Bangladesh’s Prepared-Made Garment Trade Beneath International Scrutiny  – Brooklyn Sports activities & Leisure Legislation Weblog

Background 

Eleven years in the past, the Rana Plaza constructing in Dhaka, Bangladesh, collapsed resulting from what consultants stated had been structural failures; killing greater than 1,100 individuals and injuring 2,500.¹[1] Elizabeth Paton, A Grim Anniversary for Survivors of the Rana Plaza Catastrophe, N.Y. Instances (Apr. 24, 2023), https://www.nytimes.com/2023/04/24/style/rana-plaza-anniversary.html.; Hopkins, Tansy, Reliving the Rana Plaza manufacturing unit collapse: a historical past of cities in 50 buildings, day 22, The Observer (Apr. 23, 2015), https://www.theguardian.com/cities/2015/apr/23/rana-plaza-factory-collapse-history-cities-50-buildings.This tragedy, one of many deadliest industrial accidents in historical past, uncovered vital points inside Bangladesh’s ready-made garment (RMG) {industry}, together with poor labor circumstances, insufficient employee security, and low wages. Prepared-made clothes are pre-manufactured textile merchandise produced in bulk by the clothes {industry}. ²[2] Transport Data Service, Prepared-Made Clothes, https://www.tis-gdv.de/tis_e/ware/textil/konfektion/konfektion-htm In response to the Rana Plaza tragedy, the Bangladeshi authorities was below immense strain to enhance their manufacturing unit circumstances and staff’ rights. Whereas the catastrophe served as a serious catalyst for motion, the federal government had already begun taking steps to deal with labor circumstances. They signed the Accord on Fireplace and Constructing Security in Could 2013, amended its Labour Legislation in 2013 and 2018, and launched the Labour Guidelines in 2015, which was later revised in 2022.³[3] S M Abu Nayem Ahmed, Current Adjustments of Labour Legislation and its implication, Institute of Chartered Accountants of Bangladesh (Nov. 27, 2023), https://www.icab.org.bd/publication/information/4/1121/Current-Adjustments-of-Labour-Legislation-and-its-Implication The Accord is a five-year legally binding settlement between manufacturers and commerce unions to make sure a protected working surroundings within the Bangladeshi RMG {industry}.⁴[4]4 Bangladesh Accord, https://bangladeshaccord.org (final visited Nov. 15, 2024). These reforms have confronted vital challenges in enforcement, with many staff and advocates arguing that they haven’t led to significant or sustained modifications in working circumstances. Whereas these initiatives exhibit a dedication to addressing labor points, their effectiveness stays questionable, as evidenced by persistent protests and worldwide scrutiny. 

Bangladesh is without doubt one of the largest exporters of ready-made clothes, with the RMG sector accounting for 84% of its exports and using hundreds of thousands.⁵[5] Achim Berg et. al, What’s subsequent for Bangladesh’s garment {industry}, after a decade of development?, (Mar. 25, 2021), https://www.mckinsey.com/industries/retail/our-insights/whats-next-for-bangladeshs-garment-industry-after-adecade-of-growth. In keeping with the World Commerce Group’s World Commerce Statistics 2023, Bangladesh and america exhibit stark contrasts of their export efficiency for ready-made clothes. Bangladesh ranks because the third largest exporter globally, accounting for 8.65% of the world market share, with an export worth of $47.39 billion.⁶[6] World Commerce Group, World Commerce Statistical Assessment 2023, https://www.wto.org/english/res_e/statis_e/statistics2023_e.htm (final visited Dec. 4, 2024). In distinction, america ranks tenth, contributing only one.31% of the worldwide market share, with an export worth of $7.18 billion.⁷[7]Id. This highlights Bangladesh’s dominant position as a key world provider of RMG, whereas the U.S. performs a comparatively minor position within the export panorama, reflecting its give attention to home consumption and import reliance on this sector. The numerous disparity underscores the very important position of the RMG sector in Bangladesh’s economic system, motivating the nation’s efforts to introduce labor reforms to help its workforce and maintain its world competitiveness. 

Bangladesh Labour Legal guidelines 

The Bangladeshi authorities enacted the Labour Legislation Act in 2006 and the Labour Guidelines in 2015 to manage labor practices because the nation’s economic system started a interval of speedy growth relating to RMG exports.⁸[8]UN Information, Revised Bangladesh labour legislation ‘falls brief’ of worldwide requirements (July 22, 2013), https://information.un.org/en/story/2013/07/445222. The 2006 Labour Legislation Act was subsequently amended in 2013, and the 2015 Labour Guidelines had been additional revised in 2022. 

