Bangladesh Fails To Regain GSP – Improvements Not Enough

On Friday 16 January 2015, the United States Trade Representative (USTR) declared that although they acknowledge Bangladesh’s efforts towards improvement in fire and building safety, much is yet to be done with  regards to worker safety, freedom of association, safety of labor right activists and other points which are included in the 16 conditions (listed below) which the USTR demanded to be fulfilled by the Bangladesh Government in order to restore the General System of Preference (GSP).

The inspections carried out by the Accord and Alliance were mainly responsible for the the closure of at least 28 factories, the partial closure of 17 factories, and the identification of needed remedial measures in many more. Apart from the nearly 1700 factories inspected by the Accord and the Alliance, 380 factories have been inspected by the Bangladesh University of Engineering and Technology (BUET) as a part of the Government commitment to inspect the remaining factories outside the list of the Accord and the Alliance.

Inspection Status of Accord, Alliance and BUET, as of 15 September 2014. Department of Inspections for Factories and Establishments, Bangladesh.

Inspection Status of Accord, Alliance and BUET, as of 15 September 2014. Department of Inspections for Factories and Establishments, Bangladesh.

According to the Department of Inspections for Factories and Establishments, a total 65 factories were referred to Review Panel. Out of 65 factories 29 factories located in 12 buildings were closed, 17 factories located in 10 buildings were partially closed and 19 factories located in 12 buildings were allowed to operate [1].

Review Panel of factories, report as of 15 September 2014. Department of Inspections for Factories and Establishments, Bangladesh.

Review Panel of factories, report as of 15 September 2014. Department of Inspections for Factories and Establishments, Bangladesh.

According to the USTR Michael Froman, the government is responsible for the inspection of several hundred more factories and has hired additional inspection teams to carry out and sustain the inspection effort. However, as concerns remain over legal reforms to help freedom of association in Export Processing Zone areas (EPZs), rights of labor activists, labor abuses, and delayed and inefficient construction of an online database of garment workers are among the major reasons which contributed to Bangladesh’s failure to regain the United States GSP.

Congress created the GSP program in the Trade Act of 1974 to help developing countries expand their economies by allowing certain goods to be imported to the United States duty-free. Under the GSP program, 127 beneficiary developing countries are eligible to export up to 5,000 types of products to the United States duty-free. In 2012, the total value of imports that entered the United States duty-free under GSP was $19.9 billion, including $34.7 million from Bangladesh. Top GSP imports from Bangladesh in 2012 included tobacco, sports equipment, porcelain china, and plastic products. The United States will continue to accept imports from Bangladesh following this decision; however, none will be eligible for duty-free treatment under GSP while Bangladesh’s benefits remain suspended [2]. In fiscal 2013-14, Bangladesh exported goods worth more than $5.58 billion to the US, with 95 percent of them being garment products which are traditionally out of the GSP items, and which were subjected to 15.61 percent duty.

As it may very well be deduced that the Bangladesh economy does not get significantly hurt by the removal of the GSP facility by the United States in a direct way, it still fears a negative trend which could take out the all important European GSP where Bangladesh earns most of its benefits from and essentially where garment is included.

The negative impact of the US GSP removal is speculated to be a warning for future trade between Bangladesh and the United States, including the prospect of retaining the Most Favored Nation (MFN) status which benefits Bangladesh’s economic growth. According to the Bangladesh Economic Review (2014), during the last three years there was no Foreign Direct Investment (FDI) inflow from the United States to Bangladesh. In such circumstances, the repeated attempts of the Bangladeshi Government to regain the US GSP is crucial for the nation’s continued economic growth.

