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Bangladesh Brussels, 8 July 2013

EU Trade Commissioner De Gucht launches Global Sustainability Compact in response to Bangladesh tragedy

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EU Trade Commissioner Karel De Gucht today launched a joint initiative for improving conditions for workers in Bangladeshi garment factories. The move is a response to the collapse of the Rana Plaza building in Dhaka in April which resulted in over 1,100 deaths.

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The Sustainability Compact seeks to improve labour, health and safety conditions for workers, as well as to encourage responsible behaviour by businesses in the ready-made garment industry in the South Asian country.

Joining Commissioner De Gucht in Geneva to co-launch the Compact were Bangladeshi Foreign Minister Dr Dipu Moni and International Labour Organisation (ILO) Director-General Guy Ryder. Representatives of Bangladeshi manufacturers, major European importers, trade unions and other key stakeholders supporting the initiative were present at the launch as well.

“It’s clear that we need to join forces to be able to improve the labour conditions for the thousands of Bangladeshi workers in the garment industry”, said Commissioner De Gucht. “This Compact is the basis - now we need to make every effort to make it a reality so that another Rana Plaza-type tragedy in Bangladesh can be avoided. The EU is ready and committed to support Bangladesh's efforts.”

The initiative, the full title of which is “Compact for Continuous Improvements in Labour Rights and Factory Safety in the Ready-Made Garment and Knitwear Industry in Bangladesh”, lists commitments to act within deadlines on issues such as:

  • Reforming the Bangladesh Labour Law to strengthen workers’ rights, in particular regarding freedom of association and the right to collective bargaining, and to improve occupational health and safety. A new Labour Law should be in place by the end of 2013. The ILO will monitor the effective enforcement of the new legislation.
  • Recruiting 200 additional inspectors by the end of 2013, as part of the efforts to ensure regular visits to factories and assess them in terms of working conditions, including occupational safety and health, and compliance with labour laws.
  • Improving building and fire safety, especially structural safety of buildings and fire safety in ready-made garment factories, by June 2014. The ILO will help to coordinate efforts and mobilise technical resources.
Background
EU-Bangladesh trade relations

The EU is Bangladesh’s leading trading partner. Bangladesh’s total exports to the EU amounted to €9.2 billion in 2012, which represents about 10% of the country’s GDP. Some 90% of Bangladesh exports to the EU are ready-made garments – corresponding to 60% of Bangladesh’s total ready-made garments exports and some 2.5 million jobs.

The ready-made garment industry is a driver of sustained economic growth in Bangladesh, which over the past two decades has helped cut core poverty from 60% to 30% of the population. The garments industry employs some 4 million people – of which about 80% are women – and indirectly supports the livelihoods of as many as 40 million people – about a quarter of Bangladesh’s population.

As a Least-Developed Country, Bangladesh benefits from duty-free quota-free access to the EU market for all its products under the Everything but Arms (EBA) initiative, which covers 55% of Bangladesh’s exports. Trade preferences under EBA are particularly important for ready-made garments and are, therefore, a major contributor to employment and income generation for millions of people in Bangladesh. However, in order to continue to benefit from this scheme, certain legal conditions have to be met: human and core labour rights must be respected. It is important, therefore, that Bangladesh shows sustained progress in improving its labour rights and working conditions in line with core ILO conventions.

What has the international response to the tragedy in Bangladesh been so far?

On 28 May, EU Trade Commissioner Karel De Gucht met with Bangladesh Foreign Affairs Minister, Dr Dipu Moni. In a joint statement, they expressed their resolve to encourage all those involved in the global value chain for ready-made garments to work together to promote fair, ethical and responsible supply chain management. Mr De Gucht and Mr Moni also welcomed and encouraged the efforts of the ILO to bring together relevant stakeholders to tackle underlying problems.

The initial responses to the tragedy also included the 4 May Joint Tripartite Statement by government, employers and workers adopted under the aegis of ILO, and the drawing up by Bangladesh’s government of a package of labour law reforms. Depending on the final content of this legislative proposal, Bangladesh could qualify for the ILO Better Work Programme.

The EU strongly believes that all companies should respect labour standards throughout their supply chain in line with internationally recognised Corporate Social Responsibility principles and in dialogue with workers' representatives. In this respect the "Accord on Fire and Building Safety", signed so far by over 65, mostly European, major fashion and retail brands sourcing garments from Bangladesh, is a first concrete response.

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