2006 Labour Legislation Act  

Enacted in 2006, the unique Labour Act promulgated provisions for wages and compensation for office accidents, in addition to constructing security protocols and hearth security precautions.⁹[9]ILO Assertion on Reform of Bangladesh Labour Legislation, Int’l Labour Org. (July 22, 2013), http://www.ilo.org.world.about-the-ilo/media-centre/statements-and-speeches/WCMS_218067/lang—en/index.htm. Regardless of the enactment of the Labour Legislation Act, enforcement was ineffective resulting from an under-resourced Inspection Division, which had solely 18 inspectors for about 100,000 factories within the Dhaka district.¹⁰[10]Human Rights Watch, Bangladesh: Tragedy Exhibits Urgency of Employee Protections, (Apr. 25, 2013), https://www.hrw.org/information/2013/04/25/bangladesh-tragedy-shows-urgency-worker-protections. Moreover, fines for violations had been minimal, and inspectors usually gave manufacturing unit house owners advance discover of their inspections, undermining compliance with security laws.¹¹[11]Id. These shortcomings created a regulatory framework that, whereas was promising on paper, failed to guard staff in apply. 

2013 Modification 

Beneath strain from each Bangladeshi residents and worldwide stakeholders, such because the Worldwide Labour Group following the Rana Plaza catastrophe, the Bangladeshi Parliament enacted reforms to the Labor Act in 2013. ¹²[12]Worldwide Labour Group, ILO assertion on reform of Bangladesh labour legislation, (Jul. 15, 2013) https://www.ilo.org/world/about-the-ilo/newsroom/statements-and-speeches/WCMS_218067/lang–en/index.htm. The 2013 amendments launched notable modifications to enhance employee protections and handle worldwide issues, together with increasing the legislation to cowl sectors like non-profit training and healthcare and permitting staff in non-union workplaces to elect representatives to Participation and Security Committees. Moreover, the amendments launched measures to ban discrimination based mostly on intercourse and incapacity, guaranteeing honest wages for equal work. Nonetheless, critics famous that these modifications fell wanting absolutely assembly Worldwide Labour Group (ILO) requirements. 

The Human Rights Watch argued that these measures didn’t meet as much as ILO requirements.¹³[13]Human Rights Watch, Bangladesh: Amended Labor Legislation Falls Quick, (Jul. 15, 2013) https://www.hrw.org/information/2013/07/15/bangladesh-amended-labor-law-falls-short. A major concern was that, though the Labour Amendments had been revised to align to the Worldwide Labour Group (ILO) standards-such as guaranteeing freedom of affiliation and the rights to prepare and cut price collectively—different provision remained unchanged, together with the requirement for a good portion of staff to hitch a union earlier than it might be registered.¹⁴[14]Id. Moreover, the precise to strike remained difficult resulting from bureaucratic hurdles and the federal government retaining broad authority to halt strikes below vaguely outlined phrases.¹⁵[15]Id. The amended legislation launched “Participation Committees” and “Security Committees” for workplaces with over fifty staff, the place non-union workers elect their representatives.¹⁶[16]Id. Nonetheless, these committees lacked clear roles and had been largely ineffective. Their obligations overlapped with these usually dealt with by unions, which had been higher outfitted to signify and shield staff’ pursuits.¹⁷[17]Id. Furthermore, the revised Labour Legislation granted the federal government higher management over unions’ entry to international funding, which raised issues about authorities interference in staff’ organizations.¹⁸[18]Accord Chambers, Bangladesh Labour Guidelines 2022 Amendments, (Could 8, 2023), https://accordchambers.com/insights/bangladesh-labour-rules-2022-amendments/. Lastly, issues continued relating to the Bangladeshi authorities’s dedication to implementing these new provisions, primarily resulting from its observe report of insufficient regulatory oversight and failure to implement earlier measures successfully.¹⁹[19]Human Rights Watch, supra observe 10.

2015 Labour Guidelines 

The Bangladesh Labour Guidelines (BLR) had been enacted in 2015 to complement the Labour Act of 2006 and offered detailed procedural tips for implementing labor requirements.²⁰[20]Bangladesh Labour Guidelines 2015, S.R.O. No. 291-Legislation/2015, https://bef.org.bd/wp-content/uploads/2021/08/Bangladesh-Labour-Guidelines-2015-English_Unofficial.pdf. These guidelines addressed varied facets of employment, together with the formation of commerce unions, office security measures, maternity benfits, and welfare funds.  

