Remembering Rana Plaza: The road ahead

Remarks by ILO Deputy Director General for Policy, Sandra Polaski, at a multi-stakeholder event at the European Parliament in Brussels on 22 April 2015.

Statement | 22 April 2015
The dramatic collapse of the Rana Plaza building two years ago and factory fires in Pakistan and Bangladesh in the latter half of 2012 took the lives of over 1500 people and reminded the global public—and all of us—that conditions in global supply chains are sometimes simply unacceptable.

And the number of workers involved are large. In garment supply chains alone, over 35 million workers produced apparel for export in 2012. Of these, 80% are female, many of whom have migrated from rural areas and are entering the formal workforce for the first time.

Not all of them work in sub-standard or “sweatshop” conditions, to be sure. Some earn decent pay and enjoy coverage of social benefit programs and sometimes even union representation. However far too many work very long hours, at extremely low wages in factories that do not follow national labour and safety laws—if such laws even exist in their countries.

European consumers and policy leaders continue to express their concerns about this issue. The Rana Plaza collapse in particular, prompted governments, brands and retailers, employers, trade unions and civil society to pay attention, as dramatic images of horrific but preventable death, injury and suffering were beamed to television and computer screens around the world.

Many commitments were made—by many parties—to achieve fundamental changes in global garment supply chains and in the Bangladesh garment industry in particular.

So where do we stand today, two years later?

Progress to date

There is good news and not so good news to report.

Let me begin with Bangladesh and then address the question of labour rights in supply chains more broadly.

First, with regard to factory safety in Bangladesh, good progress has been made in inspecting garment factories for structural, fire and electrical safety. About 75 percent of garment factories nationwide have been inspected. The largest share of the inspections have been conducted by the Accord, followed by the Alliance.

Inspecting the remaining 25% of factories is a high priority but there are problems with information and non-cooperation, in addition to the civil disturbances recently.

Moving forward, emphasis now needs to be placed on remediation of RMG factories – fixing the faults that were identified during inspections. Many of the factories covered by the Accord and Alliance are undertaking remediation efforts, but others need to be pressed to do the same.

With respect to other workers’ rights, including organizing and collective bargaining, the Government of Bangladesh amended the Bangladesh Labour Act on 15 July 2013, introducing new safety measures and making it easier to form trade unions. However further legislative changes are necessary to protect these rights in practice and to bring Bangladeshi labour law into line with fundamental international labour standards. And workers in Export Processing Zones, who are currently excluded from the coverage, should have equal rights to those in the rest of the country.

Most significantly, in terms of all the legislative reforms that were made in July 2013, is that the rules and regulations that are needed to translate the legal changes into practical results have been stalled for over a year and a half. Many changes made to the law—including the provisions relating to work place safety—still remain only on paper in the absence of these rules.

Major areas of work such as the formation of Occupational Safety and Health Committees, enterprise participation committees, effective functioning of the newly recruited labour inspectors as well as the launch of the Better Work program in Bangladesh cannot be implemented because these rules have not been finalized.

The absence of Rules compromises efforts to strengthen law enforcement and compliance with OSH and labour law, as well as the central role that employers and workers must play in achieving these goals. The absence of Rules also has a negative impact on the exercise of freedom of association, given continuing restrictions on the right to organise, the dismissal of trade union activists and the obstacles to trade union action.

This ongoing delay jeopardizes the momentum that has been built.

One area of work that has seen momentum and yet suffers from the lack of rules is the strengthening of labour, fire and building inspection. On the positive side, 178 new labour inspectors have been hired to increase the capacity to 270 inspectors. ILO is helping the Government build the capacity of the labour inspectorate. The fire service has appointed an additional 210 fire inspectors. However the capacity of the building regulatory authorities is still lagging.

Turning to the question of compensation for the Rana Plaza victims, as you know a fund was set up to receive voluntary contributions from buyers. Compensation to the victims was calculated using methods that are consistent with ILO Convention 121 Employment Injury Benefits (1964). Based on this, the amount currently estimated for compensation of all Rana Plaza beneficiaries is US$30 million. To date, about $23 million has been contributed and of that 70% has been released to claimants. More funds are urgently needed to ensure that all victims are fully and fairly compensated. The ILO urges the Government of Bangladesh, international brands and the national stakeholders to fill this gap as a matter of urgency.

Going forward, Bangladesh needs to create a national Employment Injury Insurance scheme so that future victims do not have to depend on ad hoc efforts. The Government has expressed interest and ILO is prepared to work with the government to establish a national scheme which provides protection for workers based on ILO Convention 121.

