Emerging Bangladesh 6th issue by BGCCI Bangladesh German Chamber of Commerce & Industry

The Business Magazine of the Bangladesh German Chamber of Commerce & Industry (BGCCI)

Emerging Bangladesh April-June 2014

www.bgcci.com

Accord & Alliance “It’s time to change the mindset.”

-Sakhawat Abu Khair President, BGCCI

Fire Safety

Electrical Safety

Building Safety

Interviews with Rob Wayss, Accord Srinivas Reddy, ILO Md. Atiqul Islam, BGMEA Roy Ramesh Chandra, IndustriALL Bangladesh Heather Cruden, Canadian High Commissioner

Exclusive Interview

Willam Hanna EU Ambassador

Mesbah Rabin, Alliance Bernardo Cruza, BSCI Steering Committee Dr. Ishtiaque Ahmed, BUET Sultan Uddin Ahmed, BILS Alonzo Suson, Solidarity Center (AFL-CIO)

CONTENTS P. 40

P. 28

P. 20

P. 34

Cover Focus: Accord & Alliance P. 19 Rob Wayss, Executive Director, Bangladesh Accord on Fair and Building Safety Mesbah Rabin, Managing Director, Bangladesh Accord on Fair and Building Safety H.E. Heather Cruden, High Commissioner of Canada to Bangladesh Md. Atiqul Islam, President, BGMEA Srinivas Reddy, Country Director, ILO Bangladesh Md. Shahidullah Azim, Vice President BGMEA Dr. Ishtiaque Ahmed, Professor, BUET Alonzo Glenn Suson, Country Director, Solidarity Center (AFL-CIO) Roy Ramesh Chandra, Secretary General, IndustriALL Bangladesh Council Sultan Uddin Ahmmed, Assistant Executive Director, Bangladesh Institute of Labour Studies Bernardo Cruza, Chair of BSCI Steering Committee

Opening Remark P. 4 BGCCI Events P. 6 Exclusive interview: H.E. William Hanna, EU Ambassador P. 10 In retrospect: An interview of former German Ambassador H.E. Dr. Albrecht Conze P. 16 Features P. 64 Why Bangladesh needs its own unique approach to factory safety Safety First, At Any Cost Financial Woes: Too High to Share? Emerging Bangladesh Volume 2 Issue 2

Bangladesh German Chamber of Commerce &

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Tawhidur Rashid

April-June 2014 The business magazine of the Bangladesh German

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FROM THE EDITOR

“Change the mindset” Dear BGCCI members and readers, The RMG industry in Bangladesh has achieved many a milestone over the years. However, there are many challenges that still lie ahead. In the 90s, the industry focused on the elimination of child labor; this was followed by social compliance and audits. Now we are talking about building, fire and electrical safety and the establishment of trade unions. In future, environmental responsibility is expected to take center stage. This issue of “Emerging Bangladesh” should give you an insight about the work in the area of building, fire and electric safety. A new chapter of transparency, trust and problem-solving needs to be opened. Workers, unions, brands and factory owners should engage in dialogues for communicating positively. Clear goals, ownership and financial commitments need to be defined and agreed on in order to be successful. It might be easy to do the inspections; but it will not be easy to communicate the results to the workers, and make sure that remediation efforts by the factory owners are done properly. Changing bricks sounds easy but changing mindsets is challenging. The biggest task will be to ensure the safety in the factory and maintaining the standards through top and middle management over time. All stakeholders should understand that practicing corporate social responsibility helps economically, ecologically and socially in the long run. Also from the buyers' side it needs to be understood that price cannot be the only decisive factor and the buying and the compliance department need to act hand in hand. It took us over 100 years in Europe to establish a proper labor industrial relations dialogue. Here in Bangladesh, it's high time all stakeholders understand their roles, responsibilities and duties to stay competitive in the future. This issue should give our readers a neutral perspective of the challenges all the stakeholders are facing. As the biggest bilateral business chamber we would like to offer our mediation and communication skill since we established trust amongst all stakeholders to support the RMG sector. We extend our heartfelt thanks to all stakeholders to make Bangladesh a safe hub of high-quality RMG products. Finally, I would like to thank H.E. William Hanna, the European Union (EU) Ambassador in Bangladesh for his commitment to foster trade between Bangladesh and EU with outstanding trade figures. From BGCCI, we wish him a very warm farewell and thank him for his great cooperation with us.

As the biggest bilateral business chamber we would like to offer our mediation and communication skill since we established trust amongst all stakeholders to support the RMG sector.

Daniel Seidl Executive Director, BGCCI {Emerging Bangladesh} bgcci.com

OPENING REMARKS

Let's Fix It On the wake of inspections being done by Accord, Alliance and National Tripartite Plan of Action (NTPA), Sakhawat Abu Khair Khair, President of BGCCI briefs about his observations and suggestions and why it is important to change the mindsets of businessmen to fix the burgeoning problems in our RMG sector.

A wage earner's death is a great loss to his or her family. However, at the same time it raises fingers against the safety and compliance issues of the factory, which spells loss of the factory or the brand s/he was treading sweat for. In 2013, we have seen two such tragic incidents, which smeared ink on the image of our country, thanks to the negligence and myopic vision about the sector. Simply put, both of these man-made disasters could have been avoided. Why did we fail to do so? I believe, what our RMG sector was missing is a norm in everything-productions, marketing, workers and building safety, compensation, you name it! Though delayed, but these inspections were imperative to establish that norm in every sphere of the sector. This will set us on a platform, standing where we can claim about our efforts and achievements: the rectification measures will help us build a better image of the country as the second largest apparel exporter in the world after China. Accord, Alliance and NTPA are evaluating the building, fire and electrical codes of the factories. These three elements are usually not scrutinized by general auditors. However, most of the buildings where old factories are housed were built before 2006, the year our National Building Code was formulated. This does not necessarily mean that those buildings would not comply with the codes but of course, many of them may have plenty of minor structural errors to fix. In addition, various documents like soil test results, designs/drawings, compliance reports etc. were not properly archived, which are necessary to make a proper call about the fate of the buildings. Nevertheless, factories, which were built 15-20 years ago, should not be deemed structurally poor in general, as they were built according to then-building code. They must be made safe through load management. Many owners added new floors onto the existing ones. We cannot shut them down, nor should we burden them with overweight. The same thing happened with electrical codes, where norms were not followed, i.e no earthing measures to counter voltage fluctuations; no machines bolted to buildings, etc. Lag of wires- which were supposed to be covered in concrete trays as bridges, so that short circuits may not occur-can be found in many factories. Things like these are of course, serious violation of rules and both Tazreen Fashions and Rana Plaza showed us where such delinquency could lead to. At present, a lot has been said about the compensation of remediation in factories. We have to consider two things here. 04

It's only normal that factories found unsafe for workers would be closed down temporarily or permanently. The question is can the owner bear the whole expense. There is no denial of the fact that to transform those factories into safe ones, we need the help from buyers. The buyers cannot blame owners on pocketing the entire profits so far, as they have also been responsible for giving consignments to factories, which were not complaint. Therefore, they must play a part in this. They can directly provide cash incentives and/or instead of walking out and placing the order somewhere else, they can commit to be with them through out the troubleshooting phase. Besides, we have to understand that BGMEA cannot help financially, but they can act as a leader and bring financial help from banks and NGOs; they can convince the buyers to participate in the payment of compensation. Factory owners on the other hand need to be more active. They can even ask for advance from buyers to keep things afloat. I strongly believe with a buoyant banking sector like ours, under the guidance of the Central Bank, local banks should come forward to offer loans with single digit interest rate. The government can impose singledigit bank loan interests, as they did in the agro-sector. It may not be adequate, but it would greatly help in the long run. The government can give incentives to encourage more banks to follow. A sector that provides 13% of the GDP cannot function perfectly on its own; it needs a vision, a roadmap to implement that vision and the interest of all stakeholders to work sincerely for the betterment of the sector. We must not forget that for RMG, the whole nation is the stakeholder. I believe the factories of today will learn all necessary lessons and so will those of tomorrow. Even if we consider safety practices to be buyers' priority, for our own sustainable growth, we must ensure ethical practices. We must make clothes that are clean and not drenched in the blood of our workers! Another good thing that is happening is the increase of trade union formation around the country. This is something that has long been feared about, thanks to the bitter pill that we had to swallow in the jute sector. Henceforth, both owners and workers have a lot to learn in this field. Making the workers aware of both rights and responsibilities, we can ensure their freedom of association and collective bargaining. Trade bodies too have their roles to play by encouraging factories to maintain their database of workers' information. As I have said time and again, there is no alternative to good governance; it's time we take it seriously for our RMG sector. It's time we set the norm and stick to it!

{Emerging Bangladesh} April - June 2014

{Emerging Bangladesh} bgcci.com

BGCCI EVENTS

BGCCI organized Business Networking Lunch for Energypac-MTU BGCCI, along with Gold Partner Energypac, the sales & service partner in Bangladesh of MTU Onsite Energy, organized a Business Networking Lunch at the Westin Hotel for the business community of Bangladesh on April 29, 2014. The seminar shed lights on the present energy situation of the country through a speech from Prof. M Tamim, Professor of Petroleum and Mineral Resources Engineering, BUET and a renowned energy expert in the country. Energypac as one of the leading power engineering company and engineering solution provider of the country exchange views with the business leaders of the country on energy development and improvement issues. Director of Energypac Power Generation Ltd Mr. Rezwanul Kabeer gave the welcome speech. Chief Operating Officer Mr. Rajiur Rahman, presented on

Energypac's business footprint. Mr. Heinz Bruckmann, Director of Sales & Sales Engineering, MTU Onsite Energy (Asia and Pacific) presented on MTU gas power system. The event was participated by the reputed business community of Bangladesh and representatives from both print and electronic media. In the event distinguished representatives from the MTU Asia Pte Ltd. talked about their gas generator which is highly efficient for the textile and other industrial sectors of Bangladesh, specially where the gas pressure is low. They have successfully implemented the usage of the generator in a number of Asian and European countries. They would like to expand their services in an emerging country like Bangladesh, they mentioned. For further information, please contact Aminur Rashid, Head of Marketing, PED, Energypac Power Generation Ltd. at amin.pgd@energypac.com

In the picture ( clockwise from the the left): Mr. Daniel Seidl, Executive Director, BGCCI; Mr. Rezwanul Kabeer, Director, Energypac Power Generation Ltd; Mr. M Tamim, Professor of Petroleum and Mineral Resources Engineering, BUET and a renowned energy expert; Mr. Heinz Bruckmann, Director of Sales & Sales Engineering, MTU Onsite Energy (Asia and Pacific); Mr. Sakhawat Abu Khair, President, BGCCI; Mr. Rajiur Rahman, Chief Operating Officer, Energypac Power Generation Ltd; Mr. Bishwajit Mazumder, Assistant Manager, Sales & Application Gas Power System, MTU Asia Pte Ltd.; Mr. Ng Chin Siong, Steven, Senior Manager, Gas Power Systems, MTU Asia Pte Ltd, a Rolls-Royce Power System Company

{Emerging Bangladesh} April - June 2014

BGCCI EVENTS

BGCCI Bade Farewell to H.E. Dr. Albrecht Conze Bangladesh German Chamber of Commerce and Industries (BGCCI) held a farewell lunch for the German Ambassador to Bangladesh Dr. Albrecht Conze on 26 May. He has taken up a new position at a very short notice. Representatives from 130 BGCCI member companies and distinguished guests from media were present at the event. “Following a proposal by the High Representative of the European Union for Foreign Affairs and Security Policy, Catherine Ashton, the Political and Security Committee (PSC) of the European Council has appointed me as the Head of EUCAP Sahel Mali, the newly established European civilian mission for the stabilization of the Republic of Mali. I am expected to move to Bamako within weeks, and therefore have to leave Bangladesh on the 1st of June”. In these words, Dr Conze explained to the audience the extraordinary circumstances behind his sudden departure from Bangladesh. Conze further added that the new assignment would allow him to contribute to the EU efforts to enhance political stability in the Sahel zone, a critical region for Africa's security. Remembering his tenure in Bangladesh, Ambassador Conze said, “Since August 2012, I have discovered and came to appreciate a nation always on the move. I have learned to

admire your extraordinary energy. I have met wonderful people, I have learned a lot, and I am leaving with happy memories.” Praising the BGCCI as a jewel in the crown of the BangladeshGerman bilateral relations, Ambassador Conze hoped that BGCCI will continue working to bridge the trade gap between Bangladesh and Germany and will help Bangladesh to increase its imports from Germany in the future. The President of BGCCI Shakhawat Abu Khair and Executive Director of BGCCI Daniel Seidl were present at the lunch among many others. Later, a few distinguished members of BGCCI Executive Committee for the year 2014-2015 visited the departing Ambassador H.E. Dr. Conze at his residence and presented him a nice gift. The members expressed their deep gratitude for the direction and cooperation the chamber has received from H.E from time to time. The Ambassador too welcomed them for their wonderful support and dedication to work for the betterment of the chamber and making it the biggest and most active of them all.

In the picture: Former German Ambassador Dr. Conze flanked by BGCCI Executive Committee Members. On his left: M. Nooruddin Chowdhury, DHL Global Forwarding (Bangladesh) Ltd.; Sakhawat Abu Khair, Robintex Group; Farooq Siddiqui, Karben Solar Energy Ltd.; Syed Golam Mowla, Multi Freight Ltd.; Yesmin Ipphat, LW Hair & Skin Beauty Spa Salon; Indranil Lahiri, Siemens Bangladesh Ltd.; Mohammad Ali Khokon, Maksons Spinning Mills Ltd.; Mahbubul Alam, Sarah International; Rashed Maksud Khan, Everest Fine Porcelin Ltd. (former EC Member). On his right: Rafiq Hassan, Northern Tosrifa Group; M. Maksud, Corona International; Daniel Seidl, Executive Director, BGCCI; Magnus Schmid-GIZ Office, Dhaka; Jonathan Reinhard, Digital Factory International Ltd.; Syed Raushan Zaman, S R Zaman Communication.

