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November 18th Online Conference Summary & Notes

In order to push forward with our discussion on Improving Minimal Global Standards for Worker Safety, Philip Hamilton, a BGF correspondent, summarized the major points on Nov 18th.

Full transcript can be found Here.

Jeffrey KrillaJeff Krilla, Alliance for Bangladesh Worker Safety

  • “Shared suppliers make up approximately 50% of the Alliance factory list, underscoring the need for combined efforts on the behalf of factory workers.”
  • Alliance’s goal is to advance a set of common/shared standards that will result in making all Bangladeshi factories safer.
  • Alliance is aiming to create an anonymous worker hotline in order to facilitate worker empowerment so workers can raise safety concerns confidentially and anonymously.
  • Safety committees, worker participation committees, and unions will give workers a sufficient voice to communicate effectively with management. The Alliance will also encourage management to engage with workers and to allow the right to organize so there can be open and regular dialogues on safety.
  • Emphasis on worker empowerment.
  • Emphasis on collaboration amongst all stakeholders. Government and civil society partnerships with the Alliance will be especially important to the success in improving safety standards.
  • Prof. Quelch Question: Would coordination between the Accord and Alliance be beneficial? What, if anything, can the Alliance do at subcontractor plants to improve safety?
  • Krilla hopes that the Alliance and Accord will harmonize their efforts as much as possible. Recent events have shown that they can align their two standards, which is critical. Cooperation between the two on the ground in Bangladesh has been significant.
  • Alliance members are committed to ensuring that illegal subcontracting doesn’t occur.
  • Enforcing company rules and regulations, and efforts to amplify the Alliance’s efforts will help to stamp out illegal subcontracting.
  • Question: Where does the spark come from in factory fires? Is it electrical outputs that produce the spark or something else? Do safety strategies exist for workers in garment factories?
  • Fire safety, electrical safety, and structural safety are integral to worker safety.
  • Electrical safety is a major issues causing fires in garment factories. Many electrical systems are antiquated and garments easily catch fire. Thus worker training on safety issues is crucial so that fire hazards can be minimized.
  • The Alliance, like the Accord, does not address reparations. The Alliance aims to prevent future Rana Plaza disasters and hopes that by taking aggressive preventative action there will be no need for reparations.
  • The Alliance is committed to using low-interest loans

srinivisSrinivasa Reddy, ILO

  • Following the Rana collapse the ILO has really taken on the issue of structural change in worker safety.
  • The giant statement issued on May 4th, the National Tripartite Agreement, and the Sustainability Compact are the three main framework agreements that seek to improve fire safety, electrical safety, and labor rights in the garment structure. These are supplemented by the Alliance and Accord.
  • From the ILO’s point of view, weak labor enforcement capacity, irregularities in safety and building licensing, absence of workers organizations, are crucial gaps that must be addressed.
  • ILO launched a program with 5 priorities focusing improving building inspections, fire and electrical safety of all the factories not covered by the Alliance or Accord.
  • 3,500 factories are active in Bangladesh, 2,000 are covered by the Alliance and Accord, 1,500 remaining factories are covered by the ILO program.
  • ILO is focusing on strengthening the labor inspection system and enforcing labor legislation.
  • There is a lack of adequate priority for creating an occupational safety and health culture.
  • Coordination is a major challenge and harmonization is a major issue that must be addressed.
  • Prof. Quelch Question: What is the mood among factory owners regarding their willingness to cooperate with these various efforts by the Accord and Alliance?
  • Factory owners has realized that unless these issues are addressed in terms of improving safety and promoting labor rights in Bangladesh then the industry may land in crisis.
  • We see a shift in the attitudes of employers in Bangladeshi factories.
  • Prof. Quelch Question: You don’t think they’re just biding their time and hoping this is going to go away? The ones you have talked to are committed to making a change?
  • There are a lot of apprehensions regarding these inspections. What will happen regarding factories that must be closed?
  • The Rana Plaza disaster has created unprecedented commitments from the international community. Also a lot of people are watching so there are not a lot of options in terms of whether or not to improve worker safety and labor rights in the garment industry

Scott NovaScott Nova, Worker Rights Consortium

  • In order to avoid repeating the mistakes of the past we need to better understand the nature of those mistakes.
  • It’s vital to bear in mind that brands and retailers have been carrying out inspections regarding worker safety in Bangladesh for more than a decade, yet these inspections have failed to protect worker safety.
  • It’s important to bear in mind that in virtually every factory where workers have died in mass in fires and building collapses, those factories have been inspected under industry and factory inspection programs, so we need to understand why those past programs have not worked.
  • Reasons past programs have not worked: they were not independent (they were run by the brands themselves), the results were not publicly available, also brands were not obligated to provide the necessary financial support to provide safe operations, a lack of worker of involvement/the inability of workers to act collectively to protect their own safety, and commitments made by brands regarding worker safety were purely voluntary.
  • To protect worker safety going forward, we need programs that address the aforementioned gaps, which is what the Accord is designed to do.
  • There will be fully transparent inspections and results, brands will provide substantial support to factories for renovations and safety improvements, there will be a central role for workers including a right of workers to refuse to enter or stay in a building they have a reason to believe is unsafe, and all these commitments by brands are binding/no longer voluntary.
  • There are 1,600 factories covered by the Accord; 110 companies are members.
  • Prof. Quelch Questions: Can you comment on the implementation challenges and how you are dealing with those? Is coordination and collaboration between the Alliance, Accord, and the ILO something that will prove beneficial? When the Alliance or Accord approach a factory owner with findings that are critical of the workplace, what leverage will the Alliance or the Accord be able to use to enable compliance to occur as opposed to the factory owner dismissing inspection results?
  • Financial leverage will be used by the Accord and Alliance in order to ensure compliance by factor owners. If factory owners refuse to make safety improvements then brands and retailers will leave that factory.
  • The problem in Bangladeshi garment factories took 20 years to create so it will not be solved in 20 weeks.
  • The Accord is open to collaboration and cooperation on a the development of a common inspection standard. However, there are different levels of commitment between the Alliance and Accord signatories which limit the ability of Accord signatories to cooperate with the Alliance.
  • The Alliance signatories have not made binding commitments whereas the Accord signatories have. Thus, there is a potential free-rider problem since Accord signatories have made binding financial commitments while Alliance signatories have not. Thus, the Accord signatories could end up footing the entire bill for safety improvements while the Alliance signatories “piggy-back on financial commitments made by the Accord.
  • Prof. Quelch Question: What about victim compensation when there are tragedies? We are not sure if the Alliance or Accord agreements actually provide for that.
  • The Accord does not contain obligations specific to families or injured workers, not because the Accord does not think that such compensation is not appropriate or necessary, but it’s not within the scope of the Accord. The goal of the Accord is to avoid tragedies that would then give rise to a need for compensation. However, if workers are injured in the future the members of the Accord would certainly urge brand or retailers to pay appropriate and generous compensation to families and injured workers.

Rick DarlingRick Darling, Li & Fung

  • Focused on the common ground, rather than the differences, between the Alliance and Accord.
  • Many members of the Accord and Alliance have begun inspections for fire safety and structural safety already using outside engineering firms and fire experts.
  • 500+ factories have been inspected by the Accord using outside firms so far and a large number of factories have been inspected by the Alliance.
  • The first few months of the Alliance and Accord have created confusion amongst factory owners regarding what the standards would look like, whether there would be multiple sets of standards.
  • What we are seeing is that factory ownership in general is really beginning to understand that the members of the Alliance and Accord are extremely dedicated to safety improvements in factories. As such, owners have become relatively cooperative (generally speaking).
  • Subcontracting in itself is not necessarily something that can’t be done with transparency. The issue that retailers and brands are getting involved in is unauthorized subcontracting without the knowledge of the buyer or the participants in the supply-chain.
  • Export licensing will be suspended if it is discovered that unauthorized subcontracting is occurring.
  • Solving the problem of unauthorized subcontracting is a long-term process.
  • Prof. Quelch Question: Do you think three years from now worker safety standards will have improved to a new baseline in Bangladesh?
  • There is no doubt that three years from now the baseline will have been raised in Bangladesh. Maybe a new industry standard will be set.
  • The country has to remain commercially viable. The industry needs to remain competitive. While there is a financial impact of the improvements being made, these changes are just good business and that Bangladesh will remain viable and competitive.
  • The numbers indicated going into 2014 that total Bangladeshi exports are improving partly due to a firm commitment by the members of the Accord and Alliance to stay in Bangladesh and to make improvements in worker safety/to resolve these issues.

ambassador-de-jongGerben De Jong, Ambassador of the Kingdom of the Netherlands in Dhaka

  • Two crucial issues to be addressed: 1) a common standard in fire and building safety and inspection; 2) minimum wage.
  • I think it will be impossible to explain to factory owners and consumers in Europe and US and rest of world if there was not one common standard for worker safety in Bangladesh.
  • Increasing the minimum wage is necessary.
  • De Jong believes that the minimum wages will be increased.
  • Everything is in place to go onto the next stage, which is carrying out the inspections.

nancyNancy Donaldson, ILO

  • There is a group working on reparations, and the ILO is facilitating this. A draft document will be signed soon, if all goes according to plan.
  • Aiming to build an international fund for reparations.
  • There is an opportunity for collaboration.
  • The role of the worker and the role of the government have not truly been addressed yet in this discussion.
  • Sustainable, long-term improvement cannot rely solely on the good leadership of corporate partners; it needs to be a true partnership to change the way business is done in the sense that it endangers the workers and the workers can’t make a living.

Sander LevinSander Levin, Michigan Congressman

  • There is a historic opportunity for all parties to join together and collaborate.
  • It’s uncertain if workers will get a living wage.
  • Workers need representation; they did not want to go into the Rana Plaza complex. They were told to go in or they’d lose their wages.
  • If workers are not represented, will there be adequate attention to safety in the 6,500 factories in Bangladesh and whether they’ll be able to make a living wage.
  • Until workers had unions and voice in the workplace in the US, workers had to suffer in unsafe work places/conditions and didn’t make a living wage.
  • Some have been working to build labor standards into trade agreements made by the United States.
  • Worker participation committees may give workers more voice in the workplace but will likely stand in the way of efforts to develop unions.
  • Conditions will improve a bit, but wages will not increase, until workers are giving a voice in the workplace. More attention needs to be paid to giving workers a voice in the workplace.
  • Bangladesh can compete while paying a living wage.
  • Workers need to participate in these discussions.

richard MillerRichard Miller, Committee on Education & the Workforce

  • Using government procurement policy to raise standards is a worthwhile endeavor.
  • The distinction between the Accord and Alliance should not be blurred because the Accord will establish a different model of responsibility going forward since it is equally governed by unions and by brands and retailers.
  • The Generalized System of Preferences is a limited tool we can use to send a clear signal to the Bangladeshi government that their labor law reforms have further to go. The reforms undertaken this summer were very limited.

