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Bangladesh Garment Manufacturers Demand Higher Prices from Buyers

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If the cost of production rises, it generally follows that garment prices will have to rise to suit, but that hasn’t been the case in Bangladesh.

The country has been working to correct compliance issues in its factories since the Tazreen and Rana Plaza disasters, and putting those improvements in place has proven costly.

But garment prices have not gone up to accommodate those costs, and in some cases, prices per garment have even gone down.

Ahead of the second follow-up meeting Thursday on the Bangladesh Sustainability Compact—a joint initiative of the Bangladesh government, the International Labour Organization (ILO), the European Union and the United States, launched in the wake of Bangladesh’s biggest garment sector tragedies—garment manufacturers made a plea for higher prices from retailers.

“After the twin industrial disasters we have done everything as per the recommendations by the international communities,” Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told the Daily Star. “But, we are not getting fair prices.” And Bangladesh wants buyers to pay up for their garments.

The Sustainability Compact stakeholders, however, don’t think Bangladesh has quite “done everything.”

In a joint statement following last week’s meeting, representatives said practical measures and repairs still need to be carried out in factories, like building capacity for supervision of occupational safety and heath conditions, electrical safety and structural integrity of buildings.

Compact partners also agreed that Bangladesh still needs to ensure the trade union registration process is carried out smoothly, adopt necessary legislative changes to protect freedom of association and collective bargaining rights, and take on remediation and transparent monitoring of ready-made garment factories in a timely and effective manner, and in accordance with developed corrective action plans.

Rahman said, however, factories listed with the Bangladesh Accord on Fire and Building Safety and the Alliance for Bangladesh Worker Safety improvement initiatives have already begun their remediation efforts—some have fully completed the work and others are more than halfway through.

He also noted that the country amended its labor law in July 2013 to allow “full” freedom of association, and that the country has since recruited new factory inspectors, increased garment worker salaries by 77 percent and introduced a worker hotline for reporting workplace complaints.

The Bangladesh Government is so confident in its progress, in fact, that Commerce Minister Tofail Ahmed said in December that fire and building safety have “greatly improved,” that most of the factories are now compliant and that workers are happy with the safe working environment. As a result, Ahmed said Bangladesh would not extend the Alliance and Accord programs past their five-year contracts slated to end in 2018.

Partners in the Sustainability Compact, which now also includes Canada, did agree that “important work has been done on initial safety inspections in factories and to strengthen capacity of inspection services,”

EU Trade Commissioner Cecilia Malmström said, “The Compact cooperation shows that we can team up with other concerned partners and work towards bringing about positive change.”

Marianne Thyssen, the EU Commissioner for Employment, Social Affairs, Skills and Mobility added, “The progress achieved so far proves that initiatives like the Bangladesh Compact can be effective in promoting genuine social dialogue and decent working conditions in the global context. While aiming for more fairness in global supply chains, we must also continue to encourage essential reforms.”

Whether of the belief that progress has been far-reaching or that it still has a good way to go, some progress has in fact been made, and according to Rahman, factory owners are spending an average of $638,000 to implement remediation plans, and that—in addition to higher energy prices, higher transportation charges and higher wages—has fueled factories’ production costs to challenging levels, giving rise to the call for buyers to pay higher prices.

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