{Emerging Bangladesh} bgcci.com

BGCCI EVENTS

BGCCI Co-sponsored Three-day ITC Workshop with ITC and EU A three-day workshop was held in Dhaka to create a breakthrough in the export market for small and medium sized businesses of Bangladesh. GIZ has organized this capacity-building workshop on, “Researching and Analysing Export Markets”. The workshop was sponsored by International Trade Centre (ITC), European Union (EU) Bangladesh and the Bangladesh German Chamber of Commerce and Industry (BGCCI). The workshop continued through June 3-5, 2014 at the German House in Gulshan 2, Dhaka. GIZ is implementing the project “Promotion of Social and Environmental Standards in the Industry” (PSES) on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) and is successfully cooperating with ITC during the last few years. The course was aimed to build capacity of small and medium sized organizations that are ready to enter the export market but need targeted technical assistance in business development, to take the next step. It also provides guidance regarding the selection and research of markets and tools to better access finance. The aim was to provide greater knowledge and experience of the market analysis and research process through the application of ITC's web-based tools. In the long run, this

training has the potential to translate into tangible export orders and other related fir m-level economic benefits. The chief guest and the Honourable European Union's Ambassador to Bangladesh, Mr William Hannah was the keynote speaker at the inaugural ceremony of the workshop. He recounted, “The latest data shows that Bangladesh exported to EU worth about 11 billion euro in 2013. This is about 57%

increase over the last three years since 2010. We want this success story to continue. This project will help in that direction.” A varied group of attendees participated in this training from different Bangladeshi organizations, industries, associations, chambers contributing to various sectors like garments, textile, electronics, handicrafts, jute, leather, pharmaceuticals, agribusiness and footwear.

BGCCI Finalized Two Training Modules for Mid-level Managers in RMG BGCCI, on behalf of the Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) GmbH, has conducted a pre-feasibility study, which found that an

unmet need for demand-driven curricula prevails resulting in a lack of skilled human resources in mid-level management in the RMG sector and low participation of women. In order to address these issues, BGCCI started a project named Inclusive RMG Skills Training for Women. Adnan Nafis- Head of Trade Promotion & Consultancy of BGCCI was the Head of the Project. The main objective of the project is to develop detailed and specific curricula for sixmonth diploma courses for mid-level management representatives of the RMG sector and textile industry in compliance with National Technical and Vocational Qualification Framework (NTVQF). As part of the project activities BGCCI prepared report on “Training Needs of Mid-Level Managers of the RMG Industry of Bangladesh” and then developed 5 training curricula for mid-level managers. Finally, In the Picture: With the BGCCI core team behind the formation of curricula, Prof .Md. Abul BGCCI has drafted 2 training modules for midKashem-Chairman-Bangladesh Technical Education Board (BTEB) and Dr. Engr. K.M. level managers.

Alauddin-Curriculum Specialist-Bangladesh Technical Education Board

{Emerging Bangladesh} April - June 2014

EXCLUSIVE INTERVIEW

“ European market is open to all goods from Bangladesh, everything but arms, with no duties and tariffs.” H.E. William Hanna, EU Ambassador shared his views with us about Bangladesh, its impediments to attract more FDI and why democracy is vital for an emerging economy. Interview by Daniel Seidl & Tawhidur Rashid Rashid. Edited Excerpts:

How do you see the achievements of this country? What made them become an achiever?

The hardships of the people of Bangladesh, their hard work, and I'd say the third factor is market access, particularly the European Market. I see these three factors coming together. Our European market is open to all goods from Bangladesh, everything but arms, with no duties and tariffs. When you produce in Bangladesh, when you're in the European market, all you have to do is get the goods there and make your presence felt. So our European companies are sourcing here and it has been a tremendous success. To give you an indication, in the three years since I arrived, exports from Bangladesh to the European markets has gone up by 57%. The first success was the market access which experienced a turning point two years ago, when we changed the rules of origin to allow imported cloth resulting in a huge surge in exports. So that has been a very

big success story. It has created millions in jobs and export earnings. It is one of the success factors of growth in this country. However this success has been built on shaky foundations and that was seen by the Tazreen blaze and the Rana Plaza tragedy. So we had to work together to address the foundations. There was a need for all of us to look very seriously at the question of factory safety, labor rights and corporate social responsibility. After Rana Plaza, our Commissioner Karel De Gucht took a very strong position and said two things. “What happened at Rana Plaza was unacceptable, don't take the European market access for granted,”-a warning that we seriously have to address. We've done that together and for the European Union the key moment was the agreement on the Sustainability Compact on the 8th of July in Geneva last year, where the government, ILO, EU and others were present. The Americans also attended the meeting and the government agreed for commitment in three areas,

{Emerging Bangladesh} April - June 2014

WILLIAM HANNA

Clockwise from the left: H. E. William Hanna i) with Daniel Seidl his EU Dhaka office ii) At the 10-Year celebration event of BGCCI, June 2013 iii) At the GSR Conference, February 2013 iv) ITC workshop, June 2014 v) ITC Workshop, June 2013

{Emerging Bangladesh} bgcci.com

EXCLUSIVE INTERVIEW

â&#x20AC;&#x153; Since then we have been implementing those commitments and following them up pretty closely. One year after the compact signing, I think we can say that a lot has been done from the right direction but we have to continue working together to achieve a lasting reform and sustainability of the RMG sector.â&#x20AC;? 1)Labor laws, to allow freedom of association with collective bargaining in the industry 2) Factory Safety - to ensure, all factories were being inspected 3) Corporate social Responsibility: the corporate sector and the private sector will have to step up and take responsibility. Since then we have been implementing those commitments and following them up pretty closely. One year after the compact signing, I think we can say that a lot has been done from the right direction but we have to continue working together to achieve a lasting reform and sustainability of the RMG sector. We have seen couple of progresses made so far. The labor laws were changed and the establishment of many new trade unions occurred. They still face difficulties but they are being established. I think if we look at the factory inspections, this has been a key issue. The factories are being inspected by the Accord, the Alliance and by the government through assistance from the British, Dutch and Canadian funds. The tests have shown problems which are manageable: it is only a small percentage of the factories which are structurally unsound, only a small number of factories which had to be closed down. Although some workers may have to change workplaces, I think we are very confident they will find jobs quickly within the industry because the industry has a huge demand for skilled workers. There have been a number of standards, and I hope they are being resolved because we really need one set of standards. For me that is a key point as in factories that are being inspected, the owners have to take remedial measures-this is the tipping point. Bottom line is that all the factories in Bangladesh

need to be safe for the workers. You go to the factory in the morning and return in the evening safe. So I think we need to keep up the work together and it is not all over and there is still some reluctance in some quarters to understand how important this reform is.

What will happen after these inspections? It will not happen overnight but change is coming. I think the driving force of change is there. The institutions slowly understand their duties and when more and more factories get approval and are safe and secured, others will realize that's what has to be done. There is still reluctance and change in the way management looks at labor relations. It's a structural change that won't happen immediately, but it is necessary and I think the best thing is the companies will understand and adopt it. What we are talking about here is applying the rules and this is terribly important in Bangladesh. I have seen existing rules being not applied in many sectors and that's one of the biggest problems of this country. You could look at other sectors. For example, testing many foods in a lab funded by EU we have found that many items are adulterated, thanks to lack of inspections. In this connection, I would like to mention about the shrimp sector few years ago. There were problems and we banned the shrimps and people got the message and cleaned up the shrimp industry. We did that to protect our European consumers and I don't see why Bangladeshi consumers should be less protected than the Europeans. I think it is true that by applying standards, we can really help both improve the situation for people and workers in Bangladesh. It can lead to change which is good for everybody and which makes

{Emerging Bangladesh} April - June 2014

WILLIAM HANNA

manufacturing industries in Bangladesh sustainable in the future.

The mindset of Bangladeshi businessmen are changing. First, we came for compliance and social standards; now we talk about fire and building safety. The next one will be trade unions and then we talk about environment this is great but how does the Govt. of Bangladesh take any kind of responsibility in this? Change takes time and I think there is a need to look at the longer consequences. It would not happen overnight. I think we need to work on it and one of the things we want to do in the European Union is to increase the level of dialogue with the Government on other issues which are about governance and human rights. We want to have a dialogue and we don't want to sanction and then walk away. The motive of the Sustainability Compact is staying engaged. Now that requires everybody to work together and I think that's the approach. So we would like to stay engaged with the Government to discuss various other issues. For example the investment climate in this country. There are many areas where that climate could be improved and it requires some rules to be changed and some rules to be applied to make it more attractive for investors to come.

Do you think it is possible?

There needs to be opening up to foreign investment. There is a lot of interest from Europe, but we need to address certain issues. So I am hopeful that in our dialogue with the Government later in the year we will talk on these issues on how we can work together. We all know what they are on and one area for example which is very important to us is the service sector. This is an area where Europe is very strong and if we can bring in companies, it means sharing of a lot of know-how and high quality investment which will assist transfer of technology to take Bangladesh forward.

How do you see countries like China, India, and when you talk about GSP, the US, in this ball game? I think it is interesting to see there are high levels of contacts with Japan and China on various other

investments issues, and that's good for a country. However, for the European Union there are some obstacles, which we want to discuss. I think other countries share the same muse. When we have dialogue with others we come down with certain constraints like infrastructure, corruption, energy the classic bottlenecks that need to be addressed. Bangladesh could do well on its own. It is well situated geographically. It has demographic dividend. There are lots of youths, so it has a lot of advantages in terms of vocation in this region, but it needs to address some of these problems to move faster.

Some say that countries like China and India will keep exploiting Bangladesh and turn it into their sweatshops, as their own garments demand is so big. They also claim that Bangladesh will remain the way as it is now. Do you agree with such claims? I don't know why people have such claims but I think Bangladesh has opportunities for different investors. At the same time, there is a need for developing infrastructure. There are risks associated with investments as well, that's why I think it's very important to have a strategy. I think what we would like to see is a long term strategy. Our biggest assistance from the European Union is giving the opportunity to the RMG sector, but you know it is not just open for RMG sector; it is for many other sectors. And there are other sectors besides the leather industry. Which are full of opportunities. I think our member states Germany is one but the Nordic countries, Britain, Netherlands, Spain - are all keen to see future opportunities here.

You have been travelling all over the world working. What will come next after RMG? Besides leather, what will be the next industry coming up? I know that some of our European companies are looking at this country in the longer term. They want to be present here seeing the longer-term advantages. They may not be investing money at this stage because of the difficulties of investing in the climate change. I think they'll be in future. They do not want to miss the opportunities. They are just cautious. As of industry practices, green

{Emerging Bangladesh} bgcci.com

EXCLUSIVE INTERVIEW

“ The EU is an organization which exists through seeing the bigger picture, seeing the need for unity, for dialogue, all within Europe and the world. We have to keep our faith and work together as in today's world countries need to work together.” technology is the future.

As we call ourselves a European German chamber we see a lot of trade delegations simply don't come to Bangladesh, because the Government of Bangladesh has not been considered to be more democratic. What's your take on that? I think we made our position clear back in December and January about what happened in the elections. We don't want to engage in boycotting, we want to keep engaged. What we need to do is to try and find ways to understanding that. For investments to come, the country should also think about improving the climate by ensuring issues like security and governance. It's much easier to sell a country where democracy is in place; there is a check and balance; rule of law has to be there and if difficulties arise, those have to be addressed. We have to understand that investors for whom time is money, are also looking forward to other destinations like Sri Lanka, Vietnam and Cambodia. Bangladesh is competing with these countries. Henceforth, in Bangladesh, we have to look at obstacles objectively and try to solve the problems. We cannot just force investors to come here and risk their money.

I feel there is a paradigm shift coming up that there is more trade and aid cooperation taking place. The private sector is working more with the development sector, which is new to me. How do you see this change?

I found it to be the most challenging job I ever had. I've served as Ambassador in Africa and North America and now in Asia. We have been living in interesting times. I'd say never a dull moment in this country. You see all the advantages; all the potential in this country. Then you also see the constraints so sometimes it can be frustrating and I'm disappointed about the democratic situation. However, in the long term the country's potential is so great that the country will be able to overcome these difficulties. The EU is an organization which exists through seeing the bigger picture, seeing the need for unity, for dialogue, all within Europe and the world. We have to keep our faith and work together as in today's world countries need to work together. They need to find ways forward. They cannot be fighting each other all the time. It is easier to persuade people to vote for a simple message, which says, “the problems are all the others”. It is much tougher to explain that working together will produce these results, and perhaps we need to work on our internal communication. It is difficult all over Europe because some countries are seeing it and others are seen to be moving away from it. In Bangladesh, with all due respect, I sometimes have a feeling that on purpose they don't want to give incentives to attract foreign direct investments. They on purpose want to close the market, because they think if they open up, expats will overrule them like they have always been overruled. I think there is perhaps an ideological reluctance. People think that will lead to exploitation. My feeling is the exploitation that I see here is not so much coming from outside; it is something, which has to be addressed inside; so it is again the same phenomena in Europe. It is easier to play the blame game, which is common in everywhere else around the world. It is easier to say those people outside are going to exploit you.

What's important is that our different instruments should work in a coherent fashion. We have been discussing this within the European Union with the different countries to try out their luck here. We can use development cooperation to help with the RMG, safety, and health, that's reasonable in a coherent approach. However, it is also important that we can help identify areas where the country could diversify. I see trade, investment and corporations as different ways through which we can achieve the objectives of cooperating with the country. If the country grows and becomes richer, that interests our companies to explore and try out there luck here.

Where will you go next?

It would be nice if the Government of Bangladesh had the same approach and understood the bigger picture. How did you find your last years in Bangladesh?

Ghana, and I’m looking forward to it. Ghana has so far a stable democracy and alternation of accepting that the opposition gets its term to govern. Therefore, that is the whole thing about democracy. I hope I get there and stay stable amidst all the problems.