Bruce LevineBruce Levine, Office of International Labor Affairs, U.S Department of State

  • The State Department is providing financial and technical assistance, and give a push to these efforts to improve worker safety.
  • Financial assistance has come through programs that support organization training and technical advice to independent labor unions.
  • The State Department supports, through the ILO, efforts for the government to increase their capacity to enforce their labor laws.
  • The State Department is coordinating with the Labor Department.
  • The future of the industry is at stake.
  • It is the fundamental responsibility of the Bangladeshi Government to ensure that the industry is adequately governed so that it does not become the bottom of the race to the bottom.
  • We only have relatively limited tools at our disposal. It was only after the recent tragedy that there has been traction on worker safety issues even though the State Department had been pushing the Bangladeshi Government for years.
  • There is reason to be optimist that we will make progress.

SaraSara Hossain, Bangladesh Legal Aid and Services Trust

  • There is a gap between what is happening on the international level and how that is being communicated to workers on the ground.
  • There are women workers who have been injured that have been thrown out of their homes because they are no longer able to learn a livelihood and are thus facing destitution. Aside from some small payments they have not been given any reparations.
  • What about the brave rescuers who are suffering from PTSD yet are receiving no attention or assistance?
  • Any responses that come with simply wielding a stick without considering the conditions on the ground will not be helpful.
  • We need to put Bangladeshi workers front and center.

Liana Foxvog, International Labor Rights Forum

  • Are Alliance members providing direct financial assistance to factories for safety improvements?

Joanne GoldsteinJoanne Goldstein, Executive Office of Labor and Workforce Development

  • One thing that has not been mentioned is the use of states to address how garments and other materials are made in state procurement contracts.
  • In Massachusetts we expect their supply-chains to be in compliance if a company wants to do business here.
  • States may have less leverage than the federal government but can have an impact.

kuttnerBob Kuttner, American Prospect

  • Worker safety and health concerns have to lead to greater worker rights.
  • The obstacles to success are small margins, pressures on intermediaries to keep prices lows, competitive pressures between developing countries for market share.
  • We want better safety while maintain low prices.
  • We are hoping to move beyond the mere public relations and damage control measures.
  • Consumer pressure by itself is not the be-all-end-all because most consumers do not take factory safety/conditions into account; concerns for reputational damage created real leverage.
  • Enforceable funding commitments, brands having binding commitments, and worker rights will be absolutely critical.

CarolPierCarol Pier, U.S. Department of Labor

  • Workers ability to organize and act collectively are key.
  • The Department of Labor has just awarded a 2.5 million dollar grant for capacity building, part to the ILO and part to the Solidarity Center.

Europeans Fault American Safety Effort in Bangladesh

Steven Greenhouse, the labor and workplace reporter for The New York Times, published an article yesterday portraying the rising tension between the European- and American-led garment multinationals in resolving workers’ issues. Boston Global Forum is honored to support Steve’s research when inviting him to join our Online Conference on November 18th, 2013.

For the original version of Steve’s article, please visit: http://www.nytimes.com/2013/11/19/business/international/europeans-fault-american-safety-effort-in-bangladesh.html?ref=stevengreenhouse&_r=1&

Europeans Fault American Safety Effort in Bangladesh

By 
Published: November 18, 2013

Tensions broke into the open on Monday involving two large groups of retailers — one overwhelmingly American, the other dominated by Europeans — that have formed to improve factory safety in Bangladesh.

Garment-articleLarge

An official from the European group voiced concern that the American retailers would piggyback at no cost on the efforts of the Europeans — which includes H&M, Carrefour and more than 100 other retailers — in financing safety upgrades at hundreds of factories.

The members of the European-led group, the Accord on Fire and Building Safety in Bangladesh, have made binding commitments to help pay for fire safety measures and building upgrades when shortcomings in safety are found in the more than 1,600 garment factories its members use in Bangladesh. While the American-dominated group, which has 26 members, including Walmart Stores, Target and Gap, has stopped short of making such a binding commitment, it has pledged to provide loans for the improvements.

Scott Nova, executive director of the Worker Rights Consortium, a labor rights group based in Washington that is a member of the Europe-led accord, said members had a “significant concern about a free-rider situation.”

Jeff R. Krilla, the president of the American-dominated group, the Alliance for Bangladesh Worker Safety, said he was surprised by the criticism, noting that his alliance had agreed to make $100 million in low-cost loans available to Bangladesh factory owners to finance safety improvements.

In a sharp exchange in a telephone conference call on worker safety in Bangladesh that was organized by the Boston Global Forum, a nonprofit research organization, Mr. Krilla said his group’s members were making a significant financial commitment to improving safety, including a total of $50 million over five years in contributions by retailers in the alliance. The two groups, founded after the Rana Plaza factory building collapsed last April, killing more than 1,100 workers, are just beginning factory inspections. Despite the friction, they have been working closely together to develop joint inspection standards on fire and building safety.

Srinivas B. Reddy, director of the International Labor Organization’s office in Bangladesh, described a change in attitude among Bangladesh factory owners who have frequently been criticized by the United States and other countries for shunning safety concerns and suppressing labor unions.

“The factory owners in Bangladesh have clearly realized that unless these issues are addressed in terms of improving safety and labor rights, the industry may land in crisis,” Mr. Reddy said.

That could lead to the loss of orders from Western companies. Bangladesh is the world’s second-largest garment exporting nation after China, exporting nearly $20 billion in apparel each year.

In the conference call, Mr. Nova, in a clear reference to the American-led alliance, said that members were concerned about “the tremendous lack of worker involvement” in some factory safety efforts.

The European-led accord has two giant union federations as members with tens of millions of members, IndustriALL and Uni Global. The American alliance does not have any formal union participation, but Mr. Krilla said his alliance expected to work closely with Bangladeshi unions.

In recent months, Walmart, H&M and other retailers have sponsored their own emergency safety inspections of factories, in part to prevent any new disasters before inspections called for in the groups’ accord begin at hundreds of factories.

Late Sunday, Walmart posted on its website the results of 75 inspections that it commissioned for factories it uses in Bangladesh.

Kevin Gardner, a Walmart spokesman, said the reports showed that many factories had “made real improvements that are making the supply chain safer for thousands of workers in Bangladesh.”

Mr. Gardner said that 34 of the 75 factories had moved from having a D or C rating to having an A or B rating.

“This is the first time a retailer has published results of factory audits on this scale,” Mr. Gardner said. “We believe transparency is vital to improve worker safety in Bangladesh.”

In a separate interview, Mr. Nova criticized Walmart’s inspection reports as inadequate.

“I expected to see much more substantive detail,” he said. “They really don’t point out specific or actual hazards.”

He praised Walmart for disclosing the names of its factories, which many retailers refuse to do. “But in terms of public disclosure, it’s pretty useless,” he added. “There’s no way for workers at a factory to tell what specific hazards they face, whether it’s a lack of smokeproof enclosed staircases or something else.”

Boston Global Forum November 18th Online Conference Audio Recording

Slide1

In order to serve your needs in time, we have uploaded the audio file first. Please visit our website regularly for additional updates.

Click below to access our recording for the November 18th Online Conference.

Also, here are some major points of the discussion summarized by our correspondent.

I.      Jeff Krilla, Alliance for Bangladesh Worker Safety

  • “Shared suppliers make up approximately 50% of the Alliance factory list, underscoring the need for combined efforts on the behalf of factory workers.”
  • Alliance’s goal is to advance a set of common/shared standards that will result in making all Bangladeshi factories safer.
  • Alliance is aiming to create an anonymous worker hotline in order to facilitate worker empowerment so workers can raise safety concerns confidentially and anonymously.
  • Safety committees, worker participation committees, and unions will give workers a sufficient voice to communicate effectively with management. The Alliance will also encourage management to engage with workers and to allow the right to organize so there can be open and regular dialogues on safety.
  • Emphasis on worker empowerment.
  • Emphasis on collaboration amongst all stakeholders. Government and civil society partnerships with the Alliance will be especially important to the success in improving safety standards.
  • Prof. Quelch Question: Would coordination between the Accord and Alliance be beneficial? What, if anything, can the Alliance do at subcontractor plants to improve safety?
  • Krilla hopes that the Alliance and Accord will harmonize their efforts as much as possible. Recent events have shown that they can align their two standards, which is critical. Cooperation between the two on the ground in Bangladesh has been significant.
  • Alliance members are committed to ensuring that illegal subcontracting doesn’t occur.
  • Enforcing company rules and regulations, and efforts to amplify the Alliance’s efforts will help to stamp out illegal subcontracting.
  • Question: Where does the spark come from in factory fires? Is it electrical outputs that produce the spark or something else? Do safety strategies exist for workers in garment factories?
  • Fire safety, electrical safety, and structural safety are integral to worker safety.
  • Electrical safety is a major issues causing fires in garment factories. Many electrical systems are antiquated and garments easily catch fire. Thus worker training on safety issues is crucial so that fire hazards can be minimized.
  • The Alliance, like the Accord, does not address reparations. The Alliance aims to prevent future Rana Plaza disasters and hopes that by taking aggressive preventative action there will be no need for reparations.
  • The Alliance is committed to using low-interest loans

         II.      Srinivasa Reddy, ILO

  • Following the Rana collapse the ILO has really taken on the issue of structural change in worker safety.
  • The giant statement issued on May 4th, the National Tripartite Agreement, and the Sustainability Compact are the three main framework agreements that seek to improve fire safety, electrical safety, and labor rights in the garment structure. These are supplemented by the Alliance and Accord.
  • From the ILO’s point of view, weak labor enforcement capacity, irregularities in safety and building licensing, absence of workers organizations, are crucial gaps that must be addressed.
  • ILO launched a program with 5 priorities focusing improving building inspections, fire and electrical safety of all the factories not covered by the Alliance or Accord.
  • 3,500 factories are active in Bangladesh, 2,000 are covered by the Alliance and Accord, 1,500 remaining factories are covered by the ILO program.
  • ILO is focusing on strengthening the labor inspection system and enforcing labor legislation.
  • There is a lack of adequate priority for creating an occupational safety and health culture.
  • Coordination is a major challenge and harmonization is a major issue that must be addressed.
  • Prof. Quelch Question: What is the mood among factory owners regarding their willingness to cooperate with these various efforts by the Accord and Alliance?
  • Factory owners has realized that unless these issues are addressed in terms of improving safety and promoting labor rights in Bangladesh then the industry may land in crisis.
  • We see a shift in the attitudes of employers in Bangladeshi factories.
  • Prof. Quelch Question: You don’t think they’re just biding their time and hoping this is going to go away? The ones you have talked to are committed to making a change?
  • There are a lot of apprehensions regarding these inspections. What will happen regarding factories that must be closed?
  • The Rana Plaza disaster has created unprecedented commitments from the international community. Also a lot of people are watching so there are not a lot of options in terms of whether or not to improve worker safety and labor rights in the garment industry.

     III.      Scott Nova, Worker Rights Consortium

  • In order to avoid repeating the mistakes of the past we need to better understand the nature of those mistakes.
  • It’s vital to bear in mind that brands and retailers have been carrying out inspections regarding worker safety in Bangladesh for more than a decade, yet these inspections have failed to protect worker safety.
  • It’s important to bear in mind that in virtually every factory where workers have died in mass in fires and building collapses, those factories have been inspected under industry and factory inspection programs, so we need to understand why those past programs have not worked.
  • Reasons past programs have not worked: they were not independent (they were run by the brands themselves), the results were not publicly available, also brands were not obligated to provide the necessary financial support to provide safe operations, a lack of worker of involvement/the inability of workers to act collectively to protect their own safety, and commitments made by brands regarding worker safety were purely voluntary.
  • To protect worker safety going forward, we need programs that address the aforementioned gaps, which is what the Accord is designed to do.
  • There will be fully transparent inspections and results, brands will provide substantial support to factories for renovations and safety improvements, there will be a central role for workers including a right of workers to refuse to enter or stay in a building they have a reason to believe is unsafe, and all these commitments by brands are binding/no longer voluntary.
  • There are 1,600 factories covered by the Accord; 110 companies are members.
  • Prof. Quelch Questions: Can you comment on the implementation challenges and how you are dealing with those? Is coordination and collaboration between the Alliance, Accord, and the ILO something that will prove beneficial? When the Alliance or Accord approach a factory owner with findings that are critical of the workplace, what leverage will the Alliance or the Accord be able to use to enable compliance to occur as opposed to the factory owner dismissing inspection results?
  • Financial leverage will be used by the Accord and Alliance in order to ensure compliance by factor owners. If factory owners refuse to make safety improvements then brands and retailers will leave that factory.
  • The problem in Bangladeshi garment factories took 20 years to create so it will not be solved in 20 weeks.
  • The Accord is open to collaboration and cooperation on a the development of a common inspection standard. However, there are different levels of commitment between the Alliance and Accord signatories which limit the ability of Accord signatories to cooperate with the Alliance.
  • The Alliance signatories have not made binding commitments whereas the Accord signatories have. Thus, there is a potential free-rider problem since Accord signatories have made binding financial commitments while Alliance signatories have not. Thus, the Accord signatories could end up footing the entire bill for safety improvements while the Alliance signatories “piggy-back on financial commitments made by the Accord.
  • Prof. Quelch Question: What about victim compensation when there are tragedies? We are not sure if the Alliance or Accord agreements actually provide for that.
  • The Accord does not contain obligations specific to families or injured workers, not because the Accord does not think that such compensation is not appropriate or necessary, but it’s not within the scope of the Accord. The goal of the Accord is to avoid tragedies that would then give rise to a need for compensation. However, if workers are injured in the future the members of the Accord would certainly urge brand or retailers to pay appropriate and generous compensation to families and injured workers.

     IV.      Rick Darling, Li & Fung

  • Focused on the common ground, rather than the differences, between the Alliance and Accord.
  • Many members of the Accord and Alliance have begun inspections for fire safety and structural safety already using outside engineering firms and fire experts.
  • 500+ factories have been inspected by the Accord using outside firms so far and a large number of factories have been inspected by the Alliance.
  • The first few months of the Alliance and Accord have created confusion amongst factory owners regarding what the standards would look like, whether there would be multiple sets of standards.
  • What we are seeing is that factory ownership in general is really beginning to understand that the members of the Alliance and Accord are extremely dedicated to safety improvements in factories. As such, owners have become relatively cooperative (generally speaking).
  • Subcontracting in itself is not necessarily something that can’t be done with transparency. The issue that retailers and brands are getting involved in is unauthorized subcontracting without the knowledge of the buyer or the participants in the supply-chain.
  • Export licensing will be suspended if it is discovered that unauthorized subcontracting is occurring.
  • Solving the problem of unauthorized subcontracting is a long-term process.
  • Prof. Quelch Question: Do you think three years from now worker safety standards will have improved to a new baseline in Bangladesh?
  • There is no doubt that three years from now the baseline will have been raised in Bangladesh. Maybe a new industry standard will be set.
  • The country has to remain commercially viable. The industry needs to remain competitive. While there is a financial impact of the improvements being made, these changes are just good business and that Bangladesh will remain viable and competitive.
  • The numbers indicated going into 2014 that total Bangladeshi exports are improving partly due to a firm commitment by the members of the Accord and Alliance to stay in Bangladesh and to make improvements in worker safety/to resolve these issues.

        V.      Gerben De Jong, Ambassador of the Kingdom of the Netherlands in Dhaka

  • Two crucial issues to be addressed: 1) a common standard in fire and building safety and inspection; 2) minimum wage.
  • I think it will be impossible to explain to factory owners and consumers in Europe and US and rest of world if there was not one common standard for worker safety in Bangladesh.
  • Increasing the minimum wage is necessary.
  • De Jong believes that the minimum wages will be increased.
  • Everything is in place to go onto the next stage, which is carrying out the inspections.

     VI.      Nancy Donaldson, ILO

  • There is a group working on reparations, and the ILO is facilitating this. A draft document will be signed soon, if all goes according to plan.
  • Aiming to build an international fund for reparations.
  • There is an opportunity for collaboration.
  • The role of the worker and the role of the government have not truly been addressed yet in this discussion.
  • Sustainable, long-term improvement cannot rely solely on the good leadership of corporate partners; it needs to be a true partnership to change the way business is done in the sense that it endangers the workers and the workers can’t make a living.

 VII.      Sander Levin, Michigan Congressman

  • There is a historic opportunity for all parties to join together and collaborate.
  • It’s uncertain if workers will get a living wage.
  • Workers need representation; they did not want to go into the Rana Plaza complex. They were told to go in or they’d lose their wages.
  • If workers are not represented, will there be adequate attention to safety in the 6,500 factories in Bangladesh and whether they’ll be able to make a living wage.
  • Until workers had unions and voice in the workplace in the US, workers had to suffer in unsafe work places/conditions and didn’t make a living wage.
  • Some have been working to build labor standards into trade agreements made by the United States.
  • Worker participation committees may give workers more voice in the workplace but will likely stand in the way of efforts to develop unions.
  • Conditions will improve a bit, but wages will not increase, until workers are giving a voice in the workplace. More attention needs to be paid to giving workers a voice in the workplace.
  • Bangladesh can compete while paying a living wage.
  • Workers need to participate in these discussions.

VIII.      Richard Miller, Committee on Education & the Workforce

  • Using government procurement policy to raise standards is a worthwhile endeavor.
  • The distinction between the Accord and Alliance should not be blurred because the Accord will establish a different model of responsibility going forward since it is equally governed by unions and by brands and retailers.
  • The Generalized System of Preferences is a limited tool we can use to send a clear signal to the Bangladeshi government that their labor law reforms have further to go. The reforms undertaken this summer were very limited.

     IX.      Bruce Levine, Office of International Labor Affairs, U.S Department of State

  • The State Department is providing financial and technical assistance, and give a push to these efforts to improve worker safety.
  • Financial assistance has come through programs that support organization training and technical advice to independent labor unions.
  • The State Department supports, through the ILO, efforts for the government to increase their capacity to enforce their labor laws.
  • The State Department is coordinating with the Labor Department.
  • The future of the industry is at stake.
  • It is the fundamental responsibility of the Bangladeshi Government to ensure that the industry is adequately governed so that it does not become the bottom of the race to the bottom.
  • We only have relatively limited tools at our disposal. It was only after the recent tragedy that there has been traction on worker safety issues even though the State Department had been pushing the Bangladeshi Government for years.
  • There is reason to be optimist that we will make progress.

        X.      Sara Hossain, Bangladesh Legal Aid and Services Trust

  • There is a gap between what is happening on the international level and how that is being communicated to workers on the ground.
  • There are women workers who have been injured that have been thrown out of their homes because they are no longer able to learn a livelihood and are thus facing destitution. Aside from some small payments they have not been given any reparations.
  • What about the brave rescuers who are suffering from PTSD yet are receiving no attention or assistance?
  • Any responses that come with simply wielding a stick without considering the conditions on the ground will not be helpful.
  • We need to put Bangladeshi workers front and center.

     XI.      Liana Foxvog, International Labor Rights Forum

  • Are Alliance members providing direct financial assistance to factories for safety improvements?

 XII.      Joanne Goldstein, Executive Office of Labor and Workforce Development

  • One thing that has not been mentioned is the use of states to address how garments and other materials are made in state procurement contracts.
  • In Massachusetts we expect their supply-chains to be in compliance if a company wants to do business here.
  • States may have less leverage than the federal government but can have an impact.

XIII.      Bob Kuttner, American Prospect

  • Worker safety and health concerns have to lead to greater worker rights.
  • The obstacles to success are small margins, pressures on intermediaries to keep prices lows, competitive pressures between developing countries for market share.
  • We want better safety while maintain low prices.
  • We are hoping to move beyond the mere public relations and damage control measures.
  • Consumer pressure by itself is not the be-all-end-all because most consumers do not take factory safety/conditions into account; concerns for reputational damage created real leverage.
  • Enforceable funding commitments, brands having binding commitments, and worker rights will be absolutely critical..      Carol Pier, U.S. Department of Labor
  • Workers ability to organize and act collectively are key.
  • The Department of Labor has just awarded a 2.5 million dollar grant for capacity building, part to the ILO and part to the Solidarity Center.

XIV.      Carol Pier, U.S. Department of Labor

  • Workers ability to organize and act collectively are key.
  • The Department of Labor has just awarded a 2.5 million dollar grant for capacity building, part to the ILO and part to the Solidarity Center.

Question and comment from Professor Kent Jones, Babson College

jones

Professor Kent Jones of the Economics Department, Babson College.

Question: Instead of “naming and shaming” only corporations that sell sweatshop products, how about doing the same for countries, like the US and members of the EU, that reserve their highest tariff rates for clothing made in the poorest countries?  According to www.progressive-economy.org, the average US tariff collected on imports from Bangladesh in 2013 was 15%, second only to Cambodia in its severity.  Based on some $4billion annually in clothing imports from Bangladesh, the US collected more than $600 million in tariff revenue on those items in 2012; the EU, with similar tariffs, collects a comparable amount.  Why not persuade the importing countries to contribute these tariff revenues to a fund in support of the Bangladesh Fire and Safety Accord? Such a fund, accumulating tariff revenues on Bangladeshi trade alone of $2 billion or more annually, could be turned over to a competent international authority, perhaps the ILO, to fund structural improvements and to link compliance with safety standards to a certification process, with independent inspection and monitoring.  In fact, this sort of tariff-based funding could be used to support similar programs in other countries as well, and even in other industries.  These tariffs, by the way, are the product of domestic protectionist politics, are a drag on development, and should be reduced and eventually eliminated.  In the meantime, the tariff revenues could at least be devoted to such a worker safety initiative that actually helps development.

Comment:The good thing about the response to the Rana Plaza tragedy is that it has focused on improving worker conditions through voluntary actions, public awareness, and international cooperation.  While these measures alone may not solve the problem, they at least provide a cooperative framework to build upon.  Financial resources to implement needed infrastructure and building safety measures must also be a part of the solution, and this element can provide incentives for compliance (see my proposal above).  What is unlikely to succeed are unilateral trade sanctions to enforce labor standards, which would end up punishing Bangladeshi and other foreign workers.

Professor John Quelch of the Harvard Business School addresses the meeting.

BOSTON GLOBAL FORUM ANNOUNCES NOV. 18 CONFERENCE ON MINIMAL GLOBAL STANDARDS FOR WORKER SAFETY AND RIGHTS

Which is greater: the cost of corruption, or the cost of compassion?”

That was the question posed during a recent meeting of Boston Global Forum. Led by BGF Co-Founder and Chairman Michael S. Dukakis, attendees gathered to discuss the plight of the working poor worldwide, and determine paths of action to address the pandemic problem of worker safety.

Mr. Tuan Nguyen, Editor-in-Chief of Boston Global Forum.

Mr. Tuan Nguyen, Editor-in-Chief of Boston Global Forum.

Global outcry reached a peak on April 24, 2013, when more than 1,000 garment workers in the Rana Plaza of Bangladesh – most of them women – were killed in a factory collapse. The building was just one of the country’s 5,000 factories, few of which are regulated, and the tragedy shone a spotlight on the need for workplace requirements as well as human dignity.

Bangladesh is pivotal to the international garment industry. While it is second only to China in the revenues generated from garment production, Bangladesh’s factory workers have little hope for economic growth, receiving just one-fifth of the wages Chinese garment workers receive. Despite this economic disparity, garment exports from Bangladesh are expected to triple between 2005 and 2010, and triple again by 2020.

Declaring minimal standards for worker safety as the 2013 Issue of the Year, the Boston Global Forum will host a conference on minimal global standards for worker safety on Nov. 18th from 7:30-9 a.m. The web-based seminar will air early to allow individuals from Asia to participate. The conference will bring together leaders in public policy, business, organized labor, civil society and the media, as well as providing participants the opportunity to provide their own viewpoints.

 

Chairman Dukakis posed a thought-provoking point during the meet

Chairman Dukakis posed a thought-provoking point during the meeting.

Dukakis stressed the importance of not only providing a forum for people to discuss issues of worker rights, but also bringing together leaders from multiple fields connected to international production and business. “We have an enormous opportunity here,” Dukakis said. “If we can bring in good people and develop a growing group who have significant experience dealing with this, we can really make some sense (of this issue).”

Tuan Nguyen, Co-Founder and Editor-in-Chief of the Boston Global Forum, focused on diversifying the conference’s audience between the U.S. and Asia. “It’s very important, and the online conference will help many people contribute, moderate, and even interact across online and social media,” he said.

Professor John Quelch of the Harvard Business School addresses the meeting.

Professor John Quelch of the Harvard Business School addresses the meeting.

Robert Kuttner, Co-Founder and Co-Editor in Chief of The American Prospect magazine, said, “what drives (this situation) is these desperately poor countries eager to attract lots of jobs in apparel. There are hundreds of millions of people who desperately need these jobs. Even though these jobs are dismal by American standards, defenders of the low standards will say, well, they’re better than what was there before. It incubates an industry that you hope will be the first rung on the ladder of better industries.” Therefore, Kuttner said, it might behoove the conference to address not only workers’ safety, but also worker and labor rights.

Dukakis agreed, adding that the American public would be shocked to learn just how much of a difference a few pennies could make in the lives of workers. In most cases, he said, “we’re talking about a nickel (per purchase). I think the American people would respond to that.”

John Quelch, Professor of Harvard Business School, pointed out that another crucial factor of international relations was corruption.“There can be very sharply enforced rules, and still money is going under the table into somebody’s pocket,” he said. “But I’m really convinced, when looking at the economics of this issue, is that the cost of compassion is less than the cost of corruption, in terms of the retail price effect.” Still, Professor Quelch said, “the volume of production in Bangladesh is so enormous that it’s a (crucial) part of the world’s supply.”

Ultimately, meeting attendees decided to reach out to leaders across multiple fields, including public policy, journalism, civil society, business, and organized labor. The Online Conference on Minimal Global Standards for Worker Safety will be broadcast on Boston Global Forum at 7:30 a.m. Nov. 18th Boston time.

Another Possible Solution: The Trans-Pacific Partnership (TPP)

Frequent readers of our posts may have followed our developments on understanding the Cambodian model and whether it is implementable in other parts of the world. On another front, Mr. Nguyen Van Phu, Managing Editor of the Saigon Economic Times, explains the two schools of thoughts in Vietnam regarding the controversial TPP agreement. In his blog post to the Financial Times on October 10th, 2013, Mr. Phu describes how the TPP is being used by advocates as a way to enforce better labor standards for domestic workers.

Interested parties can access the original blog post from the Financial Times here.

Guest post: TPP is a remedy but of a different kind

Nguyen-Van-Phu

Activists in Vietnam fight tenaciously for many things. They’ve advocated land ownership for farmers, equal footing for the state-owned and private sectors and the suspension of a costly bauxite project that is neither financially viable nor environmentally friendly. And yet, they have never raised their voices against the dark sides of free trade agreements as have their peers in other developing countries.

Granted, the Trans-Pacific Partnership (TPP), a comprehensive free trade agreement that Vietnam is negotiating with 11 other countries including the US, will bring Vietnam some obvious benefits. However, these activists also understand very well the negative aspects of joining this “high standard” trade agreement at a time when their country is at the bottom of the global value chain. They know that local farmers will be exposed to new competition with their richer and heavily-subsidised counterparts; that Vietnam will get stuck with low-wage, environmentally costly labour-intensive industries like textiles and garments where local manufacturers can’t move beyond subcontracting jobs; and, most of all, that stricter intellectual property rights will likely translate into more expensive drugs for the Vietnamese people.

Not only have Vietnam’s liberals kept their mouths shut about these issues, they have tried to sell the TPP to the people as something inevitable, a remedy for all economic woes.

The reason is simple: these liberals want to use the requirements imposed by the TPP on its members as leverage on the government to implement much-needed reforms. They hope that once within the TPP framework, Vietnam’s government will have no option but to abide by transparency in policy-making, cease giving preferential treatment to state-owned companies, open government procurement to the private sector and pay more attention to environmental requirements… In short, do those things that their government is supposed to do but does not.

These omissions are seen especially in the case of Vietnamese workers’ well-being. Vietnam is a “socialist” country where workers are supposed to be the leading political and economic force. Ironically, however, it is the “capitalist” US that is putting pressure on Vietnam to protect workers’ interests by setting up independent labour unions. It is exactly such TPP requirements that induce many Vietnamese liberals to give their strong support to joining the trade agreement.

Among the requirements that the US will impose in return for greater access to its market, especially for Vietnamese textiles and footwear, is better treatment of workers. In a stark reality check, US Representative George Miller, a Democrat from California, has written to US Trade Representative Michael Froman questioning whether Vietnam can comply with its TPP commitments because, Miller wrote, there is evidence that export industry workers in Vietnam are “routinely denied basic labor standards.”

Froman’s written reply is also to the point: “By including Vietnam in the TPP negotiations, we have [a] mechanism to improve adherence to labor rights and working conditions in Vietnam that would not exist otherwise.”

The proposed TPP text would apply the International Labour Organization’s principles of freedom of association and the right to collective bargaining, as well as the elimination of all forms of forced labour, child labour and gender discrimination.

People may ask if Vietnamese workers aren’t protected by their government and point to an extensive network of labour unions. The sad fact, however, is that the labour unions are mostly for show. They are used as instrument of state control, and union representatives are more like officials than workers’ representatives. They are normally the ones who prevent workers from going on a strike, rather than organizing it.

A recent scandal involving four public utilities companies in Ho Chi Minh City is so far the strongest evidence of this collusion. The directors of these state-owned companies draw salaries ranging from $100,000 to $130,000 annually in a country where the per capita income is just $1,500. How could they pay themselves such high salaries? They resorted to the very basic trick of “exploiting” their own workers: instead of signing on workers as full-time employees who would enjoy full wages and benefits, they hired them as seasonal workers who were paid as little as $250 to $350 a month.

Arguably, if the workers had an independent labour union, such a scandal would not have happened. If the labour union representatives at these companies did not receive perks from the directors, they would not keep their mouths shut as they did in this case.

Such scandals make people in Vietnam wonder if it is a blessing in disguise that the US seems to be really pushing for better working conditions. Foreign investors, including those from the US, seem to like the way labour unions in Vietnam operate now. The Vietnam Chamber of Commerce and Industry, which represents domestic enterprises, has complained that “Vietnam is not ready for such high requirements on labour standards and implementation, which would increase costs for entrepreneurs, risk workers’ unemployment, and have high implementation costs.”

So whether liberals in Vietnam should regard the TPP as a remedy or just an irony, or even a double irony, remains to be seen.

 

Addressing Workers’ Condition in the World: A Conversation with Arnold Zack (Part 2)

Boston Global Forum (BGF) had another opportunity to speak with Arnold Zack, an Arbitrator and Mediator of over 5,000 Labor Management Disputes since 1957; former President of the Asian Development Bank Administrative Tribunal; designer of employment dispute resolution systems;; occasional consultant for the governments of the United States (Department of State, Peace Corps, Department of Labor, Department of Commerce), Australia, Cambodia, Greece, Israel, Italy, Philippines, and South Africa, as well as the International Labor Organization, International Monetary Fund, Inter-American Development Bank, and UN Development Program. He has also been a Member of Four Presidential Emergency Boards (chair of two). (Harvard Law School), and currently teaches at the Labor and Worklife Program at Harvard Law School.

zackSM

BGF: Following up on our previous conversation, I had an opportunity to sit down with Professor Kent Jones of Babson College, who described the situation in which Cambodia came to be an ideal location for the International Labor Organization, and their offspring, The Better Factories Cambodia, to come in and establish reasonably acceptable working standards. However, Professor Jones also warned that further replication of the model is not possible elsewhere. What is your opinion on this matter and what else do you think a group like Boston Global Forum can do to address this issue?

