USBAC Comments on Bangladesh Worker Safety Initiative at Press Briefing

Bipartisan Policy Center
10:00AM, July 10, 2013

Presented by Shamarukh Mohiuddin, Executive Director, USBAC

The U.S. Bangladesh Advisory Council (USBAC) is a non-profit, non-partisan organization dedicated to
promoting U.S.-Bangladesh relations through dialogue and public policy, as well as greater rule of law
and economic development in Bangladesh.

We would like to applaud the Alliance of North American brands for working for the past couple of
months to produce a plan of action for worker safety in Bangladesh. It signifies their commitment to
the country and their willingness to stay engaged and address some of the difficult challenges that
Bangladesh faces in its path towards economic development.

Global businesses play a crucial role in contributing to growth in developing countries. At the same
time, the operations of business actors may also adversely affect the enjoyment of human rights. The
impacts of business enterprises on the full range of internationally recognized human rights have
been firmly documented and these rights must always be upheld. The effort by the Alliance to
formulate a plan of action for Bangladesh reflects this spirit.

It is our belief that global retailers have already expanded traditional business risk assessments to
focus on risk to the people in the supply chain, and have developed adequate indicators to measure
such risk. In the face of the risks faced in Bangladesh, we feel that the country’s record in overcoming
difficult problems such as the eradication of child labor, the indomitable spirit of its entrepreneurs, and
the strength of its civil society, provide good indications that global businesses can reap substantial
rewards if they consider the long terms rewards of staying engaged in this emerging economy.

USBAC would also like to thank the Bipartisan Policy Center for taking on this initiative to bring the
North American brands together and especially Senators George Mitchell and Olympia Snowe for their
leadership in helping them find consensus on a plan. We also appreciate that the USBAC was invited
to provide input on the Bangladesh Worker Safety Initiative while the Alliance was in the process of
formulating it.

Bangladesh now stands at a critical juncture. The country has recorded economic growth rates of over
5 percent and achieved significant progress in human development including cutting poverty by a third
over the last 20 years, halving the population growth rate since its independence, and making
significant strides in education and health.  

Thanks to the role of NGOs such as BRAC and Grameen and to female employment in the garment
industry the fertility rate has also come down from 6.3 to only 2.3 in the last four decades and the
female literacy rate has doubled. As noted, of the 4 million people who work in the garment sector,
more than 80 percent are women. Women have been delaying childbirth due to job opportunities in
the sector and they have become more significant political and economic decision-makers.  

On the other hand, there is the danger that this progress may be reversed if businesses are driven
away by the gaps in governance, including in corporate governance. We can only hope that
businesses would stay engaged following industrial disasters both due to global corporate citizenship
responsibilities and due to the promise of future profits. However, the Bangladeshi government has
much at stake. The garment sector makes up a fifth of the Bangladeshi economy and four-fifths of its
exports. The government in Bangladesh must work comprehensively with the US brands, the local
private sector (BGMEA, BKMEA), international organizations and NGOs to address the compliance
issues faced in terms of structural safety of factories as well as the poor industrial relations practices
that plague the industry.

We believe that the Bangladesh Worker Safety Initiative can be a game-changer in terms of worker
safety in Bangladesh if the members of the Alliance deliver on their promises over the next five years
and if all stakeholders including the Bangladesh government and industry remain fully invested in
promoting worker safety in a transparent manner. The objectives of the Initiative must be matched with
ongoing efforts and resources to implement it, in collaboration with the necessary partners. We also
hope that greater coordination is forged between the social responsibility and sourcing arms of the
companies in question.

We appreciate some of the innovative elements of the Initiative including the establishment of an
anonymous worker hotline that will use mobile technology and be administered by a third party. We
have high expectations that these new systems will help workers avoid intimidation by employers.

The Initiative also includes a reasonable commitment of resources. We hope that the suppliers in
Bangladesh are made much more fully aware of what is available to them in terms of access to low-
cost capital to improve their factories. While sustainable infrastructure, such as fire-safe buildings can
be constructed in the short to medium term, a culture of safety will take longer to take root, and we
expect heavier involvement by the brands in requesting legal action against violators as well as
greater involvement by the Bangladeshi government and local NGOs in monitoring industrial relations
practices.  A factory classification system and a selective export licensing system would also be
helpful in this regard.

Since the plan relies on domestic labor representatives for its success, we would also like to urge the
government of Bangladesh to ensure that labor unions in Bangladesh are truly representing workers
rights and not political agendas of any party.

It is also our hope that the Alliance’s efforts will complement and leverage the efforts of their European
counterparts to build the necessary capacity in Bangladesh in order to make it a sustainable sourcing
destination. The Industri-All Accord which over 70 retailers have signed, for example, mandates
inspections within the next nine months, with repairs initiated where necessary and a process place to
allow companies or workers to report problems with buildings. The Alliance plans to complete
inspections of factories within a year. We hope these parallel processes are well coordinate with
minimal duplication and wastage of resources, as many factories in Bangladesh take orders from
both North American and EU retailers.

Finally, we would like to thank the Alliance again for staying engaged on this issue and moving the ball
forward on global corporate citizenship. As a member of the US civil society representing Bangladeshi
Americans, we would also like to be helpful in any respect in facilitating the success of this Initiative.

U.S. Bangladesh Advisory Council