{Emerging Bangladesh} April - June 2014

IN RETROSPECT

“Bangladesh must sell clean clothes, not dirty ones.” German ambassador shares his parting advice with Md. Fazlur Rahman of The Daily Star

he country will have to focus on quality and not quantity if it wants to become an emerging economic power, said German Ambassador Albrecht Conze. The outgoing German ambassador spoke to The Daily Star at a farewell lunch organized in his honor by Bangladesh German Chamber of Commerce and Industry at the Westin in Dhaka. “Bangladesh has enormous capacity to react for the better. If you continue in the vein, you will jump on quality. That will be your cutting edge because you still have affordable wages.” Conze spoke at lengths about the twin disasters of Rana Plaza and Tazreen fire and the lessons learnt from it. “You 16

reacted because you had to react. But more and more leading businesses have understood this was the chance for Bangladesh to move to a higher degree of quality.” After Rana Plaza, the society has adapted to the new situation, and more and more people have understood, particularly in the private sector, that they have to take up the challenge of improving the quality of factories as a first step, he said. “And you did improve. Bangladesh needs to sell clean clothes, not dirty clothes.” To have a garment factory that is certified by the Accord on Fire and Building Safety in Bangladesh or the Alliance for Bangladesh Worker Safety is kind of a trademark. “It is something that you can put into your good books, something

{Emerging Bangladesh} April - June 2014

“I believe Bangladesh will be a middle-income country well before the 50th anniversary of the nation.” that can make you proud, because it shows you have done something for your workers' safety.” What first looked like an imposition from the Western markets on Bangladesh now looks like a chance for Bangladesh to simply improve the quality of the industry, the German diplomat said. “You will have to move to a higher degree of quality everywhere if you want to become an emerging country. I think that is on the way, and I am very satisfied about that.” The country, the private sector and the media reacted very positively to the crisis following the Rana Plaza building disaster and the Tazreen Fashion fire, he said. To restore the image of a leading supplier of clothes, the diplomat said, a reformed Board of Investment is needed. “You need to be more proactive in inviting investments and offer solutions to land and energy because these are the two biggest bottlenecks in bringing foreign investments, and German investment in particular.” He said the country needs to make intelligent choices in case of energy supply and the way the country finances itself. “You need to have a better revenue generation for a better budget.” The ambassador also spoke of the country's intent to issue international bonds. “I think the bond will be over-subscribed and will sell very well. Once you are part of that club of countries that are on the international bond market, you will move up the scale.” With these elements, he thinks, Bangladesh would be able to leave behind its reputation of being a poor country. Conze tipped Bangladesh to become a middle-income nation sooner than the government targeted date of 2021. “I believe Bangladesh will be a middle-income country well before the 50th anniversary of the nation,” he said, adding that if the politics is sorted, the growth rate of 6 percent can go up to 8 percent. “I have no doubt about that because I have seen the energy everywhere.” Nevertheless, it would require “very strong, transparent and strategically thinking” leadership, he added. “I hope you will succeed in getting out of poverty even faster than you have predicted yourself.” A strong Anti-Corruption Commission will help, as the country needs strong institutions that will make it more attractive for people to behave correctly than to misbehave, Conze said. “With stronger institutions you will have more growth.” He said when he came to Bangladesh two years ago he thought the country was very poor. “But it is a hybrid country. Yes, there are millions in the countryside who live under the poverty line. At the same time, there is

huge movement towards ever-larger middle class. That is the real success story of this country.” He also said, “You can be independent and autonomous and that is a matter of pride. If all forms of governments are on your side and governance is better, the country can move faster.” The diplomat said Bangladesh needs to act now and implement things. “If you can manage it not just at the factory level but as a society, I am not worried about the future of a country that I have come to love.” His assignment in Bangladesh saw two industrial accidents in the garment sector and almost year-long political unrest. But he said normalcy has returned to the country with new challenges. “I have witnessed a tremendous amount of movement. Even though it was politically a very critical time, the country has continued to move forward. It has impressed me.” Conze also said the development partners should not be smarting over how the recent elections were conducted in the country, defying international calls for an allinclusive poll. “We, together with a number of other diplomats, especially within the EU, spent a lot of energy trying to bring the parties together last year and trying to help them find conditions under which BNP would participate.” But in the end, things happened as they did, and everyone should now talk less about the past and more about what is next, he said. “As Europeans, we have said what we have said. We are not changing our mind about that. But this is not at the center of our attention now. Turning a page does not mean you approve of everything that has happened in the past.” Conze also praised the country's business community who showed sheer resilience in the face of political unrest. “In spite of a very difficult period in 2013, Bangladesh's business community has continued to work as well as maintained growth rate. Overall, they have succeeded. It is quite impressive.” Conze, who will leave the country next Monday, a year before his tenure ends, said he is very sad to be leaving early. “And please take my candor and frankness as an expression of my admiration, appreciation and love.” His next charge would be to head a new peace building mission of the European Union in Mali, where police forces are demoralized and need motivation to stabilize the country. “This is a challenge of a size that I could not reject.” Conze, now 59, joined Germany's foreign services in 1981 and served in Hong Kong, Beijing, Vienna, Warsaw, Tunis, Khartoum, Moscow and Harare, before moving to Dhaka in late 2012. The article was previously published on 27th May, 2014 in the Daily Star

{Emerging Bangladesh} bgcci.com

Cover Focus

A Accord & Alliance

The Bangladesh Accord on Fair and Building Safety and the Alliance for Bangladesh Workers Safety. The two most important names in the RMG sector at present. The former is a legally binding agreement signed by over 150 apparel corporations from 20 countries in Europe, North America, Asia and Australia; two global trade unions, IndustriALL and UNI; and numerous Bangladeshi unions. Clean Clothes Campaign, Worker Rights Consortium, International Labor Rights Forum and Maquila Solidarity Network are NGO witnesses to the Accord. The International Labour Organisation (ILO) acts as the independent chair. The latter is an initiative of 26 primarily North American companies. Besides safety issues, worker empowerment initiatives including safety training, a new safety training curriculum for factory managers and workers, and a confidential helpline through which workers can anonymously report concerns-are also on their agenda and progresses have been made in those areas too. Both Accord and Alliance are inspecting thousands of RMG factories in Bangladesh to check their structural integrity and safety measures to avoid and tackle any outbreak of fire, the most common reason of which is electrical short circuit. The factories which will not be covered by them are being inspected by National Tripartite Plan of Action. This issue's cover story focuses on these inspections. Through a series of interviews, we have tried to find out the latest information for our readers to update them about the progresses that have been made. We also wanted to know how businessmen perceive those inspections. They are the pivotal factor in the paradigm shift in the RMG sector because sooner they adopt to the positive changes and decide to maintain the safety status, the better it is for all of us. Read on with Tawhidur Rashid to know about how Bangladesh RMG industry is reaching its tipping point towards a brighter future.

Special thanks to all the key personnel who have been featured in these interviews for sharing information and views on various issues. Special acknowledgments to Sakhawat Abu Khair, Daniel Seidl and Adnan Nafis of BGCCI for their guidance and cooperation; Wafiur Rahman for his help in transcribing the interviews; Din M Shibly with photographs and Athir Rahman for helping with the graphical representations of facts and figures.

{Emerging Bangladesh} bgcci.com

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â&#x20AC;&#x153;The remediation requirements from the Accord inspections must all be done. Finances for completing the remediation must be identified by the owners and brands so the safety items get fixed.â&#x20AC;? Rob Wayss, Executive Director, The Bangladesh Accord on Fire & Building Safety informs us about their progress in inspections of RMG factories, the necessary steps to be taken by owners and the much talked about remediation issues.

Tell us something about your inspections, which many believe, will put Bangladesh's RMG sector on a trajectory of sustainable growth. The Accord signatory brands and retailers are required to disclose to the Accord and publicly which factories are producing their products in Bangladesh. Our independent engineers are inspecting every one of these factories. From these inspections, findings reports are issued and our Chief Safety Inspector authorizes corrective action plans. The factory owner and the brands then become bound to fix all of the items identified in the inspection and captured in 20

{Emerging Bangladesh} April - June 2014

ROB WAYSS

the corrective action plan. Our engineers then verify that the items are being fixed correctly. All of this information is disclosed publicly on our website and the CAPs are updated as the items get fixed. We will similarly disclose if things are not being fixed. With the factories that are being inspected now we are intensively engaged in developing corrective action plans to correct the things that are being identified in the inspections. We are confident that the corrections will take place. We have a team of engineers that will work with the engineers who the factory owners will hire to design the items that need to be fixed in their factories. Approximately 1600 factories will be inspected by the Accord for fire, electrical, and structural safety. There are timelines in the corrective action plans associated with each item needing to be fixed. Factories will become safe and will be kept safe in these areas over the 5year course of the Accord. This will put the Bangladeshi RMG industry on a completely different trajectory, from what it was in November 2012 and April 2103 after the fatal Tazreen fire and Rana Plaza building collapse.

As for the immediate corrective measures, what were the problems identified that required immediate attention? There are issues like removing weight and managing load. During inspections, it was found that many factories had stock areas, where they had rolls and rolls of fabrics stacked from floor to ceiling. It is a tremendous amount of weight, all in one bay of the building. The engineers for

inspection had instructed the owners to reduce these weights and/or distribute these weights across the floor or multiple floors. Other instances would be too many water tanks on the roof, the suggestion being to partially drain the water to reduce weight load, distribute them evenly around the roof rather than keeping them together on one side, and in some instances, strengthening columns or beams to ensure the building can support the weight. In the electrical area, we witnessed certain cases where they had wires, which were determined to be extremely hot. We have asked them to install more circuits to minimize the number of wires at use.

What about the problems that required long-term rectifications? A number of buildings require sprinkler systems, which would require nine months to a year, for installation. We expect that there may be some lag in acquiring the items and getting them into the country. The factories that have been found to be structurally vulnerable were instructed for immediate evacuation. Some of the fixes were significant. Coming up with the most practical solutions is sometimes quite challenging. In some instances, it might be more effective for some factories to relocate, given the costs required to fix the problems. Some owners are already considering relocating to another facility. Rented buildings can be a challenge as the property owners have to be involved to make the repairs.

What do you suggest to rectify the problems found in rented buildings? We try to engage the property owners in

We are confident that the corrections will take place. We have a team of engineers that will work with the engineers who the factory owners will hire to design the items that need to be fixed in their factories. Approximately 1600 factories will be inspected by the Accord for fire, electrical, and structural safety. {Emerging Bangladesh} bgcci.com

COVER FOCUS Signatories Australia Cotton on Group Forever New K-Mart Australia Pacific Brands Pretty Girl Fashion Group Pty Speciality Fashions Australia Target Australia Woolworths Australia Austria Fashion Team HandelsgmbH Belgium C&A Malu N.V. JBC NV Jogilo N.V Tex Alliance Van Der Erve Canada Loblaw Denmark Bestseller Coop Danmark Dansk Supermarked DK Company IC Companys A/S Texman Finland Reima Stockmann France Auchan Camaieu Carrefour E Leclerc Groupe Casino Germany Adidas Aldi Nord Aldi S端d Baumhueter International GmbH Belotex Brands Fashion Chicca Colombus Textilvertrieb GmbH Daytex Mode Deltex Distra EIWOTEX GmbH Ernsting's Family Esprit Florett Textil GmbH & Co Full Service Handels GmbH G.Gueldenpfennig GmbH Gebra Non Food Handelsges GmbH Hanson Im-und Export GmbH Klaus Herding GmbH Hess Natur-Textilien GmbH Horizonte Horst Kr端ger GmbH Hueren OHG Professional Outfitters Jolo Fashion Juritex Face to Face GmbH & Co.KG Karstadt Kik Textilien Killtec Sport Lidl Metro Group 22

Multiline Group New Frontier GmbH Olymp Benzer GmbH OSPIG Textil Logistik GmbH Otto Group Puma RAWE Moden Rewe Group S.Oliver Schmidt Group Steilmann Holding AG Tchibo Uncle Sam GmbH Viania Wunsche Group Hong Kong Cronytex Sourcing Entrade Manufacturing Co. Limited Heli Far East Ltd Mosgen Limited Topgrade International Italy Benetton Chicco Prenatal Japan Fast Retailing Netherlands De Bijenkorf Coolcat Fashion Linq G-Star Hema Holland House Fashion MS Mode N-Tex O'Neill Teidem Texsport BV The Sting B.V. V&D Veldhoven Group Vingino We Europe BV Wibra Supermarkt B.V. Y'Organic BV Zeeman Norway Helly Hansen Varner Retail VOICE Norge AS Poland LPP Spain El Corte Ingles Inditex Mango Mayoral Moda Infantil, S.A.U. Padma Textiles Sri Lanka Comtex GmbH Sweden AX Stores Gina Tricot AB H&M Hemtex ICA Sverige Intersport AB KappAhl New Wave Group {Emerging Bangladesh} April - June 2014

RNB Retail and Brands AB Sandryds Stadium Switzerland Charles Vogele Switcher Vistaprint Turkey Mavi LC Waikiki United Kingdom Arcadia Group Bonmarche Danielle Group plc Debenhams Fat Face John Lewis Marks and Spencer Matalan Milords Mothercare N Brown Group New Look Next OTL Brands Ltd Primark River Island Sainsbury's Shop Direct Group Tesco USA Abercrombie & Fitch American Eagle Outfitters Fruit of the Loom J2 Licensing, Inc Knights Apparel L.A. T Sportswear, Inc Lakeshirts, Inc. Outerstuff Ltd New Agenda by Perrin PVH Scoop NYC T Shirt International, Inc. Top of the World Topline, Inc. Zephyr Headwear Union Signatories IndustriALL Global Union UNI Global Union IndustriALL Bangladesh Council Bangladesh Garment and Textile Workers League Bangladesh Garment Workers Independent Federation Bangladesh Garment Textiles Leather and Shoes Workers Federation Bangladesh Independent Garment Union Federation Bangladesh Revolutionary Garment Workers Federation National Garment Workers Federation United Federation of Garment Workers Witness Signatories Workers Rights Consortium International Labor Rights Forum Clean Clothes Campaign Maquila Solidarity Network

ROB WAYSS

Timeline of Accord Rana Plaza Collapse

100 brand signatories and appointment of Executive Team

May 15, 2013

Signing of the Accord

October 17, 2013

December 1, 2013 December 3, 2013

January 14, 2014

Start of operations by the Executive Team

February 1, 2014 150 brand signatories

First inspection reports published

March 11, 2014

175 brand signatories to be signed

Worker participation proposal agreed 250 factory inspections a month

March, 2014 April, 2014

April 3, 2014 April 7, 2014

Accord first anniversary

Office opened in Amsterdam

February 12, 2014

March 6, 2014

Start of implementation plan for workers participation program Steering Committee week in Dhaka

Website launched

October 23, 2013 First inspections carried out

Factory safety standards announced

April 24, 2013

First advisory board meeting

May, 2014 May 15, 2014

August, 2014 September, 2014

{Emerging Bangladesh} bgcci.com

New Bangladesh office opened and training coordinator hired

1500 factories to be inspected

COVER FOCUS

conversations with the factory owners. Right now, we have some cases where the owners are cooperative. We are hopeful they will actually implement the corrective measures. We will verify that these have been done. In some shared buildings where there are also non-Accord factories, we have faced challenges as the latter refuse to accept the Accord inspections or take part in the corrective actions. Some building owners have also expressed they will not make repairs to their buildings. We have some cases where factory owners are planning to move their facilities to non-shared buildings. In some cases, owners are accelerating this process and speeding up constructions they have ongoing. For â&#x20AC;&#x153;critical findingsâ&#x20AC;? from inspection in particular, the Accord requires the support of the Government. In some cases our inspectors find significant structural flaws in some buildings where it is determined the building is unsafe for occupancy in its current state. We informed and requested the Government to evacuate the building until remedial measures could take place or some building strength tests could be done to verify the concrete strength. The Accord works with the Government Review Panel in such cases. The Government is the actual authority that can close a building; we are simply giving them evidence that the building is not safe. .