Arnold Zack: The Cambodian situation arose during a unique period of history and can probably not be replicated at the moment. However, there was a piece in the Wall Street Journal on Sept 23rd, 2013 reporting that Better Factories Cambodia is about to begin publicizing compliance of firms with 21 standards, including worker rights, fire safety and treatment of unions. Several international brands and firms (including Wal-Mart) have endorsed the program while the Cambodian government and the Garment Manufacturers Association have opposed it. Such a program would not be possible without independence from Cambodian control, and freedom from the corruption that plagues national government intervention in most efforts and improving worker conditions in Southeast Asia

As to what the Forum could do, I would love to see a replication in some other countries in South East Asia, ie. Bangladesh, Myanmar or Vietnam. Such replication would have to come from more powerful organizations, although the focus on Bangladesh at the present might make that a possibility. I am not sure if the ILO is looking to be involved, even though they have set up similar programs in Africa.

Right now, I think the real need is getting existing Codes of Conduct implemented in these countries, and not focusing on establishing new ones. The Codes themselves are meaningless and multitudinous. Local factories ignore them. Ideally, local governments would help enforce them as in the case of Brazil, where graft is not such a problem.  That is why international initiatives such as by the ILO are keys to advancement. I do not think the WTO is a player or wants to be. They are serious about enforcing intellectual property covenants and codes, but have clearly restrained themselves from involving in any social clauses or workplace codes.

Finally, I don’t think there is any route through the World Bank or the IMF. Having been involved with both organizations over the years (I led a survey team on reforming the Funds internal dispute resolution system), I can attest to their disinterest in social responsibility issues. Individual staff members might be interested but their focus is necessarily on dealing with financial and fiscal problems of governments and in gigantic infrastructure projects with no jurisdiction over workplace conditions.

Related article:

Addressing Workers’ Condition in the World: A Conversation with Arnold Zack (11 Sep 2013)

Despite what happened, Bangladeshi factory owners still abuse their workers

Even though safety standards have improved somewhat, Bangladeshi factory workers are still being abused due to wage and overtime violations carried out by their supervisors. Unfortunately, this situation is caused by the flawed monitoring activities by big brand names, including the Gap Inc. VF Corp., which owns The North Face, Wrangler and Nautica, and PVH Corp., which owns Tommy Hilfiger. Clearly, these multinationals need to step up their monitoring efforts as they recently all made pledges to crack down on poor working conditions in their subcontractors’ factories.

Shelly Banjo of the Wall Street Journal has the story.

Bangladesh Garment Factories Often Evade Monitoring

Safety Improves but Wage, Overtime Violations Remain Common

DHAKA, Bangladesh—Next Collections Ltd., one of more than two dozen factories owned by one of Bangladesh’s largest garment producers, tells buyers its workday runs from 8 a.m. to 6 p.m.

On a recent Saturday night, however, bright fluorescent lights flickered well past 10 p.m. as workers inside furiously stitched children’s skinny jeans bound for Gap Inc.’s Old Navy stores.

The company regularly keeps many of its 4,500 workers late—sometimes until 5 a.m.—to meet production targets set by retailers like Gap, VF Corp. and Tommy Hilfiger parent PVH Corp.  The workers themselves sometimes welcome the extra pay, but the practice apparently conflicts with the retailers’ stated policies and a Bangladeshi law that prohibits more than 10 hours of work a day, including two hours of overtime.

AM-BA543_BANGLA_DV_20131003111034Photo: Shelly Banjo/The Wall Street Journal
Mohammad Mazharul Islam, a former worker at the Next Collections factory, where he alleges he was beaten.

The late hours at the Next Collections factory show the challenge retailers face in trying to police supply chains that can run to hundreds of factories in several countries. It also makes clear that recent pledges by retailers to crack down on poor working conditions in the wake of multiple deadly disasters in Bangladesh’s textile industry won’t amount to much without careful follow-up to monitor compliance.

Ha-Meem Group, which owns Next Collections, didn’t respond to repeated requests for comment. In an interview with The Wall Street Journal earlier this year, owner A.K. Azad said the company is eager to keep its workers happy.

Next Collections’ gray concrete compound, located along a dirt road in the congested outskirts of the Bangladeshi capital, keeps two sets of records and pay slips, according to interviews with nearly a dozen current and former workers and managers, and supported by pay documents reviewed by the Journal and a current manager at the factory group.

“It is easy, because auditors and buyers never come around late at night to check these things,” the current factory manager said in an interview. “Sometimes, it is the only way to meet the orders on time.”

From June through September, one set of computer-generated pay slips provided to buyers and reviewed by the Journal depicts a 48-hour workweek with no more than 12 hours of overtime. Another set of handwritten documents, confirmed by the current manager, outlines which workers received dinner stipends worth about 40 cents for working past 1 a.m. That set of documents appears to show that many employees were in fact routinely working more than 100 hours a week.

imagePhoto: Shelly Banjo/The Wall Street Journal
Next Collections keeps two sets of books on workers. The handwritten one logs late hours for worker 43012, not shown on the pay stub.

 

Many of the factory records were provided to the Journal by the Institute for Global Labour and Human Rights, a workers’ rights nonprofit based in Pittsburgh. Order and production records as well as clothing labels reviewed by the Journal show that the factory recently fulfilled orders for Gap, VF and PVH. Some of the workers interviewed for this article were referred to the Journal by the institute.

VF, whose brands include The North Face, Wrangler and Nautica, has decided to stop placing work with Next Collections after finding repeated violations of its standards on wages and hours worked, according to spokeswoman Carole Crosslin. She said VF will still place orders with other Ha-Meem Group factories.

A VF compliance officer found some of the violations during an audit in January. A review in March showed the factory had made progress, but the company pulled out after another check on Sept. 23 showed the problems had returned, according to Ms. Crosslin.

“Based on our audits of Next Collections and the unwillingness of the factory’s management to fully partner with us to meet and sustain compliance with our standards, we are planning to exit the facility,” Ms. Crosslin said.

imagePhoto: Saima Kamal for The Wall Street Journal
At the Next Collections factory, lit up in the far background, garment workers are sometimes kept until 5 a.m.

 

Gap said it launched an investigation into possible violations of its standards in response to inquiries by the Journal last week. It has interviewed 50 current workers and management but has yet to reach a conclusion.

“Our contracts require that factory management pay overtime and abide by all local labor laws and industry standards,” spokeswoman Debbie Mesloh said. “Should these allegations prove to be true, Gap Inc. will take action, up to and including terminating its business relationship.”

A spokesman for PVH said the company’s records show it hasn’t produced at the facility since early 2011 but that it would continue to look into possible unauthorized production, such as work that is subcontracted to the factory without PVH’s knowledge.

PVH, based in New York, has signed on to an accord led primarily by European companies that sets legally binding rules for safety improvements at Bangladeshi factories funded by retailers and apparel companies. Gap and VF have joined a separate pact led by American companies that isn’t binding and will help finance improvements that will be paid for by the factory owners. Both accords set up inspection regimes that are aimed at weeding out unsafe factories.

Labor groups and safety experts say fair treatment of workers and the sorts of practices that make factories less disaster prone go hand in hand. In many deadly incidents, workers have noticed problems but were ignored by managers focused on meeting orders.

That includes the Rana Plaza garment factory, where workers were alarmed by new cracks in the building but were forced to go back to work. The collapse of the building in April killed more than 1,100 people. The incident and a series of deadly fires that have killed hundreds more have focused international attention on safety conditions in Bangladesh.

Conditions at factories like Next Collections show that even if factories add fireproof doors and shore up cracks, the economics of a garment business that awards short-term contracts to the lowest bidders means factories still face pressure to violate wage and hour policies to compete, according to Charles Kernaghan, director of Institute for Global Labour and Human Rights.

Abundant workers who are among the lowest paid in the world have helped make Bangladesh one of the largest exporters of clothing for Western consumers hooked on cheap goods. The country’s minimum monthly wage stands at 3,000 taka, or about $40. Workers have held protests across the country in an effort to raise it to about $100.

Ha-Meem Group is a big player in the industry. The group of factories is run by Mr. Azad, the former president of the Federation of Bangladesh Chambers of Commerce and Industry and the owner of a prominent Bangladeshi television station and newspaper.

Next Collections began production in 2011 to absorb orders after a fire damaged another Ha-Meem Group factory nearby. The 2010 fire at That’s It Sportswear—which was producing clothes for the Gap, PVH and J.C. Penney Co. —killed at least 27 workers and injured 100 others.

Following a public outcry, Gap, PVH and Penney sent a letter asking Mr. Azad and Ha-Meem Group to improve safety at their factories. Gap stayed with Ha-Meem Group as the textile conglomerate made improvements to its buildings and strengthened its fire safety protocols.

In the interview earlier this year with the Journal, Mr. Azad said his company was working hard to upgrade factories, especially given safety concerns following the Rana Plaza disaster. He said the company had set up an internal committee to study improvements and planned to add sprinkler systems, among other steps.

“Customers are very concerned,” he said. If there is another major factory disaster in the country, he said, “Bangladesh will be history for garments.”

Workers and managers at the Next Collections facility say they feel the building is safe. Workers say they are comfortable navigating escape routes and handling equipment in case of a fire. Doors are typically unlocked, and regular fire safety drills are conducted, they said.

Still, current and former workers at Next Collections allege that hours are long and that managers shortchange their wages, force resignations from pregnant staff, deny workers maternity and holiday benefits, and physically abuse and verbally harass employees who are found to be trying to form a labor union.

In one case, former worker Mohammad Mazharul Islam said the factory’s managing director beat him with a stick so forcefully that he spent four nights in a nearby hospital, according to his accounts and hospital records reviewed by the Journal. The 25-year-old has since started another job at a garment factory nearby.

Commitments to improve such conditions can be hard to verify.

“None of the buyers can understand what goes on when they are not there,” said Azim Sheikh, a 26-year-old ironer at the factory who says he makes about $56 a month.