Whereas the BLR was meant to bridge the hole between statutory provisions and sensible enforcement, its influence has been restricted by systemic challenges. Weak regulatory oversight and insufficient resourses have hindered efficient implementation, leaving many staff with out the protections these guidelines had been designed to offer. Critics argued that that whereas the BLR launched much-needed readability to labor requirements, it failed to deal with the deeper problems with enforcement and accountatbility that continute to plague the RMG sector. ²¹[21]Human Rights Watch, “Whoever Raises Their Head Suffers the Most”: Staff’ Rights in Bangladesh’s Garment Factories 25–28 (2015), https://www.hrw.org/report/2015/04/22/whoever-raises-their-head-suffers-most/workers-rights-bangladeshs-garment. Consequently, the hole between legislative intent and staff’ lived realities remained largely unaddressed. 

2022 Modification 

The 2022 Amendments to the Bangladesh 2015 Labour Guidelines launched a number of vital modifications. A few of the constructive measures included enhanced office safety for girls, the introduction of health-related depart, and stricter security necessities for factories.²²[22]Ahmed, supra observe 3. Then again, there have been some regarding implications for companies, particularly about wage increments, wage constructions, and the therapy of outsourced staff.²³[23]Accord Chambers, supra observe 20.

One notable change was the necessary yearly wage increment for staff, now set at a minimal of 5 p.c of fundamental wages below the 2022 modification.²⁴[24]Ahmed, supra observe 3. In contrast to earlier provisions, the modification didn’t listing any exceptions or circumstances, equivalent to assembly efficiency objectives or attaining a sure degree of revenue, to delay or keep away from these will increase.²⁵[25]Id. Consequently, this put monetary strain on companies by rising worker prices, particularly in the course of the present world financial slowdown.²⁶[26]Accord Chambers, supra observe 20.

Moreover, there was a vital change relating to the proportion of fundamental wages to complete wages, now mandated to be no less than fifty p.c.²⁷[27]Id. Beneath the brand new rule, an worker’s fundamental pay should make up no less than fifty p.c of their complete pay when no government-set minimal wage exists. This might disrupt how firms at the moment construction salaries, particularly if allowances and advantages (like bonuses or perks) make up a bigger portion than fundamental pay. Companies may have to regulate by rising fundamental wages, somewhat than simply reducing advantages or allowances, since doing so would possibly result in disputes with staff.²⁸[28]Human Rights Watch, supra observe 10.

Moreover, the modification addressed the therapy of outsourced staff and ensured their wages will not be lower than these of everlasting workers in related roles.²⁹[29]Ahmed, supra observe 3. This variation could disrupt the normal contracting company mannequin, resulting in elevated prices and logistical challenges in guaranteeing equality throughout totally different organizations.³⁰[30]Id.

The 2022 amendments to the Labour Guidelines launched measures equivalent to necessary wage increments and protections for outsourced staff, reflecting an effort to modernize labor laws. Nonetheless, these modifications imposed vital monetary and logistical challenges for employers, elevating issues about feasibility and long-term influence. Furthermore, staff have reported that many of those reforms haven’t translated into tangible enhancements on the bottom, with insufficient enforcement mechanisms persevering with to hinder progress.³¹[31]Bangladesh Labour Guidelines: Staff’ Pursuits Largely Ignored, Every day Star (Oct. 7, 2022), https://www.thedailystar.web/information/bangladesh/information/bangladesh-labour-rules-workers-interests-mostly-ignored-3135951. Worldwide Commerce Union Confederation, Bangladesh: New Proof of Violations of Staff’ Rights (Oct. 14, 2022), https://ituc-csi.org/Bangladesh-New-evidence-of-violations.

U.S. Worldwide Commerce Fee Listening to 

America Worldwide Commerce Fee (USITC) is an impartial, nonpartisan federal company that’s at the moment investigating the export competitiveness of attire industries in Bangladesh, Cambodia, India, Indonesia and Pakistan.³²[32]U.S. Worldwide Commerce Comm’n, USITC Examines Attire Export Competitiveness of 5 U.S. Import Sources (2024), https://www.usitc.gov/press_room/news_release/2024/er0116_64763.htm. A public listening to in reference to the investigation was held on March 11, 2024, with many leaders from the Bangladesh RMG {industry} in attendance.³³[33]Id. The main focus of this fee was to analyze whether or not any of the 5 international locations had been partaking in unhealthy competitors to dominate the market. 