People say that it would be impossible for owners to follow the building codes of Bangladesh to construct excellent RMG factories. Do you think that is a problem? The standard that the Accord is using to assess factories is as per the BNBC (Bangladeshi National Building Code). However, the reality is that you cannot re-build a building that has already been built. Many of those buildings do not meet Bangladeshi building codes. Our standards established a minimum for life safety to be followed during inspections. It recognizes the reality that the buildings are already built. What we are measuring for is to create a minimal level of structural, fire and electrical safety for those workers and employees producing garments for Accord

signatory brands in the factory. The standard was developed through technical discussions of the Accord, Alliance, and the National Effort in technical meetings facilitated by the ILO. There are a number of items in the building code, which cannot be met in many of the existing buildings. This is part of the reason why the Accord, for example, requires sprinkler systems in hi-rise buildings (hi-rise = buildings of 23 meters or more in height).

Could you please tell us more about the sprinkler systems, which was not on the national building code. How many buildings need to be under the sprinkler system? What was the reaction from factory owners after hearing your recommendation? Based on compromises that were required in other areas based on the inability to apply the BNBC fully in existing building, the Accord engineers determined that for minimum life safety purposes in hi-rise buildings, sprinklers are necessary. The Accord is very clear on the issue of finances for remediation. Owners are expected to pay for repairs to their factories, however if they require financial assistance the Accord brands in the factory will sit with them and find means of financing. The Accord does not allow required remediation not to be done. The finances need to be identified for things to get fixed. It is a simple equation, but in reality, it needs a lot of discussion. We have been holding meetings with supplier factories regarding this, raising awareness and understanding of the Accord details, and working with BGMEA, as there are some factory owners who do need finances for the remediation. The brands are informed and obligated to help.

Do you think the non-participation of BGMEA in your activities is causing any problem in the inspections? We regret that they did not accept to be on our

During inspections, it was found that a lot of the factories had stock areas, where they had rolls and rolls of fabrics stacked from floor to ceiling. It is a tremendous amount of weight, all in one bay of the building. 24

{Emerging Bangladesh} April - June 2014

ROB WAYSS

If the owners need support from their Accord companies or brands, then those brands are obligated to support them in whichever way possible. It does not mean with money, but providing them with financial instruments so that they can fix the building and pay workers' wages. advisory board. We have factory owners who are on the BGMEA advisory board themselves, so that is some consolation. We will continue to try to convince BGMEA that it is important for them to be on our board, but the decision is theirs. There has been no problem in continuing our inspections. We have regular engagement and dialogue with them on a technical level and on the executive and political levels. We regularly meet to discuss issues related to the Accord, inspections, and remediation programs.

Recently the BGMEA president said that the factories closed down caused gross uncertainty about the future of its workers. Are you going to convey the message to the brands and request their remediation regarding this? We do not shut down the factories; we do not have the authority. We inform the authorities regarding flawed buildings. We request immediate evacuations, which happened initially, but stalled after some time, as the government was not convening the review panel for the last half dozen cases. What we do is tell the Accord brands about the flaws, ask them to inform the owners they must evacuate the factory temporarily until emergency remedial measures can be taken. We require the Accord brands to express their support to the factory during this process and with the required remediation. Please understand that it was for a good reason that the Accord was signed; to prevent preventable building collapse and factory fires. . In the critical findings cases where we request the Government Review Panel, we immediately are informing the factory owners and the brands and coordinating with the labor unions to immediately have them mobilized to inform the workers that when they come to work the next day, the government and Accord will be thereto explain what is happening. The Accord and our union partners mobilize a communications network so

workers understand the provisions of the Accord in these suspensions to operations / temporary evacuation cases. Especially the components on: the remediation taking place, the workers' wages being paid each month while the remediation takes place, and the requirement that the factory owner maintain the workers' employment relationship with the factory. The Accord spends a tremendous amount of effort with brands, factory owners, and labor partners on these issues and monitoring the enforcement of the Accord in these situations. . If the owners need support from their Accord companies or brands, then those brands are obligated to support. It does not mean they just give them money, but providing them with financial instruments and assistance so that they can fix the building and pay workers' wages.

You mentioned the government not convening the review panels. Does it mean that the government did not shut down those half a dozen factories? The government proposed a review panel with three initiatives the Accord, the Alliance and the National Action Plan. All three of us are assessing factories on structural, electrical and fire safety. We knew before we started that the engineers would find that some buildings will require immediate evacuation and rectifications. The government established a review panel for such cases where we inform the Inspector General of the Ministry of Labor request partial/full evacuation of the said factories, and that the Review Panel be convened to go to the factory. The panel consists of four engineers, two from BUET, one Accord and one from Alliance. Then that panel would inspect the factory case within 48 hours, go through the findings, determine whether anything that can be done to reopen or reoccupy the building. If they reached a consensus, then it would happen, if not, then the building would remain closed. The government would respect the finding, issue an order

{Emerging Bangladesh} bgcci.com

COVER FOCUS

to close the factory, review its report another time, visit the facility and keep it closed till remediation processes take place. For the first few instances, it worked, but the last half dozen, it was not the case. For approximately a month now, the Review Panel has not been convened or has otherwise not been functioning. We are working with the Government, Alliance, National Effort, and ILO to try to have the Panel become functional again.

So the productions related to Accord in those factories have ceased? Yes, Accord production in such factories must be halted until such time that emergency remedial measures are taken and verified. The brands work with the affected factory owners to identify how and where the affected production can be placed at another facility.

Is this breach of the Accord, after the brands and ILO working, but the government not working together? It is not a breach, we are doing what the Accord requires be done. The government issued a reviewing panel, used it initially, but the reality is that it is not being implemented anymore. We still continue to work with the national effort and the ILO to re-establish the Review Panel and on a variety of other issues related to safety in the RMG industry and our inspections programs. Any future suggestions regarding this? The government has put forth some revised terms of reference for the review panel. The Accord will be required to inform the brands that Accord brands' production will have to cease in those factories and the remediation, wage, and employment provisions for the Accord must be enforced.. We will continue to work with the Government and others to see the Review Panel become functional again. We will have finished all our inspections by this September. There will be follow-up monitoring and verifying of the corrective actions, where all the concerns aboard will sit and add details if needed. The factory owners will seek assistance of engineers/architects for making the remedies. Therefore, it will be a continuing process in general.

Now something about the components that needs to be fixed or installed in the flawed buildings. What are the requirements of the suppliers to be accepted by ACCORD standard? It does not make sense to work 26

with non-certified companies or suppliers, which do not fulfill your standard. The factories do not want to invest by buying the wrong goods. If you are referring to "suppliers" who import/sell fire doors, sprinkler components, etc. or firms which install or construct the corrective actions in the factory, the requirements of the Accord are the doors must be graded and certified by recognized authorities and that the installations / constructions rectify the finding. Brad Loewen of Accord is trying to obtain information on companies that sell these types of products and/or companies with skilled craftspeople who install these. BGMEA is also doing this and I believe IFC may be as well. Our main work now is ensuring the designs for the remediation are correct before the construction starts and then working to verify things are being done / installed correctly.

What are the import taxes? The MoC recently announced that many of the commonly required inputs for the remediation are now permitted to be brought in duty free. A BGMEA representative challenged this saying that the list of items permitted duty free is quite limited and needs to be expanded. The MoC said all this becomes official when the budget is announced. You should speak with BGMEA for details on the limits of the "duty free list" and status of items actually being brought in duty free now (or when it officially commences).

What is the latest development in the issue of concrete strength of buildings? A recent AFP report claimed that Accord is differing on that issue with Alliance and BUET and this too had some connection with Government halting the evacuation of flawed factories. In his interview with us, Professor Ishtiaque Ahmed from BUET said that they were working on the issue and hopeful to convince Accord inspection team to rely on standards suggested by BUET. Would you like to share your position in this regard? ILO is facilitating discussions between the Accord, Alliance, and National Effort / BUET engineers to try to resolve what concrete strength assumption will be used in structural inspections for brick chip aggregate concrete poured prior to 2005. The Accord remains engaged in this process and is confident an assumption will be reached which is based on science and evidence and which provides an acceptable level of tolerance of risk.

{Emerging Bangladesh} April - June 2014

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â&#x20AC;&#x153;It should not take more than a year, by 2015 we will reach a safety standard, where everyone will have a piece of comfort.â&#x20AC;? Mesbah Rabin, Managing Director of Alliance for Bangladesh Worker Safety gives an account of their inspections and how his organization is trying to help our RMG sector get the much needed facelift.

Could you please give us a brief account of Alliance's achievement so far? The Alliance was supposed to inspect 626 factories, out of which we have completed 568, which is about 90%. The situation is pretty good, from what we had previously apprehended when we first started the job. Out of 568 factories, we had to declare three of them unsafe, which were temporarily shut down. Five were referred at first to the government for their review panel to take a decision, out of which the three were shut down. Rest two are continuing partial 28

{Emerging Bangladesh} April - June 2014

MESBAH RABIN

production reducing live load as recommended by review panel.

How many workers were there in those three factories? Were there any obstacles to run the inspection process smoothly? Approximately 1200-1500 workers were in the factories that were shut down. Virtually there are no bottlenecks from the owners, but it is a matter of mindset. People were used to working in one style for a long period of time. So when we ask them all of a sudden to install sprinklers, i.e something which was unheard of, for most of them. They considered it to be sophisticated technology. There had been some misgivings, which we have tried to overcome, clearing the mindset issues. Clearly it was the lack of awareness that brought initial resistance, questions were made but once they were aware and informed about the installation of sprinklers in high-rise buildings, there was no problem.

In case of sprinklers, there are some owners worrying that hard water will make those rust easily and go out of function. Is there any base of such claims? This is what we call the lack of awareness. To up bring the awareness, the NFPA (National Fire Protection Association) who has produced the standard of this new method of fire safety, they are holding a trade exposition in Las Vegas in June. We are taking the business delegation to the US, to show

them how sprinklers operate their advantages, shortcomings, etc. We are trying for a working committee for assistance and bringing in the technical assistance from NFPA.

Some owners also complain that the BNBC guidelines were not clear enough to follow. BNBC and it's implementation needs Engineering understanding. It is recommended to hire qualified engineers or engage consultant firms in understanding and implementing BNBC on contractual basis.

What kind of infrastructural deficiencies were evident in factories that you have inspected so far? The Bangladesh National Building Code (BNBC) 2006 was only recent, as 74% of the RMG factories were built before that code came into existence. All those factories are not codecompliant. There are countless deficiencies in those factories. Firstly, for example in the very Rana Plaza, the generator was placed at a higher floor, which has a vibrating effect on the structure. When everything was taken down, there was supposed to be a fire rated wall around the utility corner, none of them had those. As mentioned before, the buildings were built before BNBC 2006, so these were the inherent deficiencies. Secondly, our industry growth took place in the last twenty years. As the demand increased, so did the volume of orders, resulting in entrepreneurs

â&#x20AC;&#x153; Currently, we have trained more than 326 factories, covering 440,000 workers. We were supposed to train more than 1,500,000 workers, out of which we are almost halfway through. These are basic fire safety awareness. We do not expect female workers to be fire fighters or rescuers.â&#x20AC;? {Emerging Bangladesh} bgcci.com

COVER FOCUS

Timeline of Alliance

Rana Plaza Collapse

April 24, 2013 July, 2013

North American retailers and brands announce the creation of Alliance for Bangladesh Worker Safety

September 25, 2013:

Available Alliance factory safety reports shared with FFC

October 10, 2013

Fire, building safety trainers identified Identification of Worker Participation Committees

July 10, 2014

· Achieve 100% inspections of Alliance factories · Train workers, management at all Alliance factories

· Developer, building safety protocols · Engage 3rd parties to develop training program · Adopt training standards curriculum · Common safety standard recommended for adoption

September 10, 2013

· Factory inventories complete · Factory lists shared with FFC · Third party “hotline” process selected

Finalize protocols for reporting

Achieve transition from individual company to Alliance Fire and Building Safety Training Program

November 11, 2013

July 10, 2015

{Emerging Bangladesh} April - June 2014

Ongoing training, inspections, audits 2015 to 2018 and verification, and public reporting

MESBAH RABIN

increasing their tailoring facility. That is how we have three types of structures for RMG factories. Firstly, we have rented buildings with mixed occupancy, restaurants and convenience stores in the ground floors, banks on the second or more floors and RMG on rest of the floors. We have factories in 18-storied buildings, something people across the globe cannot conceive. With thousands of people working together in top floors, some crazy ideas came into being, such as bird windows. Inside the windows there, they have put thick Manila ropes. The owners expected that when there is a fire, the workers will get down from the 18th floor using that thick rope. Despite having the knowledge that four out of five workers are th female (one 10 could be maternity cases), we had these ideas. However, every problem has solutions. We have developed a standard, which we considered as an alternative to the BNBC 2006 guidelines. If we can comply with that standard, then our RMG industry will significantly improve. Safety is a subjective issue, where you cannot have 100% safety. But a degree of such level is accepted and appreciated which minimizes loss of life . Accidents may happen and

will happen, but then it will be with zero loss of life. Due to the lack of electrical know-hows, we have never thought that whether a room, which contains two airconditioners, can take up such a load. Now as we go for inspections with electrical engineers, we see that most of the cables and wires are overloaded and overheated, that may lead to short circuits. The majority of the accidents which took place in the RMG sector, their root causes turned out to be short circuits. We did not know how to clean the MDB/SDB. And the vermin, the dust and the spider nets lead to short circuits and fires. We have 10 top challenges written down, such as the MCB top terminals, connections, the fire signs, the circuit breakers covered with wooden/combustible materials. All these are time-bound factors. It should not take more than a year or two, by 2015-16 we will reach a safety standard, where everyone will have a piece of comfort. Before we develop the trainers' training modules, we had taken a baseline survey during November-December 2013 to understand what they know, what they don't know and what they need to know. Based on this we developed a training module, given the educational and analytical aptitude of the

The current group of 26 includes the following companies: Ariela and Associates International LLC; Canadian Tire Corporation, Limited; Carter's Inc.; The Children's Place Retail Stores Inc.; Costco Wholesale Corporation; Fruit of the Loom, Inc.; Gap Inc.; Giant Tiger; Hudson's Bay Company; IFG Corp.; Intradeco Apparel; J.C. Penney Company Inc.; The Jones Group Inc.; Jordache Enterprises, Inc.; The Just Group; Kohl's Department Stores; L. L. Bean Inc.; M. Hidary & Company Inc.; Macy's; Nordstrom Inc.; Public Clothing Company; Sears Holdings Corporation; Target Corporation; VF Corporation; and Wal-Mart Stores, Inc.; YM Inc. Supporting associations include: American Apparel & Footwear Association, BRAC, Canadian Apparel Federation, National Retail Federation, Retail Council of Canada, Retail Industry Leaders Association, and United States Association of Importers of Textiles & Apparel. In addition, Li & Fung, a major Hong Kong-based sourcing company which does business with many members of the Alliance, will serve in an advisory capacity. Alliance Steering Committee ·

Honorable Ellen O'Kane Tauscher, Board Chair

Ambassador James Moriarty, former U.S. ambassador to Bangladesh

Bobbi Silten, senior vice president of global responsibility for Gap Inc. and president of Gap Foundation

Daniel Duty, vice president of global affairs for Target

Jay Jorgensen, senior vice president and global chief compliance officer for Wal-Mart Stores, Inc.