Where the Possible Solution May Come From: A Discussion With Professor Kent Jones (Part 2)

[For Part 1 of our discussion, please click here]

Dr. Jones specializes in trade policy and institutional issues, particularly those focusing on the World Trade Organization. He has served as a consultant to the National Science Foundation and the International Labor Office and as a research associate at the U.S. International Trade Commission, and was senior economist for trade policy at the U.S. Department of State. Dr. Jones is the author of numerous articles and four books, including Politics vs. Economics in World Steel Trade, Export Restraint and the New Protectionism, Who’s Afraid of the WTO? and most recently, The Doha Blues: Institutional Crisis and Reform in the WTO.

jonesIn light of some recent developments Boston Global Forum (BGF) has made, we had an opportunity to sit down with Professor Kent Jones of Babson College again to explore other possible solutions for our topic. Readers of our previous posts may have noticed that BGF was able to identify Better Factories Cambodia as a possible model for other countries to replicate. However, according to Professor Jones, there is a reason why this strategy may not be possible.

BGF: Many experts attributed the success of Better Factories and the International Labor Organization’s involvement in Cambodia to a trade agreement between the U.S and Cambodia in 1999, which basically required improved labor conditions for factory workers in exchange for a higher percentage of quota for garment exports into the U.S. If this is the case, why do you think that the U.S government, or any other Western powers, did not re-implement a similar agreement in order to incentivize local authorities to come up with better working conditions for garment workers in their countries?

Professor Kent Jones: There was indeed a formal special textiles/clothing trade agreement between Cambodia and the US in 1999, which led to improvements in working conditions there.  Unfortunately, the circumstances that allowed this agreement have changed, and it is no longer possible to replicate it for other countries.

At the time, Cambodia, like all other developing countries, was subject to the Multifiber Agreement (MFA), a global system of trade quotas on nearly all categories of clothing sold in the US, Europe and other industrialized countries.  Each exporting country typically had certain quota shares in the US market, which were strictly controlled.

The US-Cambodia agreement was designed to provide an incentive for Cambodia to improve worker rights and working conditions in exchange for significant increases in its quota access to the US market.  As part of the arrangement US AFL-CIO representatives went to Cambodia to organize workers there and monitor progress.  There were controversies during those years as to how much progress was being made, but in the end Cambodia did receive increased market access as a result of the reforms that took place.

There were two important elements of the deal that were crucial in making it work.  One was that the MFA ruled the world textile/clothing market.  This global system of quotas allowed countries like the US to offer special deals to certain countries based on criteria such as progress on worker rights (other deals were based on political criteria).  The second element was that Cambodia was not in the WTO; it joined eventually in 2004.

These circumstances were important because the MFA was being phased out at the time for members of the WTO, based on the new agreements of the Uruguay Round of trade negotiations, completed in 1994.  As long as the MFA was in force, Cambodia could benefit from its special agreement on market access with the US, since all other countries were restricted by MFA quotas.  As the MFA was phased out over the period 1995-2005, all WTO countries were gradually allowed more and more unfettered access to the US and European markets, which was eroding the benefits of any extra quota access granted to Cambodia.

Still, the US-Cambodia deal allowed the US to continue the incentive program until Cambodia joined the WTO (after a long accession process) in 2004.  At that point, Cambodia was entitled to the full benefits of the MFA phase-out that was completed in 2005.  The US no longer had any leverage to control Cambodian market access to the US, based on the MFN treatment Cambodia received upon joining the WTO, and the MFA phase-out that now applied to Cambodia as well.

We now have a quota-free global trading environment in textiles and clothing.  Tariffs are still imposed on these products, but they are regulated by the WTO tariff binding rule, which prohibits countries from raising tariffs unilaterally.  In addition, the MFN rule prohibits WTO members from raising tariffs against any other individual WTO member on a discriminatory basis.  Thus a deal like the earlier US-Cambodia agreement would no longer be possible for any WTO members, including Bangladesh.

The legacy of the agreement was that it gave the ILO, workers’ rights and labor unions a foothold in Cambodia, and these groups continue to have some impact there.  Improvements in working conditions and worker rights in Bangladesh and other countries will have to come from other strategies besides intergovernmental trade deals.

This is why, as I suggested in our discussion a few weeks ago, that company codes of conduct, backed up with consumer group or NGO pressure, would be the most promising path.

Otherwise, a formal plan for improving a country’s work environment would require the government itself to agree to ILO and/or outside group monitoring of labor conditions.  The US and other countries may need to find other means of leverage in order to persuade reluctant governments to implement reforms.

BGF: Thank you for your insights, Professor.

Better Factories Cambodia Face Challenges Ahead

Even though championed by many people as the representative model for the improvement of international labor standard, Better Factories Cambodia has recently come under pressure and criticism from both the Cambodian government and the factory association when the group decided to introduce an extensive initiative to improve garment workers’ conditions. This dilemma comes as the authority argues that tougher supervision will force businesses out of Cambodia and into less-regulated neighboring countries. This is clearly an existing paradox that any country must solve. If you were the Prime Minister or President of Cambodia? What should you do?

Boston Global Forum will work on these propositions in the coming month and will convene for another round of discussions in October 2013. If you wish to join our conversation or participate in our meetings, please send in your request to our Editor-in-Chief, Mr Nguyen Anh Tuan at Tuan_Nguyen@BostonGlobalForum.org

The original story was reported by Kate O’Keeffe of the Wall Street Journal.

Cambodian Garment Factories Come Under Scrutiny

U.N.-Backed Group to Publicize Safety Failings Over Government Objection

A monitoring group backed by the United Nations said it would begin to publicize garment factories’ compliance with worker rights and safety standards in Cambodia, a controversial program that its organizers say will be the world’s most extensive initiative to improve working conditions at plants.

MK-CG481_CCLOTH_G_20130922180752Photo: European Pressphoto Agency

A group plans to publicize compliance with worker rights at garment factories. Above, a Cambodia facility.

The program, which Better Factories Cambodia began rolling out on Friday, comes as the global garment industry faces increasing pressure to improve conditions after the collapse of a garment factory in Bangladesh killed more than 1,100 people in April.

Accidents also have occurred in Cambodia recently, including two at factories in May, one of which left two people dead.

But Cambodia’s government and the country’s factory association have opposed the new program, saying it could wind up shaming only some factory owners and driving business to other countries where oversight is less rigorous.

The Better Factories program, set up by the U.N. and other groups a dozen years ago to improve conditions in Cambodia’s garment trade, is trying to reassert itself after coming under fire from some worker advocacy groups for not doing enough to improve factory conditions. Better Factories, among other things, inspects manufacturing facilities for problems such as child labor and unsafe conditions and offers training for factories to upgrade but has no enforcement power.

image

Jill Tucker, Better Factories Cambodia’s chief technical adviser, said she hoped that the new push to publicize compliance with worker rights and other standards not only will improve factory conditions in the Southeast Asian nation, but also will pressure people in the garment industry in other countries.

Getting support for the plan from all of Better Factories’ financial backers—which include the Cambodian government, the garment manufacturers’ association, unions, international buyers and foreign governments, such as the U.S.—has been a challenge, Ms. Tucker said.

Sat Samoth, undersecretary of state at Cambodia’s Labor Ministry, said the disclosure plan would violate a memorandum of understanding between the government and the U.N. International Labour Organization.

And the plan won’t help workers, Mr. Sat said. “If we disclose the names of the factories, and then the buyers stop purchasing the products, what will happen to the workers? They will lose their jobs,” he said. The government punishes factories that break the country’s labor laws.

Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, called the Better Factories plan an example of “vigilante justice” and said that any change at factories has to be “demand-driven.”

“Consumers talk, talk, talk. But at the end of the day, they just buy the cheapest thing on the shelf,” he said.

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Photo: Will Baxter/Bloomberg News

The Garment Manufacturers Association in Cambodia called the plan ‘vigilante justice.’ Above, workers leave a truck at the end of a workday in the country.

Starting this January, Ms. Tucker said, Better Factories plans to release information on a new website about the performance of all factories it has inspected at least twice regarding 21 issues, such as wages, worker rights, fire safety and treatment of unions.

Currently Better Factories Cambodia submits confidential reports to factories, whose business partners have the option to buy them. It also publishes public summaries that don’t name plants.

Under the new program, factories that have had three or more Better Factories inspections and still fall two standard deviations below the mean for compliance will be subject to an even higher level of disclosure. About 15 of the 450 factories the program monitors currently would fit that description. The public will see how they measure up against 53 legal requirements.

During the first year of the initiative, factories will get one opportunity to resolve any violations before they are disclosed. From then on, their performance will be published without negotiation.

Wal-Mart Stores Inc. the world’s largest retailer by sales, applauded Better Factories Cambodia’s plan. “We know that transparency is vital to make progress in improving factory conditions throughout the global supply chain, and can only be accomplished by working with stakeholders across the industry,” it said.

Sweden-based H&M Hennes & Mauritz AB also expressed support for the plan and said it wouldn’t lead the retailer to abandon any potentially problematic plants without good reason.

“H&M is aware of the challenges the factories in Cambodia face,” said spokeswoman Andrea Roos. The company doesn’t immediately stop working with factories if problems are detected, she said. As long as factories take negative findings seriously and commit to resolving issues, H&M prefers to maintain long-term relationships with them, Ms. Roos said.

Kong Athit, vice president of the Coalition of Cambodian Apparel Workers’ Democratic Union, said the Better Factories initiative would give the union more ammunition to pressure brands to force their factory partners to improve conditions.

Created a dozen years ago, the Better Factories program in Cambodia initially had a powerful weapon to encourage factories to improve: Under a 1999 trade deal, the U.S. offered to expand access to its market, which had quotas on garment imports, if Cambodian companies improved labor standards.

The 2005 expiration of the quota system left the Better Factories program without much leverage to pressure factories. It also enabled manufacturers to campaign successfully for Better Factories to stop naming them in their public reports, which, the companies said, could hurt their business, said Sandra Polaski, a deputy director general of the U.N. International Labour Organization.

Mr. Loo, of the manufacturers’ association, said the factories weren’t powerful enough to have forced the program into making the change.

Ms. Polaski and Ms. Tucker said the decision was a bad one that eroded the program’s progress in the country.

The ILO now is pushing for greater transparency in all of its monitoring programs globally. The organization’s Better Work Haiti program publicly discloses key portions of its factory audits, though the garment industry there is quite small.

In Bangladesh, following the Rana Plaza disaster, a consortium of more than 80 brands signed a fire and building-safety accord, which will publicly disclose factory performance.

David Welsh, Cambodia program director for the Solidarity Center, a nongovernmental organization affiliated with the U.S.-based AFL-CIO labor group, said that if any stakeholder in Cambodia doesn’t get on board with the new Better Factories proposal, “it’s a de facto admission that they either can’t or won’t monitor what’s going on in their factories and an admission that presumably, they suspect what’s going on doesn’t meet international labor standards.”