The Accord

As you know, immediately after the Rana Plaz disaster, the Global Trade Unions IndustriALL and UNIGLOBAL as well as 40 global garment buyers asked the ILO to support them in negotiating an agreement that became known as the Bangladesh ACCORD. Today it has grown to have 190 companies as members.

While ILO is not a party to this agreement the Office acts as the neutral and independent chair of the Accord’s Steering Committee. In Dhaka, ILO also provides coordination across the sector for all the significant initiatives working to improve factory safety, including the Accord and the Alliance, as well as efforts of the Government through the Bangladesh University for Engineering and Technology (BUET ).

Throughout 2013 and 2014 the Accord conducted the heavy lift of inspecting all factories working for buyers in that programme. The speed of this work was crucial to minimizing safety risks. The Accord has provided a credible inspection regime for about half the exporting factories in the sector, the costs of which have been born by all the firms in the scheme.

Now the Accord is working to ensure that suppliers implement the improvements that are needed on structures, fire and wiring safety. The additional resources for this purpose that the Accord, and also the Alliance, have leveraged from the private sector are significant. The Accord is now also piloting approaches to building the capacity of Occupational Safety and Health Committees.

The Accord is a remarkable example of how lead firms in the supply chain and international trade unions can collaborate to improve safety and respect for workers rights.

Going forwards ILO hopes that the Accord—and also the Alliance—will be successful in their aim of building strong OSH Committees and management compliance systems in their supplier factories. As the tragedies of the past have shown, workers must be aware of safety risks and empowered to act upon them.

ILO will continue to work closely with the Accord to ensure approaches are consistent with international standards and that common approaches are being applied by the Accord, the Alliance and hopefully across the sector.

Strategic lessons

We have learned some critical strategic lessons from these experiences in Bangladesh, but also from other countries where ILO implements programs to improve conditions in global supply chains.

Let me start with the most basic. Low income households in countries like Bangladesh and other developing countries desperately need jobs and incomes. Economic growth in developing countries typically includes a transition from agriculture to manufacturing, and garment is frequently the first manufacturing industry to emerge in developing countries.

So one key question is: can the garment industry be a pathway from poverty for millions and deliver decent jobs to workers faced with few alternatives?

The decent work deficits in the garment sector are real and widespread. Wages in the industry are often low and evidence suggests that they are stagnating in many producer countries.

And yet, it does not have to be this way. In garment sectors in countries where the ILO has been able to implement the Better Work program and find political will in governments, employers and workers, real progress has been seen in addressing significant decent work defiicts. For example, in Cambodia, wages have finally begun to improve significantly, with a minimum wage in the sector that is roughly twice that in Bangladesh. Women garment workers there earn as much as 35% more than they could earn in alternative available jobs.

Many studies show that an increase in labour earnings is one of the most important ways to reduce extreme poverty. But these increases are not automatic—they require decisions by governments, employers and increasingly can be influenced by global publics, trade unions, buyers and brands.

Beyond wages, we have seen that it is possible to improve working conditions, occupational safety and health, the working environment, respect and protection from sexual or other harassment. We have seen and documented real progress achieved on some or all of these issues through Better Work programs in Vietnam, Jordan, Indonesia, Nicaragua, Haiti and elsewhere.

And we have acumulating, hard data that shows that this is a win-win situation for workers and factories’ bottom lines. From a business perspective, research has found that higher compliance with relevant labour laws and internation labour standards positively affects workers’ productivity and that factory profitability is higher when wages are higher, when workers feel physically safe and are assured wage payments, when they are not verbally abused and when there is a relationship of trust between employers and workers.

Stakeholders off the factory floor can also exert pressure to extend these improvements to more workers in more countries in more supply chains:
  • Buyers can establish long-term business relationships with suppliers that encourage and reward factories for compliance with labour standards. And they need to pay prices that allow adequate wages to be paid to the workers.
  • Governments can have significant impact through their bilateral and plurilateral relationships with other governments and with their own lead firms in encouraging and insisting on progress on fundamental rights and decent pay in global supply chains.
  • External pressure from consumer groups can result in higher wages and improved conditions.
In conclusion, real progress has been made in parts of the garment supply chain, and some progress has made in Bangladesh. But there is still a long road ahead.

Fulfilment of the commitments made by the Government of Bangladesh, by th ready made garment industry in that country, as well as supporting effots by the EU, other friends of Bangladesh, brands and retailers and th international community is critical. There are urgent roles for all of us.

Thank you.