-level managers, like withholding or delaying wages. Government officials also are creating a wage board that would begin discussions between labor and management on setting a new minimum wage for garment workers. Mr. Shipar said the process might take six months, but officials have said that changes would be retroactive to May 1.
Government officials on Sunday announced the creation of a new wage board that would begin discussions between labor and management on setting a new minimum wage for garment workers. Mr. Shipar said the process might take up to six months, but officials have said that any wage changes would be retroactive to May 1. Bangladesh has roughly 5,000 garment factories, employing more than 4.5 million people. Nearly 80 percent are women, many poorly educated and from rural villages. In the past, even the low factory wages were better than working in the fields. But as inflation has risen in the last two years, garment workers have grown increasingly angry about low wages. On Sunday, at least 100 garment factories had to be closed as workers staged protests, demanding higher pay.
Bangladesh has roughly 5,000 garment factories, employing directly and indirectly more than 4.5 million people. Nearly 80 percent of garment workers are women, many of them poorly educated and from rural villages. In the past, even the low local wages were better than working in the fields. But as inflation has spiked in the past two years, garment workers have staged angry protests, demanding higher wages and better conditions. By Monday afternoon, the death toll at Rana Plaza had reached 1,127 people. Work crews have almost completed clearing debris and searching for the victims — yet families of missing workers continue to linger.
Mr. Rizvi, the government adviser, said the move by the cabinet on Monday is part of a broader effort to bring Bangladesh into compliance with minimum labor standards established by the International Labor Organization. This month, a high-level delegation from the organization met in Dhaka with factory owners, government officials and labor leaders and issued a joint statement pledging to introduce a labor law reform package in Parliament; to assess the structural integrity and fire safety of all factories in 2013; and hire an additional 200 government inspectors to regulate the industry. Local labor groups sifting through the rubble have found labels or documents of brands that were being produced by factories in the building. Several investor, religious, consumer and labor groups are pressing these companies to sign the new safety deal. Companies known to have obtained clothes from the factories include Benetton, Cato Fashions, Children’s Place, el Corte Ingles and Loblaws.

Julifkar Ali Manik contributed from Dhaka, Bangladesh.

Steven Greenhouse reported from New York, and Jim Yardley from New Delhi. Julfikar Ali Manik contributed reporting from Dhaka, Bangladesh.