Where the Possible Solution May Come From: A Discussion With Professor Kent Jones (Part 1)

[For Part 2, please click here]

Boston Global Forum (BGF) had an opportunity to sit down with Professor Kent Jones of Babson College. Dr. Jones specializes in trade policy and institutional issues, particularly those focusing on the World Trade Organization. He has served as a consultant to the National Science Foundation and the International Labor Office and as a research associate at the U.S. International Trade Commission, and was senior economist for trade policy at the U.S. Department of State. Dr. Jones is the author of numerous articles and four books, including Politics vs. Economics in World Steel Trade, Export Restraint and the New Protectionism, Who’s Afraid of the WTO? and most recently, The Doha Blues: Institutional Crisis and Reform in the WTO.

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BGF: As an authority on international trade, what do you think will be a possible solution to prevent another Bangladeshi tragedy from happening?

Professor Kent Jones: As any economists would point out, the problem is clear—the building’s standard was extremely poor and, thus, a possible solution must involve the improvement of building standards in factories around the world. However, this is a very complicated task to achieve, and any meaningful procedure must include leadership from multiples fronts—the multinationals, the government, humanitarian groups, NGOs, groups like Boston Global Forum and international organizations such as the ILO [International Labor Organization]. The ILO does have an international labor standard and the ability to send in teams to investigate the safety of factories. However, the problem arises when the ILO does not have enforcement authority, meaning that, even though it can raise concerns over any violations of working standards, the ILO does not have any rights to punish or sanction the respective country.  The case for the WTO, however, can be more interesting. As for the idea of having the WTO address this problem, this seems to be attractive to many people, since the WTO does have the authoritative power of pressuring member countries [Bangladesh has been a member since 1995]. The procedure is as follows: if a member nation violates a WTO trade agreement, that country would have to send a representative to present in front of the WTO Dispute Settlement court in Geneva. If the country is found guilty of violating any trade codes, the WTO would allow a certain period of time for the country authority to change its policy. Eventually, if nothing happens, the WTO may then allow the country’s trading partners to raise tariff and/or other fines. Thus, it is an attractive idea that the WTO should play a role in preventing a Bangladeshi tragedy to happen again. Unfortunately, this idea will not work. First, the WTO has a very small budget [195 million Swiss Franc in 2013]. More importantly, the WTO does not protect international labor standard at the moment, and I am skeptical that any discussions to include this issue into the current code would be effective, because every time the WTO adds a certain policy, it has to receive approval from all of its 159 members.

In any cases, our best hope is to have the multinationals at the forefront of this issue, for a number of reasons, but the most important is that these brands all have images they need to keep in the eyes of the consumers. If, for example, Walmart, Macy’s and JCPenney sit down together and develop a “code standard” that requires their subcontractors to maintain the international labor standard, there is possible progress we can rely on.

BGF: You already discussed about the WTO’s role in solving this issue, how about the World Bank and the IMF?

Professor Kent Jones: These two organizations indeed have much larger budgets than the WTO and do have powers to achieve what we hope. The IMF, however, does involve in larger scale projects, for example, improving a country’s financial services sector. The WB, on the other hand, has a lot of potential to be an impactful force on the quest to improve labor standards in the countries which it provides financing.

BGF: Thank you for your time, Professor.

Training Videos on Addressing Labor Disputes: What Managers Need to Know and Do

This is a series of videos used to train managers in China to address labor disputes. Credit owed to Professor Arnold Zack of the Harvard Law School and Professor Tom Kochan of the MIT Sloan School of Management.

1) What Chinese Managers Need to Know and Do: Lessons from Richard Locke’s Global Supply Chain Research

2) Essentials of an Effective Mediation System for Workplace Disputes in China

Addressing Workers’ Condition in the World: A Conversation with Arnold Zack

Boston Global Forum (BGF) had an opportunity to speak with Arnold Zack, an Arbitrator and Mediator of over 5,000 Labor Management Disputes since 1957; former President of the Asian Development Bank Administrative Tribunal; designer of employment dispute resolution systems;; occasional consultant for the governments of the United States (Department of State, Peace Corps, Department of Labor, Department of Commerce), Australia, Cambodia, Greece, Israel, Italy, Philippines, and South Africa, as well as the International Labor Organization, International Monetary Fund, Inter-American Development Bank, and UN Development Program. He has also been a Member of Four Presidential Emergency Boards (chair of two). (Harvard Law School), and currently teaches at the Labor and Worklife Program at Harvard Law School.

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BGF: Can you tell me about your background and the works you have been involved with?

Arnold Zack: I am a lawyer, a mediator and arbitrator and I have helped design dispute resolution machinery in countries including South Africa, Bermuda, Ukraine, and many other countries. In 2005, I became interested in what is happening in China. Currently, I am involved with MIT  developing a project in China to train the next cadre of graduates at affiliated business schools to have a sensitivity of work place problems. I am also mostly interested in educating these graduates to be able to design machinery that can help avoid problems like the suicides at Foxconn, and which leads to tens of thousands of strikes in China each year.

Right now, I divide my time between arbitrating for corporations like AT&T and American Airlines and the project in China. I am primarily interested in helping workers  live in better conditions, make more money, and lead better lives. Obviously, there has to be a balance between these issues and the legitimate claims of employers making money and having responsibilities to stockholders. Of course, the question is what a fair balance should be. However, I am less interested in figuring out where this balances lies than in developing machinery and procedure so people can negotiate and talk about those problems. Especially, I would like to enable workers the ability to feel empowered enough to peacefully resolve disputes, so that they do not have to go on strikes, get beaten, thrown into jails and lose their jobs. You have to note that  there is no prescribed level as which there is an economic balance between workers and management. In fact, there are international standards and norms, but, so far, there is no legislation that mandates worldwide employers to abide by these standards.

In any cases, I hope that I can create enough public pressure and stress the self-interests of related parties to realize the benefits of developing  procedures to negotiate their differences. I think the only pragmatic approach to achieve my goal is by focusing on the self-interests and to try to establish fair procedures. We have accomplished this in the US in the union management field through the National Labor Relations Act of 1935. I have been able to accomplish this task within the U.S for individual employment disputes, outside of collective bargaining. The Arbitration Act of 1925 has been used by employers to require a commitment, by new employees that, as an employment condition, they go to arbitration mandated by the employer over any employment disputes and give up their rights to appeal to court for enforcement of statutory rights.  The Supreme Court case of Gilmer vs. Interstate/Johnson Lane in 1991 endorsed such mandatory arbitration. In this case, an employee, who was hired as a stockbroker, got fired at the age of 42 or so. He tried to sue the employer based on the Age Discrimination Act, but failed, as, upon signing the employment agreement, he had given up up his rights to go to court and was forced to go through an arbitration process. I believed this process was not entirely fair and we had to have a fair procedure, so I brought to the table all related parties—the management, the union,  worker groups, the American Civil Liberties Union the American Bar Association, and American Arbitration Association and established a standard procedure of fairness, called “Due Process Protocol.”

I have been trying to replicate this internationally, and I had some success in  developing a similar procedure in South Africa after black workers refused to join unions controlled by white workers when allowed to in 1982.  The black workers organized and white employers realized it was to their benefit to negotiate with them to resolve their disputes. We developed procedures to train mutually acceptable mediators and arbitrators and make them available to disputants to minimize strikes and establish workplace procedures for negotiation. This became the model for the development of the new constitution where the partnership of worker unions, employers and  the academics established a partnership to assure resolution of political conflict. That procedure has worked well until recently when it seems to have fallen apart.

BGF: You mentioned the self-interest of related parties, can you elaborate on this point—how does this relate to your efforts and how can this help address issues including the tragedy in Bangladesh?

 Arnold Zack:  We accept in the US that there will be a level playing fleld in which management and the designated representative of its workers will be able to meet an negotiate the resolution of their disputes over wages hours and working conditions. That is also what happened with the development of the labor law in South Africa. But the problem as it arises in an individual country is different when one focuses on the global economy, where brands and employers seek locations where they can best enhance their profit as they make their products for the global market place. With a competitive market on price, they can best maximize their profit by paying the lowest wages to workers and having them work the longest hours, particularly if the host government turns its head, accepts bribes to avoid enforcement of their national labor laws and keeps workers from organizing into a single voice to express their demands.

The concept of employees having freedom of association and the right to engage in collective bargaining is one which is enshrined not only in the UN  Human Rights Charter, it is also an international norm established by the Conventions of the ILO.  In our global economy, the quest of  employers seeking to produce their products at the lowest possible cost to enhance their profits, has too often led them to South East Asia where workers receive the lowest wages, and have the least protection from their own national governments. What transpired in Bangladesh with its garment factory fires is just the most recent example of the extent of such exploitation despite the availability of international norms trying to establish workplace fairness. As noted earlier the ILO establishes norms, but most nations do not enforce them within their  own laws and too many countries are so corrupt that they disregard the safety as well as the workplace rights of their citizens to pocket a little more money from the contracting factory owners. The world has tended to rely on the brands to monitor these factories, although the evidence increasingly shows they cant or wont do that, turning a blind eye to the corruption and worker exploitation.  There is one example to the contrary, however, Cambodia, where the ILO Itself does the monitoring, and where a separate organization the Arbitration Council provides mutually acceptable arbitrators to resolve disputes over whether there has been conformity to contract and law seeking to achieve compliance with ILO conventions. . The experience there since 2002 has lead to an expansion of the garment factories, a spread of the system to construction and tourist industries, an increase in the number of unionized employees as part of an expanding work force, and all with a notable decrease in strikes and work stoppages.. Unfortunately the Cambodian experiment has not been widely replicated because of the cost involved, but it is a beacon of what can be done with international will, national cooperation and open mindedness by the employers recognizing that they do better, and make more money when their operations are conducted smoothly without strike interruption and with machinery in place to forestall workplace disruption

Going back to our China story, the self-interest of the workers is to have fair working conditions. In the Foxconn case, a worker committed suicide because she was begging for a couple of days off to go see her brother but such leave was not approved. That case was just one of a dozen suicides. Thus, you see how the workers’ self-interest is simply being able to express themselves through a process of negotiation with the management. The United Nations Human Rights Convention gives workers the right to freely associate and to bargain collectively with management on their working conditions, wages, etc., so the workers should really have the right to get to a negotiation table and talk to their employers.IT is only logical that they strike when they are denied that basic human right. On the other hand, the self-interest of brands like Apple, Nike and Honda is to produce their products on time and sell them overseas without interruption in the workplace. Let’s take Apple, for example. Apple does not want their stockholders to say that they mistreat workers and then to decide not to invest in the company. Apple has an impact on Foxconn, but it’s also in the self-interest of the contractors like Foxconn to balance their desire for maximized profits against maintaining Apples confidence and contracts. Since , if Apple pulls out of China, Foxconn would go bankrupt. Besides, it’s also in the self-interest of the Chinese governments that these brands stay in the country to provide work and income for the Chinese citizens.