In the course of the listening to, representatives from the Bangladesh Commerce Ministry and the Bangladesh Garment Producers and Exporters Affiliation (BGMEA) responded to varied questions. The commerce ministry reported that staff’ wages had elevated by no less than 316% within the final decade, and the manufacturing price per unit had additionally considerably risen. ³⁴[34]TBS Report, Bangladesh RMG grilled over labour rights at US listening to (Mar. 12, 2024), https://www.tbsnews.web/bangladesh/bangladesh-under-fire-us-hearing-apparel-import-5-countries-807890. A USIC commissioner inquired whether or not the typical work effectivity and productiveness of staff in Bangladesh had been decrease than in Cambodia. Farque Hassan, head of BGMEA, talked about that whereas it was troublesome to find out if Bangladeshi staff had been extra environment friendly than Cambodian staff, Bangladesh’s labor productiveness was decrease than that of China, Vietnam, and Indonesia. Hassan acknowledged the necessity for staff to enhance effectivity to extend manufacturing. Whereas Hassan acknowledged that the variety of commerce unions in Bangladesh was decrease than the quantity in Cambodia, in Bangladesh, each export-oriented manufacturing unit had a commerce union, which introduced the nationwide complete to over 1,400. ³⁵[35]TBS Report, supra observe 33.

A pointed query arose when a USITC commissioner requested why Bangladesh didn’t enable commerce unions within the Bangladesh Export Processing Zone (EPZ). Hassan responded that commerce unions did exist in each attire manufacturing unit within the EPZ, however staff might select their management by way of an election course of. He admitted that the variety of commerce unions in Bangladesh was decrease than in Cambodia however emphasised that each export-oriented manufacturing unit in Bangladesh had a commerce union, bringing the nationwide complete to over 1,400.³⁶[36]Id.

These discussions underscore the crucile position commerce unions play in advocating for garment staff’ rights by addressing the gaps highlighted in the course of the listening to, equivalent to low productiveness, restricted employee illustration, and protracted wage disparities. The point out of commerce unions in export-oriented factories and the election course of within the Export Processing Zone (EPZ) displays efforts to formalize employee illustration, even when union density stays decrease than in competing international locations like Cambodia. By organizing staff and guaranteeing their voices are heard, commerce unions function an important mechanism for pushing for honest wages, improved security circumstances, and higher labor requirements in an {industry} rife with challenges. 

Current Developments 

Regardless of reforms applied over the previous decade, latest developments in Bangladesh’s RMG {industry} have drawn consideration to ongoing issues relating to labor rights and enforcement. Amnesty Worldwide’s Could 2024 report criticized the shortage of correct compensation mechanisms for industrial accidents, whereas the Truthful Labor Affiliation (FLA) and the American Attire & Footwear Affiliation (AAFA) referred to as consideration to inadequate wages and weak union illustration.³⁷[37]Amnesty Int’l, Bangladesh: Garment Staff Should Obtain Rights-Primarily based Compensation and Justice Instantly, Amnesty Int’l (Could 2, 2024), https://www.amnesty.org/en/newest/information/2024/05/bangladesh-garment-workers-must-receive-rights-based-compensation-and-justice-immediately/. These issues spotlight the hole between the legislative framework and the lived actuality of staff, who proceed to face vital challenges in securing honest wages and protected working circumstances.  

Conclusion 

The latest USITC listening to additional emphasizes these ongoing challenges inside Bangladesh’s RMG {industry}. Whereas vital progress has been made in bettering security requirements and labor circumstances for the reason that Rana Plaza tragedy, crucial gaps stay. The disconnect between reforms on paper and their enforcement in apply continues to hinder significant change. To realize sustainable progress, shut collaboration among the many authorities, {industry} stakeholders, and worldwide organizations is important. Addressing the issues raised by Amnesty Worldwide, the FLA, and the AAFA, in addition to by employee representatives, will probably be essential to fostering an equitable and sustainable RMG {industry}. With out complete labor legislation reforms and sturdy enforcement mechanisms, the rights and welfare of hundreds of thousands of staff will stay inadequately protected, jeopardizing not solely their livelihoods but in addition Bangladesh’s world management in garment manufacturing. 

Written by: Jungsuh Kim

Brooklyn Legislation Class of 2025