Labour Law 2013: Will it satisfy the US?

Labour Law 2013:  Will it satisfy the US?

Labour Law 2013: Will it satisfy the US? By Barrister Harun ur Rashid Former Bangladesh Ambassador to the UN, Geneva On 27th June, US President Barack Obama said, “I have determined that it is appropriate to suspend (GSP facility for) Bangladesh because it’s not taking steps to offer internationally-recognised rights to workers in the country.” Although under GSP Bangladesh exports stood on $35 million dollars only in 2012, it affects nearly other 5,000 products which Bangladesh can export to the US without duties, such as golf equipment, plastic bags, bone china, porcelain kitchenware, headgears, spectacles and tents. The important aspects of the suspension of GSP are two of the following: · The US suspension may lead to the suspension of GSP by European Union from where Bangladesh ready made garment industries earned $12.56 billion dollars due to duty-free and quota-free access to the EU in 2012-13 · Bangladesh’s image has been tainted to the outside world for not protecting the safety and working conditions of workers. After the suspension, US ambassador Dan Mozena reportedly mentioned that the suspension would be withdrawn if the labour environment improved. “Bangladesh has to show that incidents like Rana Plaza and Tazrin Fashions would never happen again,” EU Trade Commissioner Karel de Gucht told reporters “What happened in Bangladesh just over two months ago is simply unacceptable. It is our duty to change this situation and quickly,” “I want to make it clear that Bangladesh … cannot take for granted the trade preferences it currently enjoys,” he said, pointing out that clothing makes up 90 percent of the country’s exports to the EU, and account for some 2.5 million jobs. It signals warnings that EU trade benefits might suffer if Bangladesh did not make enough progress on rights of workers. On 8th July in Geneva, at a meeting with the EU Trade Commissioner in the presence of the Director General of International Labour Organisation Guy Ryder, Bangladesh Foreign Minister Dipu Moni assured that her government was to improve workers’ rights and factory safety The Foreign Minister told reporters in Geneva that the Bangladeshi government would aim to ensure that Bangladesh was the home to a garment industry, “where our workers’ rights are upheld, where they work in a secure and safe environment, with decent work conditions, with proper wages”. Her comments came after her government agreed to an EU-proposed “sustainability compact” to improve labour rights and factory safety, committing to uphold union rights and to add 200 more inspectors by the end of the year, bringing the national total to 800. On 15th July, Bangladesh law makers passed a new Labour law amending the Labour Act of 2006 to satisfy the international community including the US and European Union that the government is determined to look after the workers of garment industries. New Labour Law: Positive for workers: It allows to five trade unions in each factory, owners cannot interfere in how trade unions will be formed, if 20% of workers are women there should be a woman union leader in the factory, owners cannot change factory layout plan without the permission of factory inspectors and no exit can be locked. Labor leaders have said that taking power out of factory owners’ hands to approve unions represents a step forward. Furthermore the owners have to introduce an insurance scheme if a factory employs at least 10 workers. To improve the living standards of workers, the government, the buyers and owners will have to form a “central fund” for the beneficiaries of workers. If a worker dies after two years in service, the management of the factory will pay compensation equivalent to his/her one month salary. If a worker dies in an accident during service, his relative will get a compensation equivalent to 45 days’ salary. If an owner sacks a worker who has served the company more than a year, he/she will get 15 days’ salary for every year of service. But if the worker is sacked for misconduct, he/she will not be entitled to any compensation. Theft, embezzlement, vandalism, arson, and disruptive behavior will be considered as misconduct under the law. Views of Critics: The law requires a company to deposit 5% of its annual profit in provident and welfare funds, although fully export-oriented factories have been exempted. “The exemption means that garment factories, which are mostly export-oriented, won’t have to contribute 5% of their profits,” said one labour expert. Labor activists were also critical of a provision that says a worker wouldn’t be entitled to severance pay if he or she is involved in theft, embezzlement, vandalism, arson, disruptive behavior or misconduct. The new set of amendments “doesn’t say what constitutes misconduct,” said Babul Akter, president of the Bangladesh Garment and Industrial Workers Federation. “Is it misconduct if a worker raises her voice against abuse by a line manager?” “Although union members no longer have to be vetted by owners, the directorate of labor still has wide discretionary powers. In practice that means owners may be able to block unions.”” said Abul Kalam Muhammad Nasim, senior legal counsel at the American Center for International Labor Solidarity in Dhaka According to the HRW (Human Rights Watch) report, Bangladesh has ratified most of the core International Labour Organization labour standards, including Convention No. 87 on freedom of association and Convention No. 98 on the right to organise and bargain collectively. However, important sections of the Labour Act still do not meet those standards, it claimed. It said that Unions will be allowed to select their leaders only from workers at the establishment and this will enable employers to force out union leaders by firing them for an ostensibly non-union-related reason, a common practice globally, HRW said. Discriminatory anti-strike provisions in the law favour foreign investors by prohibiting strikes in any establishment during the first three years of operation if it is “owned by foreigners or is established in collaboration with foreigners,” the HRW mentioned. The revised Labour Act could also have a major negative impact on unions by expanding government control over unions’ access to foreign funding, HRW claimed The law would require prior approval from the labour and employment ministry before either trade unions or employer organisations could receive “technical, technological, health & safety and financial support” from international sources, it said. Reactions of the amended law: On 22nd July, International Labour Oganisation issued a statement stating that the amended Labour law had fallen short of international standards by not addressing some of its specific concerns. Meanwhile the Obama administration on 19th July made it public a series of steps for Bangladesh to adopt to get back

GSP. The steps as reported are: (a) fast track registration of unions, (b) increase the number of government inspectors, (c) more fines for failure to comply with factory standards, (d) assess buildings and fire safety of all apparel units, (e) Close or relocate “inadequate” factories, (f) drop or resolve criminal charges against labour activists,(g) a hotline for workers to anonymously report fire, building safety and rights violations, (h), report on data base on anti-union discrimination, (i) repeal EPZ law or bring it to international standards and (j)develop mechanism to prevent harassment and violence against labour activists. On 24th July US Ambassador Dan Mozena met three Secretaries, Foreign Secretary, Commerce Secretary and Labour Secretary and reportedly said that : “ We discussed about the sustainability compact adopted on 8th July in Geneva in which the US is associated. We went through each point…and assessed about the steps needed additionally and who to take those steps.” It is reported that the US will review the GSP in December and the final test of the law lies in the fact as to whether the US is satisfied with the new law so as to enable it to restore the GSP for Bangladesh. The review will have an impact on European Union. It seems that further amendments of the Labour law would be required. Until then we may wait.

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