Thus, what I do now is basically to go around the world and tell these parties that it is in their self-interests to provide fair working  conditions. When I was in Shanghai to speak with the American Chamber of Commerce there, plant managers asked  how we could stop these strikes, and I told them that you could control these strikes by listening to and negotiating with the leaders speaking on behalf of the workers. They responded saying that the law did not require them to do so. In fact, even though China is a collective society, there is no room for workers to select their own unions or union leaders,  The officially recognized unions are those  organized by the ACTFU (All-China Federation of Trade Unions). Thus, the problem arises when workers believe the ACTFU does not represent them. Despite having legal and contractual rights as individuals, workers, when they unite and start demanding improved conditions, higher wages and the like, do not have any established vehicles or laws that  require employers to sit down and talk to them, even though  the ILO (International Labor Organization) Conventions of 87 and 98 state that workers have to rights to organize into unions and the right to bargain collectively with their employers.

Let’s look at an example of what has been happening in China  to gauge the power of these spontaneous strikes of workers organizing collectively. In 2010, when Honda workers went on strike and demanded a 30% increase in their payroll, the managers compromised and gave them 20%. After that, they went back on strike again and got the remaining 10% they demanded. In most parts of the world, workers have peaceful rights to organize themselves and employers have the obligations to start negotiating. Only when this procedure fails do  the employees then go on strike to exercise power to get the employer to change its position. In China and Vietnam however, it actually works backwards, the workers have to go on strike first to demand the employers to come to the table so they can talk to employers. This is the reason why I am collaborating with the business schools in China to install into the existing curricula crucial topics including negotiation, ethical standard of labor conditions and fair procedures. In addition, we’re also successful in getting a local university to establish an independent center to educate workers on topics such as peaceful resolution and the economics of running a business, as an average worker may not understand the economics of overhead, profit margin, wages, and etc.

Besides, it is also understandable why China would be skeptical of some procedures which would give workers the right to elect their own leaders, as the fall of the Soviet Union is often traced to the Solidarity Movement in Gdansk Poland where Lech Walensa led the establishment of a real trade union insisting on the right of workers to negotiate with their employer in that case the government owned ship yards. At the moment, the Chinese government does not allow workers to form their own unions. However, I believe the risk of losing foreign direct investments would outweigh the risk of opening the door for more democratic procedures at the workplace. Also, the government, so far, has not done anything to restrict us from entering the country. I am also trying to convince them that this is a practical method to resolve the problems of wildcat strikes, managers being taken hostage and other examples of frustrated workers seeking to gain a seat at the table to discuss their working conditions with management.  I believe it is also in the self interest of the ACFTU to shift its role from one of monitoring the workplace to a role of representing the workers in peaceful negotiations with their employers.

This is not complex science; it is merely recognition that all the players in the economy have priorities of self interest and achieving “more” as they define that term even if at the expense of other players in their arena.  But when the power is so lopsided that some of the players are excluded, or worse exploited, society owes it to all those involved to assure some measure of equity and fairness. In the world of factory work the world standard has been to permit employees if they so choose to band together as an entity that is more compatible to the power of the employer, and that standard as proclaimed by THE UN Charter and ILO conventions has been to encourage peaceful negotiations between the two parties as a better alternative to exploitation and workplace disruption through strikes. All I have been trying to do in the US and abroad is to encourage the parties to recognize that their self interest is best satisfied by recognizing that the other side likewise has self interests and that negotiations is the most rational means of resolving their conflicts. To the extent that I get people to listen to me, that is a satisfying reward. To the extent that they ask me to help them develop procedures to cope with these problems it is a reward not only for me but for the parties and society as a whole.

The Rana Plaza building collapse… 100 days on

In light of the tragedy at the Rana Plaza building in Bangladesh, the world is scrambling to help the survivors and commemorate the victims. Let us visit the place where it all began and hear the aftermath story from the Director of the International Labor Organization (ILO) office in Dhaka.

The ILO’s branch in Bangladesh has the story.

© Munir Uz Zaman / AFP

© Munir Uz Zaman / AFP

The Rana Plaza building collapse… 100 days on

A number of initiatives have been launched in response to the Rana Plaza building collapse in Dhaka, Bangladesh, which expand upon ILO action following previous accidents in the country. The Director of the ILO Office in Dhaka, Srinivas B. Reddy, explains what these initiatives are and the steps that have been taken on the ground.

What action has been taken during the past three months?

Since April 24, when the Rana Plaza building collapsed, claiming 1,127 lives and injuring many more, the ILO has played a lead role in seeking to address the root causes of the disaster and help rehabilitate injured victims. We are working closely with the Government and employers’ and workers’ organizations (the ILO’s tripartite constituents), to help improve workers’ rights and safety in the ready-made garment (RMG) sector.

In the immediate aftermath of the accident, the ILO sent a high-level mission to Dhaka, headed by the Deputy Director-General for field operations, Gilbert Houngbo. The result of the mission was aJoint Statement, signed on May 4, by the Government and employers’ and workers’ organizations, which set out a six-point response agenda.

What does the response agenda consist of?

The Joint Statement committed the Government of Bangladesh to submitting a set of amendments to its Labour Law, which it did on 15 July, and ILO has commented on it. The response agenda also requires an assessment of all the active RMG factories for fire safety and structural integrity, as well as measures to fix the issues discovered. It also commits the government to recruit, within 6 months, 200 additional inspectors and to ensure that the Department of the Chief Inspector of Factories and Establishments will have been upgraded to a Directorate with an annual regular budget allocation adequate to enable the recruitment of a minimum of 800 inspectors and the development of the infrastructure required for their proper functioning.

It recommends expanding the existing National Tripartite Action Plan on Fire Safety, signed after the Tazreen Fashions factory fire in November 2012. Progress has already been made through an agreement reached on July 25 by the Government, employers and workers to integrate this plan and the Joint Statement to form a comprehensive National Tripartite Plan of Action on Fire Safety and Structural Integrity in the RMG sector.

For those directly affected by the Rana Plaza collapse, a skills training and rehabilitation programme will be launched for those disabled by the disaster and those who were left unemployed.

The Joint Statement also called on the ILO and the International Finance Corporation (IFC) to consider launching a Better Work Programme for Bangladesh. Better Work is a partnership programme between the ILO and the IFC, which aims to improve both compliance with international labour standards and competitiveness in global supply chains.

How does this plan fit with the other response initiatives established by brands, retailers, global unions and other institutions since April?

These emerging response initiatives have endorsed and echoed the now integrated National Tripartite Plan of Action on Fire Safety and Structural Integrity (NTPA) and, in several cases, the ILO’s technical support has been asked for to help ensure their implementation and coordination.

For example, the ILO fulfills the role of neutral chair of the Accord on Fire and Building Safety, signed by global unions and over 80 fashion brands and retailers. The Accord is a five-year programme aimed at ensuring health and safety measures, including the assessment and remediation of structural integrity and fire safety in factories used by the signatories.

Another initiative, the Alliance for Bangladesh Worker Safety, brings together 17 US retailers and brands and aims to inspect and set safety standards in 100 per cent of the factories used by the signatories over the next 5 years.

The Sustainability Compact, between the EU, Bangladesh Government and the ILO, published in July, builds on the NTPA and seeks action on labour rights, in particular freedom of association and the right to collective bargaining, building structural integrity and occupational safety and health, as well as responsible business conduct by all stakeholders engaged in the RMG and knitwear industry in Bangladesh.

The Compact has assigned a coordinating and monitoring role to the ILO. Coordination between these various initiatives will be vital, to ensure they have the desired impact.

These plans sound good in theory but what tangible action has been taken so far?

For its part, the ILO Office in Dhaka is implementing a US$ 2 million, six-month programme from July to December this year.

The first element is assisting the constituent partners in establishing a system to undertake a preliminary assessment of the safety of factory buildings. The ILO will work with the Bangladesh University of Engineering and Technology (BUET) to train 30 specialist teams of structural engineers to undertake these assessments.

In parallel, workers in ready-made garment factories will receive safety training and those injured during the disaster and in previous accidents will begin to receive rehabilitation and skills training.

During the last three months, the ILO has also developed a broader three-year programme to take these actions forward and provide support to several key components of the National Tripartite Action Plan on Fire Safety and Structural Integrity.

This includes ensuring structural integrity assessments by trained engineers of the almost 2,000 factories not covered by the Accord and Alliance and the purchase of necessary equipment. It will also involve training of the 800 labour inspectors referred to earlier and worker and management training in occupational safety and health and worker rights.

Is this the first time that the ILO has worked in this area in Bangladesh?

We have in fact been working closely with the Government and employers’ and workers’ organizations for some time on labour conditions in the garment industry.

For example, since January 2012 a dedicated project on Fundamental Principles and Rights at Work has focused on improving workers’ rights in Bangladesh, particularly in the RMG sector. It has worked with the ILO constituents to improve labour legislation and practices in Bangladesh and to develop labour relations based on rights and responsibilities.

Technical experts from the ILO office in Dhaka have been working closely with the Government during the last year on amendments to the country’s labour law, with a view to bringing it into line with international labour standards.

As previously mentioned, we also promote safer work places and have assisted the Government and social partners in developing the national response to the Tazreen factory fire in November 2012. ILO projects have also produced a fire safety video designed to be shown to and understood by all factory workers in the country and is working on a number of outreach efforts to improve knowledge of occupational safety and health best practices.

What are the next steps in the response?

We will work closely with the Government and employers’ and workers’ organizations as they implement the National Tripartite Action Plan on Fire Safety and Structural Integrity in the RMG sector, over the coming weeks and months.

A priority will be to help ensure that skilled engineers are making initial structural integrity and fire safety assessments of garment factory buildings. These will be undertaken by the engineering teams led by BUET and will be underway by September.

Skills training of disabled workers, in partnership with the Bangladesh Rural Advancement Committee (BRAC), will also be up and running and we will help coordinate services to injured and unemployed Rana Plaza victims through the National Skills Development Council Secretariat.

Training programmes for trade union leaders, mid-level managers and supervisors on occupational safety and health and workers’ rights are also due to begin, along with training to strengthen the labour inspection system.

The ILO will continue to engage with the government and its other constituents with regard to the legislative framework.