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E.U. Pressures Bangladesh to Expedite Reforms; Countdown to Rana Plaza Anniversary Begins

As the anniversary of the Rana Plaza factory collapse fast approaches, the European Union (E.U.) is increasing its pressure on the Bangladesh government to improve its labor conditions and factory safety.

A parliamentary delegation from the E.U. arrived in Dhaka, Bangladesh on March 24, one month in advance of the one-year anniversary of the Rana Plaza tragedy, which claimed the lives of more than 1,100 workers. This is the first visit from such a high-ranking E.U. delegation since January 5, just following the nation’s general elections. Jean Lambert, chairperson of the delegation for relations with South Asia, said, “European buyers and Bangladeshi owners should continue to fullfil their commitments under the EU-Bangladesh Global Sustainability Compact.” She continued, “When the European consumers purchase clothes, they want to be sure that these have been produced by people who are safe at work and earn a decent living.”

Lately, the E.U has publicly expressed its frustration with the crawling progress of the Bangladesh government in stewarding the reforms it has committed to. William Hanna, the European Ambassador to Bangladesh, lambasted the Bangladesh government for its paltry progress regarding the improvement of factory safety and labor conditions. He conceded that there have been some victories, especially regarding disbursing compensatory funds to the families of the Rana Plaza tragedy victims, other areas of reform have been less impressive. Hanna bluntly expressed his frustration. “No, I’m not satisfied,” he said. “There’s been some progress and lot more needs to be done.” Hanna even complained that some accomplishments, like an increased minimum wage, have been tarnished by incompetent implementation. He said, “It’s a good thing that the minimum wage has been increased, but it’s not good to hear that it’s not applied [in some factories].”

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Still, the E.U. doesn’t seem to have any plans to impose a punishment upon Bangladesh for its feet-dragging. Just recently, Hanna reported that, despite intense criticism of its factory safety and labor conditions, Bangladesh will not suffer any revision in its current status under the E.U.’s Generalized System of Preferences (GSP). Some believed that, as a symbolic show of protest against Bangladesh’s crawling progress toward improved factory safety and labor conditions, the E.U. might pull its duty free access to European markets, including apparel products. A member of the WTO since 1995, Bangladesh benefits from the E.U.’s “Everything But Arms” arrangement, which allows it duty free access for all exports, excluding arms and ammunition. And while the U.S. has suspended duty free access for Bangladesh until it improves factory safety, this has little effect on the garment industry since it only applies to goods like golf equipment, kitchen appliances and ceramics. Bangladesh’s garment industry has never qualified for duty free access to the U.S. market.

If any marketing block has the collective power to harangue Bangladesh into faster reform, it’s probably the E.U. Bangladesh’s $20 billion garment manufacturing industry is heavily dependent upon its access to European markets. Despite its recalcitrant political troubles, Bangladesh continues to be a magnet for apparel suppliers. Its readymade garment exports climbed nearly 20 percent year-on-year during the first half of 2013. From July to December 2013, garment exports hit $11.93 billion, a significant improvement over the same period the previous year, which achieved $9.95 billion. Exports of woven garments did particularly well, leaping 20.37% to $5.98 billion while knitwear exports increased by 19.55% to $5.95 billion. The Bangladesh government expects total garment exports this year to increase a little more than 12 percent to approximately $24 billion.

Nevertheless, the E.U. continues to work closely with Bangladesh, despite its consternation with its painfully slow march toward reform. The International Apparel Federation (IAF) was recently awarded a grant from the European Union (E.U.) to improve the South Asian nation’s jerry-built infrastructure. The grant to the IAF is also extended to two of its member associations, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Hellenic Clothing Industry Association (HCIA). The scope of the project funded by the E.U. is wide including the building of additional capacity, the updating of knowledge transfer technology, the extension of existing networks, and access to various training seminars to be held in both Europe and Bangladesh.

Also, there has been some progress to report. Just recently, the Accord on Fire and Building Safety in Bangladesh (AFBSB) finally arrived at an agreement regarding the new inspection standards that will apply to all its signatory members. These standards largely apply to factory building safety with particular reference to fire and electrical ordinances. As AFBSB’s website explains, the new strictures are the result of a collaborative effort that involved input from several sources: the National Tripartite Plan of Action, the Alliance for Bangladeshi Worker Safety (ABWS) and the International Labor Organization. The final product is based on the existing Bangladesh National Building Code, albeit in thoroughly revised form.

As the Rana Plaza anniversary draws near, it’s likely Bangladesh will be called upon more forcefully to account for its steps toward improvement, as well an answer for its missteps as well. The visitation by the E.U. delegation is only the first of what is certain to be many calls in the next month for a scorecard of Bangladesh’s reform efforts.