Mohammad Atiqul Islam, president of the Bangladesh Garment Manufacturing and Exporters Association (BGMEA)

Muhammad Rumee Ali, managing director of enterprises at BRAC, the international NGO founded in Bangladesh

Randy Tucker, global leader of the fire protection and safety team at ccrd, a Houston-based engineering firm

Tom Nelson, vice president for global product procurement for VFC {Emerging Bangladesh} bgcci.com

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â&#x20AC;&#x153;We have developed a standard, which we considered as an alternative to the BNBC 2006 guidelines. If we can comply with that standard, then our RMG industry will significantly improve. Safety is a subjective issue, where you cannot have 100% safety. But a degree of such level is accepted and appreciated which minimizes loss of life.â&#x20AC;?

workers, we need to understand how much they can absorb, retain and apply when there is an emergency. Currently, we have trained more than 326 factories, covering 440,000 workers. We were supposed to train more than 1,500,000 workers, out of which we are almost halfway through. These are basic fire safety awareness. We do not expect female workers to be fire fighters or rescuers. All we want is that they should be able to recognize the fire hazards, understand whom they should report to, how to operate the fire alarms, pressing it, safely exit to a safer place, etc. Saving their lives is the bottom line. The mid-level management and the male workers will have a different module, developed in a manner where they should be able to use the in-house fire extinguishers, sprinklers, hydrant systems, etc. We are ready with helplines, we have already launched a pilot project to 50 factories, with soft launching to 10 factories. They accept that there will be a toll-free hotline where workers can call for help, we want to hear their voices. If they have a serious concern, they should be able to make a call.

How are you handling the cases of compensation for remediation? Alliance is a mandate, because of the structural deficiencies, if a factory has to be closed for remediation, we are ready to pay 50% of the

wages to the impacted workers up to 2 months, with 50-50 partnership with the owners. We have already paid in all our cases. We have also collected contact information of the workers compensated so far for surveys. The survey was to find out whether they are still employed or whether they had taken jobs elsewhere, whether they were pressured to give shares to someone, etc.

Is there any difference between Accord and Alliance? There is no difference, as the standards and protocols are harmonized. However, their approach to educate workers is different from that of ours. As far as improvements are concerned, their inspections and remediation are all the same. We are getting full support and assistance from BGMEA. Their president is also on the Alliance's board. We are talking about the industry's safety, so every representative from the stakeholders should be in the board, which we have already taken.

Will there be any follow up inspections in future? There will be follow-up inspections and audits. Corrective action plans will be vetted by us, with our technical inputs. The plans will be verified based on their individual timelines, with each corrective measure having separate times.

{Emerging Bangladesh} April - June 2014

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“Both Accord and Alliance can support the change that your government and the people want. Bangladesh needs to exercise leadership in this area. We are here to help.” H.E. Heather Cruden, High Commissioner of Canada in Bangladesh

What is your take on the developments of issues one year after the Rana Plaza tragedy? There has been tremendous progress, but there is more work that needs to be done. Canada is one of the first countries to have their private sector companies visit Rana Plaza after the tragedy. They were some of the companies implicated and had provided significant amount of support following the incident. We shared their press release just after the first anniversary of tragedy. From the Canadian government's perspective, we take a multi-faceted approach to the issues that have come up in the RMG sector, following Tazreen Fashion and then Rana Plaza. We are looking at it from a political perspective, a human rights perspective, development and trade perspective. We have been quite active following these incidents, in engaging with the government to improve and reform the sector ensuring workplace safety and labor rights. Canada is providing $8 million to ILO, as one of the three countries working with ILO, the others being the Netherlands and United Kingdom. This has been a way to work with the government and provide necessary support to them, implementing their commitments in the national sustainability action plan. 34

Canada is one of the countries that is engaging the government of Bangladesh in a group called “Three plus Five,” where five ambassadors from the US, EU, Canada, Netherlands and rotating member of the EU (Germany participated) met the Secretaries of Labour, Commerce and Foreign Affairs. The companies that visited have memberships in both the Accord and the Alliance. Therefore, we really feel that our role on the ground is to ensure coordination between the two initiatives, maximize both the private sector support, and make sure that the international buyers are taking a consistent approach to this issue. Both Accord and Alliance can support the change that the Bangladeshi government and its people want. This cannot be imposed by international community. Bangladesh needs to exercise leadership in this area. We are here to help.

Not much is achieved when it comes to the compensation of the victims of Rana Plaza Tragedy. How to speed up the process? It highlights the aspect of coordination. If the systems are not in place, then you obviously have issues. A fair bit of work has been done for

{Emerging Bangladesh} April - June 2014

H.E. HEATHER CRUDEN

â&#x20AC;&#x153; It is important to recognize that this is a goal for Bangladesh, it is not a goal imposed by the two bodies, or international buyers. Everybody recognized that after Rana Plaza, this sector needed to be reformed.â&#x20AC;? compensations, but it's an area where more work needs to be done. A trust fund has been set up, where money has been put up worth $17 million approx, where $40 million is to be needed. If the Prime Minister's Trust Fund can be added along, then that would be helpful.

As the inspections by Accord, Alliance and National Action Plan are going on, BGMEA is concerned over the frustration of the jobless workers from factories that got closed down. What will happen to the workers? What is the role of the buyers here? There are different modalities to help. The government makes the decision to shut down or not a factory, following inspections by BUET engineers with people engaged by both the Accord and Alliance. The help that is available depends on who the factory is producing for, and there is also a responsibility for local factory owners here. The Accord is helping to acquire funds for the remediation efforts and the Alliance is providing funds to pay for the salaries. For factories that are being closed, that do not work under the brands representing Accord and Alliance, are at the risk of the factory owners.

Recently the Government of Bangladesh has halted the shutting down of factories. Do you think this will prevent both Accord and Alliance from achieving their goals? It is important to recognize that this is a goal for Bangladesh, it is not a goal imposed by the two bodies, or international buyers. Everybody recognized that after Rana Plaza, this sector needed to be reformed. The government, the buyers, the workers and some of the local factory owners have recognized that. The trick is to work together, to achieve those reforms. If we do not, alternatively it will be Bangladesh's economy, the workers and the female RMG workforce that is going to suffer.

Please tell briefly about Canada's current development assistance in Bangladesh? Canada is providing $8 million to ILO, for improving workplace safety, mentioned at first. The total project is worth $24 million.

The objective of Canada's current development assistance program for Bangladesh is to create opportunities for children and youth and to stimulate sustainable economic growth. Canada's long-term, significant investments in children and youth target child, newborn and maternal health and basic education. In the area of sustainable economic growth, Canada supports public financial management and skills for employment. Our support to public financial management is designed to enhance efficiency, effectiveness and accountability in the management and use of public funds in order to accelerate the implementation of national development priorities leading to greater poverty reduction and sustainable economic growth. Our skills for employment programming seeks to create a better-trained, qualified and competent workforce, with particular attention to disadvantaged groups in the labor market, such as women, youth and people with disabilities. Canada is also providing $19.5 million to the ILO's Bangladesh Skills for Employment and Productivity (B-SEP) project. The B-SEP targets 5 emerging sectors in the Bangladesh economy Pharmaceuticals, Ceramics, Agro-food processing, Furniture and Tourism/Hospitality.

Post Rana-Plaza disaster, as per donors and policy makers' suggestion, the Government is showing positive attitude towards formation of Trade Unions. In last one year, we have seen more than a hundred Trade Unions being formed. Is that a good sign? I think they are going to help improve workplace safety rights, assuming what their roles and responsibilities are. As part of our agreement with ILO, we will provide training for them. We just had a Canadian delegation; an MP was here with representatives from 5 trade union representatives. This is not an area where we have any expertise over the subject, but they were very clear that the formation of such unions is not enough. The unions' roles would be to go for collective bargaining and come to a collective agreement that helps to provide workers' safety and rights. I think we can say that it is a good step in a long process ahead. What we have is firstgeneration RMG workers, from villages with zero to low levels of education, they don't know what their rights are, don't know what the role of trade unions should be and don't necessarily understand their own roles once the unions have been formed. There are responsibilities from the owners' side, from the government's side, etc.

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â&#x20AC;&#x153; We are happy, as the rumors that 80% of our factories are vulnerable, is now finally cleared.â&#x20AC;? Md. Atiqul Islam, President of BGMEA expresses his relief as only 2% of the inspected factories were shut down contrary to a number way bigger as speculated earlier. Edited excerpts:

Being the President of the BGMEA, what's your repercussion about the factory inspection done by Accord and Alliance? We are happy, as the rumors that 80% of our factories are vulnerable, is now finally cleared. After having these inspections, it is clear to all that only 2% of the factories are structurally vulnerable. In some cases, there is room for improvement. However, Accord and Alliance still cannot come to common standards. In example, Alliance will not make duplicate visits to the factories where Accord is supposed to {Emerging Bangladesh} bgcci.com

MD. ATIQUL ISLAM

go, but it is not happening vice versa, and the very reason is not known to us. The logic behind this is that Accord has their own set of protocols, which is why they are not agreeing to the condition of not visiting Alliance factories. I'm not happy in this regard. BGMEA had a meeting with the government, where the Accord agreed that they will not make duplicate visits. Nevertheless, the reality is that the inspections are still being done in some factories, which were previously being inspected by Alliance already. In the question of concrete strength of buildings, the Alliance and BUET engineers are content with the majority of the findings, whereas Accord is not on the same page with them.

Installation of sprinklers in buildings above 23 meter seems to be a big issue for many building owners. How to resolve that issue? The issue of constructing sprinklers for buildings below 23m is not in Bangladesh National Building Codes. This is also a concern to all the factory owners as to why they should install this kind of thing. But we would request the owners to construct it. We sat with them along with Alliance/Accord officials, explaining that if they need, then financial assistance will be sought for them. It can be optional, but not mandatory. Accord is exerting pressure on us in this regard nevertheless.

Tell us something about BGMEA's

programs on fire safety awareness. BGMEA has done counseling measures. Alliance and Accord has arranged for an exhibition in August on fire safety equipments. We are going to Las Vegas for the NFPA meeting as well. After coming back, we will conduct awarenessraising orientation programs. After Rana Plaza, we held crash courses for upper and mid-level managers of RMG factories on how to react to safety hazards.

Accord has invited you to be on their advisory panel, which you have turned down. Any resentment behind such decisions? We turned it down because we were asked to be part of the advisory body, not the steering committee. Decisions are made in the steering committee. No matter what, BGMEA is the main steering body of the RMG sector. But being in the advisory panel, we can merely advise. At the same time, noted industrialists are also advising us not to be on that board. As far as the buyers are concerned, they are saying that the agreement is between the buyers and the owners, so there is no place for BGMEA in all this. Now if you ask me whether we would like to join the steering committee if asked, my answer is: we would not mind doing that. Because for us the betterment of the sector means much more than anything!

The compensation of remediation is still unresolved. What's your take on that? The Accord steering committee should take

As far as the buyers are concerned, they are saying that the agreement is between the buyers and the owners, so there is no place for BGMEA in all this. Now if you ask me whether we would like to join the steering committee if asked, we would not mind doing that. Because for us the betterment of the sector means much more than anything! 38

{Emerging Bangladesh} April - June 2014

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5600

responsibilities of the workers, but I am very surprised to see that there are industry leaders, trade union leaders, none of whom are doing enough to look after the interest of common workers. After talking with our Commerce Minister, I have suggested them to follow the same compensation format that Alliance is offering. Nonetheless, they keep saying that it is on part of the owners to pay the workers. There is no point in paying workers month after month when the factory is closed. Also, closed down factories make workers frustrated.

384

Do you think the Rana Plaza disaster gave BGMEA a new vision?

This is not only for BGMEA. When buyers place assignments on factories, they do not look into the compliance factors. So we cannot be blamed for everything. Rana Plaza is the cost of cheap price so far. While placing orders, buyers should look into all aspects; only then the paradigm shift will be possible. BGMEA is advising the buyers to place orders where there is ethical buying practice/compliances. This year's prices are 7-8% less than last year's, which is not right. All over the world, prices are going up, not the other way around. In the minimum wage board, the wage hikes are done annually. Utility/production prices are going up as well. So this means that they are not giving us ethical prices. The government cannot do anything in this regard. Buyers must understand that they have to pay justified prices, based on all the expenses and aspects that involve the workers. Trade unions are on the rise. Does that worry BGMEA or its stakeholders? In the last 10-12 years, there have been 38 trade unions, but now that number shot up close to 150. Workers participating in these are of 20-35 years; they do not know about their rights or responsibilities. I have asked the ILO and other labor agencies to integrate one formula on how to train such union leaders and workers. We want legal and constructive trade unions. Anything else will be destructive for our sector. We request the political parties not to politicize the union leaders.

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â&#x20AC;&#x153;This is only a beginning, an important one though, it has to begin somewhere. It can only be started by the workers.â&#x20AC;? The Director of the ILO Office in Dhaka, Srinivas B. Reddy talks about his optimism on the surge of Trade Unions in Bangladesh and how factory owners are embracing inspections and suggestions by Accord and Alliance, both of which are signs of change in mindset of local entrepreneurs. Edited excerpts:

Are you happy with the outcomes of the factory inspections? These inspections of 1300 factories so far (out of almost 3600 factories) and their outcomes are very significant fulfilment of the commitments made by the private sector. On their outcome, I am very happy to see how things are progressing. There were 19 factories, which required invoking of review panels and temporary suspension of those factories to ensure workers' safety. It is a positive trend, for the EU compact. It is a good partnership for brands and 40

{Emerging Bangladesh} April - June 2014

SRINIVAS B. REDDY

retailers taking responsibilities to ensure safer workplaces. The rest of the factories including the sub-contracted ones will be taken care of by the National Tripartite committee. As a way forward, we have to ensure the rest of the factory inspections carried out, along with their remediation is carried out according to the 3 initiative plans and funds be made available.

Is there any difference between the inspections being carried out by Accord, Alliance and NTPA? I do not agree with this. All the three initiatives will follow the same standards, which we ensured by facilitating a dialogue among the 3 partners to agree on harmonized minimum standards based on structural, electrical and fire safety, which was made in November last year. Inspections made by BUET engineers are on par with the other bodies. We offered technical assistance by hiring an international engineering firm, Arup, who is working side by side with the BUET engineers, to ensure quality assurance. The whole idea of bringing international expertise is to ensure that every inspection is on par with the three incentives. I have seen instances where Accord/Alliance engineers have witnessed findings from BUET engineers, which they had missed out.

improvements can easily be made if occupational safety can be prioritized, people first, i.e keeping all the staircases and passages free. The moment a factory is inspected, the inspectors are engaging in a dialogue with the owners. Improvements are done well before the reports filed. The owners want to see genuine improvements. They used to perceive all these as burdens, but now they look at this as an opportunity to show it to their buyers and say that Bangladesh contains international standard RMG factories.