Meeting the 16 point conditions to regain the GSP is critical and are outlined in the action plan for restoration of GSP given by the USTR to Bangladesh; the 16 point conditions are as follows:

BANGLADESH ACTION PLAN 2013 [3]

The United States Government encourages the Government of Bangladesh (GOB) to take significant actions to provide a basis for reinstating Bangladesh’s Generalized System of Preferences (GSP) benefits, including by implementing commitments under the “National Tripartite Plan of Action on Fire Safety and Structural Integrity” and taking the following actions:

Government Inspections for Labor, Fire and Building Standards 

  • Develop, in consultation with the International Labor Organization (ILO), and implement in line with already agreed targets, a plan to increase the number of government labor, fire and building inspectors, improve their training, establish clear procedures for independent and credible inspections, and expand the resources at their disposal to conduct effective inspections in the readymade garment (RMG), knitwear, and shrimp sectors, including within Export Processing Zones (EPZs).
  • Increase fines and other sanctions, including loss of import and export licenses, applied for failure to comply with labor, fire, or building standards to levels sufficient to deter future violations.
  • Develop, in consultation with the ILO, and implement in line with already agreed targets, a plan to assess the structural building and fire safety of all active RMG/knitwear factories and initiate remedial actions, close or relocate inadequate factories, where appropriate.
  • Create a publicly accessible database/matrix of all RMG/knitwear factories as a platform for reporting labor, fire, and building inspections, including information on the factories and locations, violations identified, fines and sanctions administered, factories closed or relocated, violations remediated, and the names of the lead inspectors.
  • Establish directly or in consultation with civil society an effective complaint mechanism, including a hotline, for workers to confidentially and anonymously report fire, building safety, and worker rights violations.

Ready Made Garments (RMG)/Knitwear Sector 

  • Enact and implement, in consultation with the ILO, labor law reforms to address key concerns related to freedom of association and collective bargaining.
  • Continue to expeditiously register unions that present applications that meet administrative requirements, and ensure protection of unions and their members from anti-union discrimination and reprisal.
  • Publicly report information on the status and final outcomes of individual union registration applications, including the time taken to process the applications and the basis for denial if relevant, and information on collective bargaining agreements concluded.
  • Register non-governmental labor organizations that meet administrative requirements, including the Bangladesh Center for Worker Solidarity (BCWS) and Social Activities for the Environment (SAFE). Drop or expeditiously resolve pending criminal charges against labor activists to ensure workers and their supporters do not face harassment or intimidation. Advance a transparent investigation into the murder of Aminul Islam and report on the findings of this investigation.
  • Publicly report on the database/matrix identified above on anti-union discrimination or other unfair labor practice complaints received and labor inspections completed, including information on factories and locations, status of investigations, violations identified, fines and sanctions levied, remediation of violations, and the names of the lead inspectors.
  • Develop and implement mechanisms, including a training program for industrial police officers who oversee the RMG sector on workers’ freedom of association and assembly, in coordination with the ILO, to prevent harassment, intimidation and violence against labor activists and unions.

Export Processing Zones (EPZ) 

  • Repeal or commit to a timeline for expeditiously bringing the EPZ law into conformity with international standards so that workers within EPZ factories enjoy the same freedom of association and collective bargaining rights as other workers in the country. Create a government-working group and begin the repeal or overhaul of the EPZ law, in coordination with the ILO.
  • Issue regulations that, until the EPZ law has been repealed or overhauled, will ensure the protection of EPZ workers’ freedom of association, including by prohibiting “blacklisting” and other forms of exclusion from the zones for labor activities.
  • Issue regulations that, until the EPZ law is repealed or overhauled, will ensure transparency in the enforcement of the existing EPZ law and that require the same inspection standards and procedures as in the rest of the RMG sector.

Shrimp Processing Sector 

  • Actively support ILO and other worker-employer initiatives in the shrimp sector, such as the March 2013 Memorandum of Agreement, to ensure the strengthening of freedom of association, including addressing anti-union discrimination and unfair labor practices.
  • Publicly report on anti-union discrimination or other unfair labor practice complaints received and labor inspections completed, including information on factories and locations, status of investigations, violations identified, fines and sanctions levied, remediation of violations, and the names of the lead inspectors.

RISE Society.

—————–

[1] http://database.dife.gov.bd/

[2] http://www.ustr.gov/about-us/press-office/press-releases/2013/june/michael-froman-gsp-bangladesh

[3] http://www.ustr.gov/about-us/press-office/press-releases/2013/july/usg-statement-labor-rights-factory-safety

Advertisements
Tagged with: , , , , , , , , , , , ,
Posted in Garment Worker Issues

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Contribute To RISE

Enter your email address to follow RISE Society and receive notifications of new posts by email.

Join 1,681 other followers

Article History
%d bloggers like this: