Bangladesh: An Update

Size: px

Start display at page:

Download "Bangladesh: An Update"

Stephen Davis
5 years ago
Views:

1 Bangladesh: An Update Avedis H. Seferian, Esq. President & CEO Worldwide Responsible Accredited Production (WRAP) Ethical Sourcing Forum New York City March 27, 2014

2 Agenda Bangladesh Overview RMG Industry Background & Recent Events Political Update International Crimes Tribunal Latest Elections Updated Labor Law & New Minimum Wage Industry Update ILO Better Factories, Tripartite National Plan of Action, Accord & Alliance Accord & Alliance Activities Current Scenario & Forecast Conclusion

3 Bangladesh Overview 160 million people in 57,000 sq. miles Population density 2,500/sq. mile Major textiles/apparel sourcing destination (#2 exporter, after China) 5,000 factories employing 4 million workers (mostly women)

4 Background History of health and safety concerns Poorly educated work force Inadequate training, even at managerial/supervisory level Many factories housed in buildings not meant for industrial use Weak building codes General lack of enforcement

5 Tazreen Fashions-November 24, 2012 Retailers and suppliers hit by fallout from deadly Bangladesh factory fire -CNN Fatal Fire in Bangladesh Highlights the Dangers Facing Garment Workers -The New York Times Paying with Their Lives: The High Cost of Cheap Clothing -Solidarity Center

6 Smart Garments-January 26, 2013 Fire guts Bangladesh garment factory, six killed -Reuters Another factory fire kills more garment workers -ABC News Global retailers shamed after another garment fire in Bangladesh -The Christian Science Monitor

7 Rana Plaza-April 24, 2013 Building Collapse in Bangladesh Leaves Scores Dead -The New York Times Big Brands Face Scrutiny Over Factory Safety After Bangladesh Collapse -Associated Press Factory collapse A wake-up call for fashion industry -ABC Australia

8 Political Update - ICT International Criminal Tribunals Set up in late 2009 to investigate acts of genocide committed during Bangladesh Liberation War First indictments issued in 2010; first death sentence handed down in January 2013 Massive social upheaval, violent hartals Jamaat-e-Islami declared illegal in August 2013 Senior Jamaat leader, Abdul Quader Mollah, initially sentenced to life, executed in December 2013 More protests Meanwhile, the time for general elections arrived

9 Political Update General Elections Customary caretaker govt. approach abandoned Opposition party BNP threatened boycott Lots of violence and hartals in lead-up to elections Infamous phone call between PM Sheikh Hasina and Leader of Opposition Khaleda Zia Oct. 29, 2013 Polls held on January 5, 2014 Voter turnout very low (22%); 21 deaths reported on election day Ruling party Awami League wins in landslide More than 50% of seats uncontested Subsequent attempts to contest results; more hartals, but BNP struggling Khaleda Zia and other leaders facing April trial for corruption Currently, AL seems fairly stable in power

10 Political Update New Labor Law & Minimum Wage New Labor Law approved in July 2013 in part due to ILO pressures Union registration system streamlined Minimum Wage increased 77% in November from 3000 BDT (approx US$38) to 5300 BDT (approx US$68) per month Initial resistance on the part of the factory owners, but subsequent implementation seems to be proceeding well enough Some talk persists of factories still paying old rate

11 Industry Update Multiple initiatives formed in the wake of Rana Plaza May 2013 Accord on Fire & Building Safety in Bangladesh July 2013 Alliance for Bangladesh Worker Safety July 2013 National Tripartite Plan of Action Also, ILO announced: Launch of Better Work Bangladesh Still in set up stage; looking for Program Manager February Rana Plaza Donor Trust Fund estd.

12 Industry Update Accord 150 apparel companies + unions + NGO witnesses Largely European Alliance 26 member companies + supporting associations Largely North American Both published updated lists of factories, as of March 2014 Accord: 1639 factories (with 2 million workers) Alliance: 770 factories (with 1.4 million workers) 378 units in common

13 Accord & Alliance Activities Inspections: Agreed on common set of technical standards for building fire, safety and electrical safety in November 2013 Accord begun inspections in February 2014 Ten facilities already covered; reports on website Alliance inspections have begun; first reports expected in April Training: Alliance has begun training program Accord still looking for a Chief Trainer Jointly held first ever International Trade Expo for Building and Fire Safety in Dhaka, February 23 & 24, 2014 Both will have Advisory Board meetings in April

14 Current Scenario & Forecast Political situation improving; now largely stable But most predict current government will not last full term Initial fears about buyers leaving not borne out Jan 2014 year-on-year garment exports grew at 6.36% Still, this is a slower growth rate than usual for Bangladesh Inspections and trainings will soon be in full swing Questions remain concerning harmonizing efforts and whether the July 2014 deadlines can be met Real test will be around repairs/upgrades Who will pay? What happens to facilities that cannot be fixed?

15 Conclusion 2014 will be a pivotal year for Bangladesh Upcoming anniversary of Rana Plaza - April 24 Will likely remain #2 apparel exporter in the world But facing increasing pressure from SE Asia, esp. Vietnam Should see the beginnings of a shrinking in the number of factories Expect facilities to shift out of Dhaka city and into industrial zones Increase in cost of sourcing from Bangladesh

16 Thank you! Avedis H. Seferian, Esq. President & CEO Worldwide Responsible Accredited Production Arlington, VA

17 BANGLADESH AN UPDATE Intertek Softlines, Bangladesh Business Assurance Presented by: Mamun Zaman Senior Manager, Operations 17

18 Common Violation - WCA Workplace Conditions Assessment: - Global Participating Facilities : Bangladesh Participating Facilities : Bangladesh Total Assessment: Health & Safety Score: Bangladesh 73 & Global 84 Medium Performance Further Improvement Needed Score Global 77 Bangladesh 71 Top 5 most frequent Non-Compliances in Health & Safety Bangladesh Non Compliance Frequency Rate % Fire sprinkler is not properly installed throughout the facility and/ or not regularly maintained. 94% The facility does not have a documented emergency plan in place and conduct regular emergency drills for all employees who work with chemicals or hazardous materials OR The facility does not conduct regular emergency drills (e.g. chemical leakage, accident drill) for all employees who work with chemicals or hazardous materials. 48% Access to aisles, stairs and passageways are not kept clear at all times. 46% Electrical cords and outlets are not in good condition OR Electrical cords and outlets are not in safe condition. There are no special programs/ measures for pregnant women. 41% 44% 18

19 Common Violation Health & Safety Bangladesh Avg vs Global Avg 19

20 Common Violation Fire Safety Audit Fire Safety Audit Pictorial Presentation Wooden Electric Switch Box Emergency Exit Locked Uncovered and Loose Electric Wires Flammable Materials Kept in Production Floor 20

21 Common Violation Fire Safety Audit Fire Safety Audit Pictorial Presentation Shared Building Roof Top Not Vacant Aisles Partially Blocked by Unfinished Goods and Yarn Flammable Materials Kept in Production Floor 21

22 Common Violations ESA Audit Pictorial Presentation Burnt cable is used Cables are not organized in definite sequence inside distribution board Combustive materials are kept in front of Distribution board 22 Cable gland is not installed

23 23

TEXTS ADOPTED Provisional edition. European Parliament resolution of 18 September 2014 on human rights violations in Bangladesh (2014/2834(RSP))

EUROPEAN PARLIAMENT 2014-2019 TEXTS ADOPTED Provisional edition P8_TA-PROV(2014)0024 Human rights violations in Bangladesh European Parliament resolution of 18 September 2014 on human rights violations