Accord is yet to close the deal on paying for remediation compensation. ILO is a neutral Chair in Accord. How do you see this? From Accord, their steering committee is responsible to make decisions. From ILO, we are a neutral chair. The government made a request to them to consider payment of wages during the suspension period during the remediation stage. There is a need to address the issue of wages-any worker told that they do not have to show up for work the next day is justified to worry. All stakeholders need to address this issue. We have to find a solution to this.

Evacuations of factories spread a fear among factory owners. Do you think it's a problem of mindset that we have?

Government have amended the Labor Law. Do you think that is going to usher the much desired change in ensuring labor rights in this country?

If you look globally, at the overall findings, you have both infrastructural issues, as well as behavioral aspects. The teams found that certain

Implementation of those amendments has started already in a positive manner. What happened in July 2013 was removal for

â&#x20AC;&#x153; Bangladesh has huge potential in terms of availability of skilled workers. It continues to be competitive, but we should also see wage increases as productivity gains. The industries should invest in productivity development, and the workers should be strengthened through improved skill sets.â&#x20AC;? {Emerging Bangladesh} bgcci.com

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$24.21 million Funding of the programme called â&#x20AC;&#x153;Improving Working Conditions in the Ready-Made Garment Sectorâ&#x20AC;? (RMGP). It is being implemented by ILO and GoB and funded by Canada, Kingdom of the Netherlands and the United Kingdom.

41 Number of new labor inspectors recruited to ensure compliance as ILo and PSES Porgram of GIZ shook hands to develop capacity of the Department of Inspection for Factories and Establishments (DIFE).

11.7 thousand & 24.5 thousand The numbers of workers suffering fatal accidents and dieing from work related diseases across all sectors each year in Bangladesh, says an ILO estimation.

12 The number of key outcomes that are being implemented by the Bangladesh Decent Work Country Programme (DWCP) for the period of 2012-'15. The program was developed in close collaboration with ILO's tripartite constituents: the Government, Bangladesh Employers' Federation and National Coordination Committee for Workers Education.

Source: http://www.ilo.org/dhaka/lang--en/index.htm

restrictions for creating trade unions. The government has shown inclination to implement the legislation by promoting active registration of unions in a simple and transparent manner, the result being 146 unions. Similarly, they are finalizing the rules, which they will publish by July. Mandates are also being made to keep mandatory safety committees with employers/workers' representatives.

Provision of formation of Trade Unions has witnessed a surge of trade unions in Bangladesh, a situation like never before. What is next? Are we going to the right direction? We are going in the right direction, in terms of empowering both the employers and employees on issues of freedom of association. This is only a beginning, an important one though, it has to begin somewhere. It can only be started by the workers. This is not the end of it. Unless the unions receive support from both the parties, they will not be able to sustain. The success of these unions will be seen in the next 2/3 years whether they have implemented any plans on collective agreements. Strengthening the capacities of these unions, continue to work on capacity of the employers to change their mindset towards trade union so that they may hold constructive dialogues, to address rights and responsibilities and graduating from registration to collective agreements these are some of the onedimensional supports that we are offering to them. We are constructing programs with BGMEA so that they accept that unions are good for business.

BGMEA has increased the minimum wage of the workers, which leads to many buyers fretting over this. Is Bangladesh going to face soon what China facing today that is the soaring hike of wages demotivating buyers to place orders? Bangladesh has huge potential in terms of availability of skilled workers. It continues to be competitive, but we should also see wage increases as productivity gains. The industries should invest in productivity development, and the workers should be strengthened through improved skill sets. This would be a win-win situation that will increase their wages. All these aspects accumulated will bring benefit to the workers. We just launched a program with Canadian International Development Agency (CIDA), which addresses this issue, regarding the RMG sector. These programs will increase the workers' skill developments and improve their wages. It is a very important enterprise-based pilot. Training happens within the garment factories. This will be followed by initiation into the leather industry. With BGMEA, there will be a center of excellence that will act as both a training and resource center.

The banner in your room, which talks about 'Decent work', looks quiet fascinating. How long will it take to ensure 'Decent Work' everywhere around the world? It is a dynamic concept. What we are saying is based on the country's context and society where we are operating. But globally, decent work means work with rights. When it comes to context, we need to see the work deficits. As part of our engagement with any country, we identify and develop a program called decent work country program that addresses the key deficits, be it rights, entitlements, etc. Globally, it is to ensure that the international labor standards are implemented and maintained.

{Emerging Bangladesh} April - June 2014

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“We are not striving merely for occupational safety, but also for environmental safety.” Md. Shahidullah Azim, Vice-President, BGMEA talks about how the mindset of businessmen in RMG sector is changing to ensure safety at workplace and BGMEA’S plan to establish a clean image of Bangladesh in this sector. Edited excerpts:

How are the businessmen responding toward the factory inspection by Accord and Alliance? Previously, the factory owners' perception was that the notion of compliance was a requirement from the buyers, which was not the case at all. Now the mindset has changed, now they are aware about raising the safety of their workers and workplaces. We are not striving merely for occupational safety, but also for environmental safety. Before the tragedy, we had various cells, naming Arbitration cell, Fire Safety cell, etc. After the Rana Plaza collapse, we took 10 civil engineers and 2 electrical engineers from BUET to monitor the factories. A lot of factories were {Emerging Bangladesh} bgcci.com

SHAHIDULLAH AZIM

inspected, now we have 35 trainers, who are all retired armed forces personnel. We have 3600 operational factories, from where we take 10 from each factory, and train 36,000 personnel on safety measures. We held roundtable discussions at the Daily Star, conducted by BRAC University. Talks were held to groom RMGefficient graduates into the sector.

BGMEA refused to be in the advisory committee of Accord. What was the reason behind such stance? When Alliance was formed, I represented BGMEA in Washington on behalf of our president. He advised to observe Alliance's activities. I witnessed 50-60 buyers in a hall-room, where I faced questions on our lack of budgetary measures for prevention of such tragedies. I covered whichever way possible, refuting with rectifying measures taken through tax waivers on safety equipment, new labor law amendments, wage boards, etc. What we wanted from them was our membership in their board (Alliance's.) We have a UD (utilization declaration,) without which factories cannot import or export in any form. We used that as an instrument for remedying faulty buildings, such as shifting factory generators from top to bottom floors, or else revoking their UD statuses. I tried to convince people in that meeting that to do anything in Bangladesh, they need to do it through BGMEA. They followed my advice. As for Accord, they requested us to sit on the Advisory board, rather than in the Steering Committee. Now an advisory body is a non-functional body. We will not have any contribution there, only consenting to whatever they do. That is something what we cannot do. Now they have proposed to sit with us on a monthly basis, to discuss various issues.

Has there been any specific procedure followed in case of compensating for the remediation cases? We sat at the 5+3 Committee recently, held in the Commerce Ministry. We asked the Accord officials on the compensation procedures, but did not receive any substantial numbers from them. No owner is ready to compensate three month's worth of wages to their workers. They think about month to month expense payments, after receiving consignment payments and such. No one sits idle with huge amount of wages in Bangladesh. If Alliance helps in sharing the 3 months wages, it would be a great help. At the Alliance meeting, they said that they had a

USD100 million fund, though we are not seeing it at work. The funds should be put on vulnerable factories, which have not been closed down yet. We want a low-interest loan with long-term pay backs from the bank.

What happens when owners cannot pay month-to-month wages to its works? By the 10th, workers should receive their basic pays. But it's not only about the wage. Owners also have to think about compensation and remediation costs for corrective measures. They cannot simply take loans if they tell banks that they are shut down. We advised Accord to tell their buyers to pull out orders from the factories. This can be done through another approved factory, which would, in turn, save the owners from incurring huge losses. But some labors misguide the authorities. When a factory was closed in Ashulia, they shifted 80% of the workforce to another factory location, to resume work. But 20% were retained for immediate payment demands. Many factories have been closed down due to compliance issues. We wish to be mission-oriented, in the long run we want to employ as many workers as possible, but some leaders take undue advantage of these situations.

The number of Trade Unions are rising after the amendment of Labor Law last year. What is your take on that? We do not mind if they possess constructive qualities. What they teach workers now is about rights, but not responsibilities. There must be a balance of both. We welcome constructive trade unions. There is a labor arbitration cell in BGMEA now, where orientation programs involving the trade union leaders and factory owners are held.

China is facing the aftermaths of wage hikes: buyers are looking for cheaper options. Bangladesh is their number one choice after China. Is that a blessing or blemish? It is true that buyers come to us for the cheap wages we offer. If our wages rise unexpectedly, then buyers would go elsewhere. Still we have to withstand several hurdles, such as lack of electricity, low gas pressures, political unrest, etc. We have to stay and compete in the global market. After all this monitoring, we hope to clean this industry and enjoy a smooth transition.

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“I am hopeful that based on core test results we would be able to agree on a harmonized concrete strength value.’’ Dr. Ishtiauqe Ahmed, Professor of Bangladesh University of Engineering and Technology (BUET) details about the core issues of building inspections conducted by BUET and the controversial low set values for concrete strength of RMG factory buildings. Edited excerpts:

Please give us an account of the team of Professors who are inspecting the RMG factories. There are about 30 BUET professors all together from Structural Engineering and Geotechnical Engineering background. We also have Professors from other public and private universities. For inspections in Chittagong, we will have some more professors from CUET (Chittagong University of Engineering & Technology) also to enhance our capacity to cover as many factories in the shortest possible time. Under ILO sponsorship, we are doing preliminary assessment of factory buildings in the RMG sector. The objective is to ensure that 46

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DR. ISHTIAUQE AHMED

accidents like Rana Plaza collapse or fire hazard like Tazreen does not happen anymore. Besides structural integrity assessment, BUET is also conducting fire and electricity assessment of those buildings. Faculty members from Mechanical, Electrical, Architecture, Civil and IPE are conducting those assessments.

Who formed these teams of professors? ILO or the Government of Bangladesh (GoB)? It's an agreement between ILO and BUET. BUET formed these teams.

How many factories have you completed inspecting so far? How many of them were found to be structurally flawed? Under the ILO agreement, we have completed so far the inspection of more than 200 factories under the National Tripartite Plan of Action. At present, the assessment we are making is preliminary and based on visual identification of problems. For structural integrity assessment, we have classified these buildings into four categories. The ones coded Green are safe and more than 55% of our inspected buildings are in this category. In the Yellow category are buildings, which have minor structural problems. For example, there are buildings, which were designed as five-storied in the beginning but there had been an extension of one more storey-the capacity shows it is still befitting with the initial design but detailed examination is needed; or say, the structure appears to be sound but lacks proper regulatory approval. We have found around 22% of buildings in Yellow category. In Amber category,

almost similar percentage of buildings we have with conditions worse than that of buildings in the Yellow category. These buildings may have visible distress marks like cracks or are overstressed. Red category buildings are those really found to be vulnerable. They need immediate evacuation and they amount to around 1% of all buildings so far inspected. While examining, to understand if a building is going to collapse or not, we calculate the Factor of Safety -- a ratio of capacity to existing load. Ideally this is around 2, according to our National Building Code. Any building falling below 1.5 is categorized as Amber. There are factories where the owner could not provide us any documents like drawings, design reports etc; in this kind of situation, we suggest to go for Detailed Engineering Assessment (DEA). Buildings under Amber category require DEA within six weeks. Structures having safety factor more than 1.5 fall in Yellow Category. These buildings will not require DEA unless they have special problems like visible structural deficiency like lacking enough beams or shear walls, i.e. absence of lateral force resisting system.

What kind of problems do the Red category buildings have? These extremely vulnerable buildings and may collapse any moment. Some of them have factor of Safety around 1. Are most of them overloaded? Could you please tell us what makes them so vulnerable? Not all of them are overloaded. Most of them are basically built as under-designed. For example, some

if your assumed concrete strength is low, more and more buildings will fall into Red/Amber category. Now we have 1% of buildings in RED category, which may become around 5 to 10% in that case. Also, more and more buildings will certainly be in Yellow category making the overall situation worse. {Emerging Bangladesh} bgcci.com

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Total number of buildings inspected : More Than 200

55% 22%

22% 1%

Safe buildings

Structure looks ok but lacks proper regulatory approval

Have Visible Stress Mark

Should be evacuated immediately

BUET's Color Coding to Identify Vulnerable Buildings

of them have having 10X10 sq. inch columns, whereas the required measurement with a proper design is 12X20 sq. inch. A few of them had extra storeys built above the actually designed structure-the same kind of problems that we saw in case of Rana Plaza.

That is a wrong interpretation of BNBC. BNBC does exempt buildings built prior to adoption of BNBC. But if one has made a change of use in his building, for example, in case of residential building converted into a factory, then the requirements of the code becomes a binding on it.

Tell us something about the location of these buildings, which are extremely vulnerable. Are all of them inside or outside Dhaka?

What would happen to the buildings that had been converted into a factory prior 2006?

The buildings we have inspected so far are mostly inside Dhaka and a few are in the areas surrounding Dhaka, like Savar, Ashulia, Gazipur etc. The latter areas have more purpose made buildings and henceforth more complying with required standards. On the other hand, within the Dhaka city, we have more converted buildings i.e. residential buildings being used as factories. These factories have more problems than the purpose made ones.

Bangladesh National Buildings Code (BNBC) came into existence in 2006 whereas most of RMG factories are housed in buildings made before that year. This is why many fear that buildings built prior to adoption of BNBC are more vulnerable leading to shutdown of 40-50% of our buildings. Do you agree with this?

If that building was built for dwelling purposes but later was converted, then it has to be reviewed as per directions given in the building codes. But if the owner decides to use it again as a residential one, then no change will be needed. So, you mean any buildings that was converted after 2006 should have been corrected, if needed by now. Absolutely. One more provision we have in the building code: if a structure proves hazardous to public safety, it has to be checked by building official and be corrected.

Who would these building officials be? RAJUK (Rajdhani Unnayan Kartripakkha) is the authoritative body to conduct these inspections for Dhaka. Similar building officials are there for other parts of the country.

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DR. ISHTIAUQE AHMED

Has it done any such inspections so far? Well, it does not have the capacity to do it on their own. However, it usually does if a building is reported to have structural flaws. Unfortunately, the organization does not have the capacity and adequate technical manpower. It is impossible for them to keep checking the huge number of buildings we have in this city. And for buildings outside the city, there is a confusion regarding which authority to provide development control permission. It is important that an effective means development control is established through engineering professionals.

Recently there was a claim about an ongoing dispute on the issue of concrete strength set up by Alliance, Accord and BUET. If the Accord standard is followed, around 40-50% of RMG factories will be closed, which sounds alarming. There is a serious information gap in here. All three parties, Accord, Alliance and BUET on behalf of the National Tripartite Plan of Action had a meeting last November to come up with a condition where each and every assessment follows a harmonized set of standards. At that time, the three parties agreed on a level of concrete strength based on BUET's recommendations, as the latter has the better set of knowledge than any other parties about the concrete quality and construction practices of Bangladesh. Someone coming from outside may l not immediately have an idea about the aforementioned things; they will have to collect a lot of data, which fortunately is abundant in BUET as people from construction industry send samples of construction materials to BUET for testing for quality control purpose. This is why we have test results of thousands of samples of concrete in our labs. We have a huge database of concrete sampling, which has been collected over the last 30-40 years. This is why we are confident in suggesting about any number regarding concrete strength that is achievable ordinarily on sites. We recommended and both Accord and Alliance agreed on a level of assumed concrete strength for preliminary assessment. But in such preliminary assessments, without any test being conducted we would not be able to know about the concrete strength of the members of a particular building. Concrete strength is measured in a unit called psiPound Per Square Inch. It means how much load (in pound) is required to crush a concrete area (in square inch) . So, for preliminary assessments, we set up that

value of 2500 psi (as assumed value) in November 2013 for preliminary assessment by all three parties.

Was this for brick aggregate buildings or stone chips buildings? Back at that time, we did not distinguish between brick and stone chips. But of course in case of stone aggregate buildings, it would be more than the assumed value. We thought that value would be good enough to follow for assessments made without testing.. This ordinarily means , if measured, we will have concrete strength of 2500 psi or more, which means we are on the safe side. We also thought buildings having less concrete strength would certainly show other signs of distress; hence, 2500 psi was a good assumed value to start with. Then all of a sudden, both Accord and Alliance changed this value for their inspections and brought it to 2200 and 1500 psi for stone aggregate concrete and brick aggregate concrete respectively in last December. Arup, an internationally reputed engineering consultancy firm, has the responsibility to oversee BUET's inspections on behalf of ILO. The same firm is also making assessment for the Accord. When they came to share their views on BUET assessment in January 2014, they argued that we should not take an assumed value of 2500 psi; instead they suggested we should take a lower value of 2200 psi and 1500 psi depending on aggregate type. . The basis of their argument was brick chip concretes are no better than 1500 psi, as obtained from some results of a few core tests of some RMG factory buildings. We were not ready to agree with their contention. We pulled out a lot of data from our laboratory and argued that our data showed the values would be 2050 psi (rounded to 2100 psi) for brick chips and 2370 psi (rounded to 2400 psi ) for stone. Finally, Arup agreed with us we used these values for BUET's preliminary assessment. But Accord continued to use the lower set of values.

But that's certainly not a harmonious conditions for three parties doing the same thing with a common goal. You are right. It was confusing for us at first, since Arup agreed for BUET to go along with the aforementioned values, why wouldn't they do the same for Accord. Referring to the results based on their collected core sample, the latter was claiming that the condition of buildings were poor and so were concretes used

{Emerging Bangladesh} bgcci.com

COVER FOCUS Concrete Strength Confusion BUET Suggested 2500 psi to be assumed concrete strength for visual inspections (November 2013) Accord and Alliance reduced the value to 2200 psi and 1500 psi for stone aggregate and brick aggregate concrete respectively (December 2013) Arup argued with BUET and suggested to accept Accord and Alliance's assumed value (January 2014) BUET data showed 2400 psi and 2100 psi to be safe assumed value for stone aggregate and brick aggregate concrete respectively (January 2014) Arup agreed with BUET's suggestions and approved the above mentioned psi values for BUET's inspections but not for Accord (January 2014) Alliance Accepted BUET's value for their inspections (February 2014 onwards) BUET trying to convince Accord to accept a value close to: 2050 psi and 2370 psi for the two types of concrete (June 2014)

to make them. A string of bureaucratic discussions ensued. As a committee member of Alliance, I suggested Alliance to follow the same values as BUET was using. Alliance later adopted these values for their February 2014 onward inspections. We are still in discussions with Accord and till now they have come to a value close to this: 2050 psi and 2370 psi for the two types of concrete We are going to meet again soon and I am hopeful that based on core test results we would be able to agree on a harmonized concrete strength value.

Do you agree that if Accord standard are to be followed, 40-50% of our factories will need to be closed down? These are highly technical issues and many people are not supposed to understand these; this is why there is a higher chance of misinformation and misunderstanding. Regarding the above mentioned claim, I would say with lower value of assumed concrete strength, more and more factory buildings would be subjected to further tests and rigorous assessment. We feel that would be an overkill an exercise totally unnecessary. Because if your assumed concrete strength is low, more and more buildings will fall into Red/Amber category. Now we have 1% of buildings in RED category, which may become around 5 to 10% in that case. Also, more and more buildings will certainly be in Yellow category making the overall situation worse. That's another reason we are still arguing and trying to set up a harmonized standard with a reasonable value. There is no denying in the fact that till now our construction practices has weakness: in some cases, there is no engineering monitoring or supervision. But this

definitely doesn't mean all our previously made buildings should be marked Amber or Red based on assumed concrete strength while they have a long history of satisfactory performance.

Those 1% buildings in Red category, how much time would they need to fix the problem? It depends on the nature of the defect. Since the buildings were found in vulnerable condition, first it had to be evacuated. Then, Detail Engineering Assessment (DEA) would have to be done to find out the probable area of concern to pinpoint how to proceed, i.e. whether all the columns or a few only require strengthening.

Have you done any DEA so far? What did you find out through these DEA? Besides inspecting more than 200 buildings under ILO, , BUET team have inspected some more than 200 other factories at the request of the factory owners, of which also 1% was in RED category. It started in May 2013 as the factory owners needed to show safety certificates to their buyers and they rushed to us. The DEAs we have done so far are for factories examined under independent inspection by BUET. Around 20 DEAs have been so far completed and more are in the pipeline. These entire set of buildings fell into both Yellow or Amber category and one or two needed immediate evacuation.

By when do you expect to finish inspecting all the factories under National Tripartite Action Plan? By the end of next year, insha-allah.

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“With the help of workers who are organized and productive, Bangladesh can continue producing millions of products for its buyers.” Alonzo Glenn Suson, Country Director of Solidarity Center (American Center for International Labor Solidarity) speaks about the positive changes ushered in the area of Trade Union and how Bangladesh can build a better image in the world increasing its workers' productivity. Edited excerpts:

Tell us something about your organization, Solidarity Center? Solidarity Center is the International Affiliate of the American Federation of Labor (AFLCIO). We have 53 programs with offices in 27 countries from Latin America, South America, Africa, Europe, Asia and South East Asia. We work in these countries to promote labor rights and democratic unions. That's how the name “Solidarity Center” originated. We believe trade union (TU) rights are the part of democracy. We try to ensure freedom of association and collective bargaining for workers. {Emerging Bangladesh} bgcci.com

ALONZO GLENN SUSON

What was your impression about Bangladesh's labor right movement when you came here four years ago? I was stationed in Cambodia before coming to Dhaka. The amount of population Cambodia have is available in Dhaka alone; also the country has only 300-400 RMG factories, whereas Bangladesh has 10 times of that number of factories. I hoped there would be a good number of labor unions active but as per our survey done at that time, out of 136, only 7 TUs were active. But in Cambodia, around 65% of the total number of RMG factories had TUs. In comparison to Cambodia what we found here was pretty shocking for us. Initially we started to work in three industries: the shrimp industry, Export Processing Zone (EPZ) and RMG industry. Then we have shifted our focus to RMG industry as we believed other industries would be encouraged if TUs flourish in RMG as that's the biggest private sector.

What was the condition of those active TUs at that time? They already had units for collective bargaining. There were several federations. The biggest one was BIGUF. We found that 45-50 registered and unregistered federations were there. It showed that a big disconnect was prevailing since among the many federations, only 7 factory level unions were actively functioning.

What was the reason behind such disconnect? According to the Labor Law, two or more

unions come together and form Federations; that explains of the number of federations Bangladesh had at that time. It was 2002 and what happened is some of the factories moved out of Dhaka to Savar or Ashulia. Whenever this kind of things happened, the unions got busted as that resulted in change in the whole set up of workers. Another way of busting unions is terminating the trade union leaders from the factories. Other reasons that ushered the termination of TUs were companies going bankrupted, TU leaders being bought up or being promoted to senior supervisory posts, etc. In short, organizational capacity building to thrive the culture of TU was totally missing at that time. Then by the year 2004 or 2005, formation was TU was made forbidden by then law, which was lifted later. There was no previous record of registration of TUs. In many cases, the registrations were being rejected by the government or leaders of the TUs were terminated-which mostly discouraged exercising the activities of TUs.

Post-Rana Plaza disaster there is a surge in the formation of Trade Unions in Bangladesh RMG sector. Is that a good sign? This is certainly a good sign. But we have to ensure the sustenance of these unions. The more the number, the better the chances of survival of Trade unions. This is an important factor behind the growth of TUs. Another important thing is there has to be a level playing field. There are compliant factories who are

â&#x20AC;&#x153;it's true that most of the workers are young; it's true that many of the TU leaders are women and their education level is not highbut it's also true that they are smart, have a lot of energy and learns quickly. This whole practice is going to put them on equal footing with the rich owners of the factory or educated managers.â&#x20AC;? 52

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spending more for compliance and wages; whereas there are companies who are doing the opposite. Now the BGMEA should take a strong stand to create this level playing field to encourage more and more companies to become complaint. In that case, provisions like labor unions will prosper. Also, we need proper implementations of the Labor Law. On the flip side, if these labor unions are functioning, then they can organize workers in a better way-not to call for a strike or engage in subversive activities, but to work together for better productivity.

What do you think of the amendment of the Labor Law that was done last year? There are some good sides. Including the health and safety issue is surely praiseworthy. Generally, the Bangladesh Labor Law is a good law. In areas like Profit sharing or Freedom of Association, certain issues are yet not very clear. But what concerns me most is the implementation of the law. Also, the Labor Ministry has to be stronger than ever and the Labor Court has to be active to take action against the previously mentioned 20% of cases, where serious violation of labor rights has occurred.

Now that Accord and Alliance are inspecting factories, ILO is working to train up workers about their rights and responsibilities. If everything goes in this promising pace, what do you think how long will it take to achieve a good atmosphere in our industrial sector where TUs can thrive and ensure rights of all labors? It's a long process and I am glad that it has started. But I am still concerned about the registration process of the unions. Because of the prevalence of corruption in various levels of administration, we have to think about this issue. All Accord, Alliance and NTPA have set a time frame and that is five years. Now in the area of labor rights, if we work properly

throughout the five years, it's possible to achieve what you mentioned in your question. There are five units of collective bargaining in the RMG sector right now. The victories achieved by TUs recently were simple in nature, for example: drinking clean water, not something from a toilet; or getting their salary every month on right time; or getting the right amount of maternity leave that is written in the Labor Law. These are their basic rights and now that these are being ensured, it's a big deal for the workers: they are happy. As a result, this will increase confidence among the workers as well as their leaders. There are various types of discussions going in among the workers, leaders, factory owners. However, it's true that most of the workers are young; it's true that many of the TU leaders are women and their education level is not high-but it's also true that they are smart, have a lot of energy and learns quickly. This whole practice is going to put them on equal footing with the rich owners of the factory or educated managers. Therefore, if this practice sustains, then definitely we are going in the right direction and further big achievements are possible. And if you consider the case of branding Bangladesh positively in abroad that it's not full of cheap sweatshops, you will also need the help of these trade unions. Because with the help of workers who are organized and productive, Bangladesh can continue producing millions of products for its buyers. As we all know, Bangladesh is looking forward to moving up the value chain to produce higher value of clothing. To achieve that we have to change the way the workers work.

What is Solidarity Center doing right at the moment? We are assisting workers and federations organize Trade Unions. The last 15 monthsâ&#x20AC;&#x2122; data showed us that 9 federations working most actively and we are helping them financially to carry on their work. Out of 55 federations, who will the factory owners deal with? They will work with those who have the utmost reach to the workers. We are working in that area: we are helping in capacity building of these federations.

{Emerging Bangladesh} bgcci.com

ALONZO GLENN SUSON

Organizing Trade Unions in the RMG Factories 2010-2014

Organizing Trade Unions in 2014

Organizing Trade Unions Information as per Federation

Name of the Federation

Total

Total Pending Union

Total Registered Total Rejected Total Withdrawn Union Union Union

162

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Total Union Submitted

240

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â&#x20AC;&#x153;The whole world is watching us very closely. If we can carry out the independent inspection and remediation process, then it would increase the credibility of Bangladeshi RMG sector in the eyes of the brands.â&#x20AC;? Roy Ramesh Chandra, Secretary General of IndustriALL Bangladesh Council shares with us his notes of optimism about the Accord and Alliance inspections and why the findings and corrective measures can change the image of our RMG industry in abroad. Edited excerpts:

Both Accord and Alliances have been doing inspection. What's your take on the findings of these inspection? Accord is a global trade union federation, on terms with 174 buyers/brands. We wanted to make the buyers accountable because they reap the maximum profits from the global RMG supply chain. So in order to keep the Bangladeshi RMG industry safe and sustainable in the long run, they need to invest a portion of their profits over here. After the Tazreen fashions and Rana Plaza incidents, the industries came to a bilateral agreement. The Alliance did not want to come to any legal bindings, rather be independent and voluntary like Accord. After {Emerging Bangladesh} bgcci.com

ROY RAMESH CHANDRA

the Accord inspections, the industry is sure to benefit from it. After the Rana Plaza tragedy, the Bangladeshi RMG sector was subjected to negative images, saying that they were unsafe workplaces; workers were giving their lives on a regular basis, etc. As of the inspections done so far, 19 factories have been shut down temporarily, but in 7 buildings in total. So one building contained multiple factories. This is less than 2% of the entire factory volume, and dispels the unfair negative brandings. The Accord mandate states that the first party to guarantee workers' wages after factory shutdown falls on the owners' shoulders. But from trade unions, we want the buyers to help the owners who inevitably face a harsh financial crisis once his factory shuts down. We want them to come forward. The brands have to help out, discussing with their supply chains. The Alliance is willing to pay one month's wages to help things, but what we demand is at least 6 months' wages. Secondly, after all this, after all the inspections, the brands have agreed not to pull out their existing contracts in Bangladesh for the next five years, especially the signatory brands. This guarantee is a boost to the industry. After the inspection, if repair work needs to be done, then the buyers will have to come forward, talk with their suppliers and provide financial support by increasing production volumes, ensuring soft loans from brands and direct investments in the form of cash incentives. These inspections are independent 3rd party inspections, so there is no room for biasness in any manner. Previously, some factories' owners had paid BUET engineers to have their factories inspected. Initial fear is there currently among the industry owners and workers, but this will not last. The whole world is watching us very closely. If we can carry out

the independent inspection and remediation process, then it would increase the credibility of Bangladeshi RMG sector in the eyes of the brands.

There is still an unresolved issue of who is going to pay for the compensation of workers. Based on what we have, almost 14,500 workers have been displaced, but their wages are being paid, with the owners paying. Our demands are very clear, the workers must be paid. There have been some instances, such as Jeans Care in Tejgaon, which reopened in 3 days. There are other instances, such as Softex in Mirpur--Accord inspectors had instructed them to reduce the loads. The owners got panicky and decided to move out of the rented building. The buildings owned by owners, meant purely for RMG factories, are not seen to be vulnerable. Rather it is the shared buildings, the rented/leased buildings which are shown to be more vulnerable. The Accord engineers identified and inspected the risky, vulnerable buildings during its initial inspections.

Do you think the standards being followed by Accord and Alliance for structural integrity and fire safety is too high benchmark for Bangladeshi factories? Recently the government has halted shutting down of factories. Engineering is a science. Buildings are made in such way that the structural mechanics are global. The Bangladeshi national building code is up to date; with 95% of its mandates are common standards across the globe. What Accord engineers are instructing is for installing fire safety measures and sprinkler

If the international community and the government can improve the union officials' skill development, capacity building, raising the issue of collective bargaining, we can have an integrated plan of action to educate these leaders. 56

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systems, which is very minor. In no way can Bangladesh afford another Tazreen tragedy. If we are to increase our international production, we need to do this much. The Accord is not closing down factories. If they sense imminent dangers, they file their reports to the review panel, where 4 engineers and 2 officials can see into it and refer to the government, who is the only authority to close it down. Regarding shutting down factories, probably the scheduled review panel meetings did not take place. What Accord would do is close down the signatory brands' producing factories. Brands must acknowledge consumer concerns. If they do not save the industry, then there is no point keeping it. Hence, remediation is necessary. GSP is revoked in the US, with the EU lurking soon. If by any negligence the EU's GSP is revoked, it would simply bring the industry down. Some greedy factory owners cannot be the basis of risking an entire industry.

There is a boom in the number of trade unions in Bangladesh. Is that a good sign? The first objective of the trade unions is to guarantee the workers' constitutional rights. According to the ILO convention and the labor laws, they have the right to do that. They did not have this right till now, as previously the government and the factory owners did not believe in their existence. The fact that many unions exist now is not agreeable. There are over 5000 factories, whereas there are only 146 unions. So in this rate, it would take at least 40 years to put one union in each of the factories. After they came into being, there has been no incident of worker unrest. Hence, if trade unions can come up with constructive activities, then it would increase factory productions and decrease workers coming down to the streets for their rights. But it is true that they are not educated about their rights and responsibilities. Unions are institutions for workers' democratic processions. If you did not learn in school then how can you teach? If the international community and the government can improve the union officials' skill development, capacity building, raising the issue of collective bargaining, we can have an integrated plan of action to educate these leaders. We have to substantiate the implementation of our laws. If the government can get rid of the obstacle in the way of the trade unions, which are often brought by the owners, then the unions can progress at their natural speed. The government has to be neutral at all point, as well as upholding their international commitments.

Some people are saying that the government should take ownership of the factory inspection. What's your take on that? There is no need to create ownership in this regard. It is

the state's responsibility from the very beginning, ensuring the safety and security of their people. If the government had properly enforced the national building codes, or taken care of the vulnerable buildings, then these questions would not have arose. In the case of Tazreen garments, there were chemically contaminated fiber wires in the circuit box. It would have only taken a second to ignite fire if there was a spark. In Rana Plaza, there was a 9-storied building on a five-storied approval. Cracks were found on the previous day, steps were still not taken. It is only after the relentless failures of the state mechanism that the Accord and Alliance is here today. It was the state's duty to take care of them; it's the state's failure that forced them here. There is no guarantee that an accident will not occur after a factory inspection. But this will take care of the misconceptions about our RMG sector internationally.

Last year the wages of the RMG workers were raised significantly. Do you think if this continues, the wage hike will deter buyers to move out for cheaper destinations as it has happened in case of China? In China, there have been wage hikes, their government does not want to keep low-waged industries, their incomes are increasing, balancing it with their living costs and such. In our country's wages, it has increased by 77%. But it is not adequate till now, where it should be $120. But their actual wage has gone down, thanks to price hikes, utility/rent, etc. The sister industries also are affected from this wage hike. If 440,000 workers in a year can buy a pair of sandals, that explains how many they are buying. But in a field of 5000 factory owners, they buy them from Thailand, Singapore, Italy, etc. The workers' spending capacity affects our local industries to a great deal. Their wages are only 12% of the total RMG costs. If this can be made feasible, then double wage hikes will not affect the entire mechanism. Despite rumors where buyers are not paying much to the owners, they must find a way to compensate their earnings from the remainder 88%. If the owners do not hire foreign personnel in the place of Bangladeshis, send them by Economy class instead of Business class, reside in a 3-star hotel instead of a 5-star while business visits, then this cost-effectiveness can take place. The government can provide infrastructural support in this regard as well, through utilities, transportation, etc. The wages are still very low here. China covers 38% of the global RMG market, whereas Bangladesh covers merely 4.8%. So there is no room for decrease in our market sales, but in order to increase, we must have the necessary infrastructural support. The recent EPB report stated a 20% increase in RMG business.

{Emerging Bangladesh} April - June 2014

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â&#x20AC;&#x153;The factories, which are compliant and safe, should receive more state benefits.â&#x20AC;? Sultan Uddin Ahmmed, Assistant Executive Director, Bangladesh Institute of Labour Studies (BILS) speaks about the progress Bangladesh has made in the area of workers' right after the Rana Plaza disaster and his musings on the Accord and Alliance inspections. Edited excerpts:

After one year of Rana Plaza, what is the status regarding the progress in workers' rights? The Rana Plaza devastation has been the result of years of mismanagement and negligence. Therefore, fulfilling worker rights in a year is difficult. What was required was to take rapid initiatives, some were made, but most were not taken, i.e compensation and rehabilitation of those affected by the disaster. Nobody can say clearly that compensations have been handed out in full. Only in Prime Minister's Relief Fund has there been few records of more than 900 victims receiving 58

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SULTAN UDDIN AHMED

some sort of compensation or support from the government, that too from BDT 0.1 million to 1.2 million. But whether they were in the form of compensation or rehabilitation, it is not made clear. This implies that we could not protect all the families affected by the disaster. This is a big failure in many eyes, as the missing ones who suffered the most in this tragedy, and the ones who died, we could not save them or help them at all. Second failure would be the lack of progress in giving compensations. If we had fixed the minimum workers' wages at BDT 6000, then even those who were slightly injured or not injured at all, could return to work in three months time, thus we could compensate at least for one year two maintain the livelihood of the family. In an average we had found out that the families whose wage-earners had died, engage to search the loved ones. So the first responsibility was to give at least three months' wages to those who lost jobs and continuous monthly wages to those families where there was a death till they received compensation. Then we would have been able to say that there was progress. But now there is more empathy involved, with too many parties donating at random. But their donation money is not reaching to all the workers. The ones who were able to collect their support were the only ones benefitted from all this. Secondly, no family assessments were made on those whose money and times were wasted in finding their loved ones. Third is the issue of security, due for which both the Accord and the Alliance were formed. There have been initiatives from this

aspect, but in my opinion, there has been a lapse. Efforts to strengthen laws and safety inspections in factories should have been made before the Tazreen garments blaze or the Rana Plaza collapse. We have been hearing for the last 15 years that big corporations around the world conduct their own social audits, but they don't have any accountability for their actions. Today the ones who made any sort of social audits for Tazreen garments or Rana Plaza are beyond accountability. We are doing the same. The factories that both the Accord and the Alliance are calling structurally flawed, what would happen if they close down?

Do you think that the Department of Inspections for Factories and Establishments (DIFE) should be strengthened? Everything has to be under their umbrella. They have been upgraded, but their lack of manpower is hindering their progress. There should be a proper committee structure so that they will be accountable to tripartite committee. The labor task force is working vigorously, but not heard around anywhere.

Accord officials are retorting by saying that it is a misconception that they are responsible for the closure of factories. Theoretically, they are correct, but practically they are closing factories. The moment they are informing the brands of its structural or other risks, the client companies or their brands

If we had fixed the minimum workers' wages at Tk. 6000, then even those who were slightly injured or not injured at all, could return to work in three months time, thus we could compensate at least for one year two maintain the livelihood of the family. {Emerging Bangladesh} bgcci.com

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immediately informs the factory owner to close down. Nobody actually waits for the red tape formalities to take place. The reality is quite different. The Accord brands give contracts to those factories where hundreds of brands outsource their productions. If you rule out brands from the Alliance and the Accord, not many brands are left, so the factories must close down. The first dozen cases which the government had assumed that the factories contained Accord and Alliance brands were closed down, and the next dozen were cases where they assumed that the brands were not in production. So the state of assumption must be ruled out. The process is not undertaking through any legal framework. The foreclosures must be done legally. If any worker is displaced due to factory closures, then laws dictate that a worker of more than 10 years in employment will receive monthly 1.5 wages for his/her service years, and must be given 4 months of notice in advance, despite sudden closures. The owners have to pay for all this. Despite their ignorance, they cannot avoid this responsibility. They can ask the government for subsidy or any other means. The moment a worker is laid off, he/she must be paid all her dues within the next 7 days. It is ludicrous to think that both the owners and the government are going to rely on the Accord and Alliance and accept that they will do everything for them. The factories, which are deemed unsafe and risky for production, had been built illegally in the first place. After Rana Plaza, the illegal factories and their owners should be penalized. But the reality is that everyone is tuning with what they are

saying that the brands are not paying the workers their wages. Corruptions one year after Rana Plaza tragedy is unfortunate, that trade bodies are speaking on behalf of those unscrupulous factory owners. Loopholes in the law are providing benefits to those owners on whose premises the bodies of more than 1135 dead workers had piled up. They are rallying up support for receiving monetary benefits, as their factories would have to be closed down. The factories, which are compliant and safe, should receive more state benefits. Ones who have minor risks, support can be given to them to make them risk-free giving penalty wages through subsidy. But there should be no debate on the most risky factories their workers should be paid their dues and everything else be done in due diligence.

As workers are deprived of their rights, have you received complaints from trade unions or taken part in any mitigation regarding this? Mediation or mitigation is not in our legislation, but we are active and vocal about their concerns.

The question regarding putting the injured workers or affected families in financial safety nets is yet to see the light of day. Why is that? The same cause for which we could not prevent the Rana Plaza tragedy. We have not learned anything from it, let alone educating our workers. The government has not taken action against the owners. Their membership in BGMEA and legal license should have been revoked. But the last disaster has inspired some degrees of initiatives. The ones who are abusing labor rights must be brought under legal jurisdiction, something which only the government can do.

If a BUET team gives approval at a building and a catastrophe happens afterwards, we cannot sue the team that inspected the building. There is a state department for this, but nobody knows about this. 60

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If any worker is displaced due to factory closures, then laws dictate that a worker of more than 10 years in employment will receive monthly 1.5 wages for his/her service years, and must be given 4 months of notice in advance, despite sudden closures. The owners have to pay for all this. Despite their ignorance, they cannot avoid this responsibility. What are the challenges that may be encountered regarding the screening of false or double identities? The question lies about the status/future of the 11 bodies whose DNAs did not churn out any result. Departments must be made responsible for all the activities. Government offices should be set up for better accountability. If this does not happen, problems will go on. Brands like Primark had donated to 3600 of their workers their compensations of wages worth 9 months. If brands can, then why not the government? This is why the safety net was necessary. The injured workers are still clueless as to their futures as far as compensation is concerned. International bodies' promotions are such that the workers have received full compensation, which is why the yield to stand beside the workers and fight for their rights has become dim.

What about the lackings in social audits? The audits were made but not conforming to the rules and regulations of the law. There was no accountability of the companies involved in the matter. They are out of the radar currently. If a BUET team gives approval at a building and a catastrophe happens afterwards, we cannot sue the team that inspected the building. There is a state department for this, but nobody knows about this. The closure of half a dozen factories and non-closure of the latter half dozen implies that the decisions are taken at the behest of someone/a group's interest. How can both Accord and Alliance work when one is paying half the compensation it should and the other not paying at all?

There is a surge of trade unions, not witnessed before. Do you think they all

should have an integrated approach? The worst part was the non-existence of such unions beforehand. It is imperative to let it grow. The mushrooming of the trade unions is unhealthy, but necessary as there was none in earlier times. Someone has to fill that void. There will be anarchy, but I agree with the BGMEA president to educate the union leaders and inform them about their rights and subsequent practices. There are industrial education schools regarding this in Tongi. Forming is not enough; they need to maintain organizational structure, official structure, collective bargaining for workers' rights, etc. They have to convince the workers into making them believe that they are fighting for their rights. If they function properly, then expansions can be there. It is not agreeable that factory owners have to maintain communication with the workers, only after being instructed by the American government. Unions must be formed out of need. Secondly, the union leaders must realize that they had to be formed due to long struggle of trade unions, global pressures and demands. They must be kept active, go in collective bargaining. Contracts must be rolled out for educating them.

Do you think sustainable growth for workers rights is foreseeable in the near future? If we have to ensure minimal worker rights such as notice before layoffs, proper pay hikes, etc, this has to be done initially through the government. The labor department keeps tab of complaints filed by fired workers, but no such databases are kept to monitor related activities. A spark is enough to agitate the RMG industry and negative branding. Union processes must be taken seriously, in factories and in the tables of factory owners. There must be ownership regarding this. Lastly, lawbreakers must be brought to justice regarding their wrongdoings in the industry. Lack of proper national mandates such as databases, compensations, etc must be established.

{Emerging Bangladesh} bgcci.com

COVER FOCUS

BSCI CONTRIBUTES TO THE IMPROVEMENT OF SAFETY CONDITIONS IN BANGLADESH FACTORIES Bernardo Cruza Cruza, the Chair of BSCI Steering Committee briefs about how

or more than a decade, the mission of the Business Social Compliance Initiative (BSCI) has been to support companies in their commitment towards improving working conditions in their global supply chains. Its new Code of Conduct aims at setting out the values and principles that BSCI participants strive to implement in their supply chains. Respect for human rights and protection of workers stand out in the set of fundamental rights at work as established by the International Labour Organization (ILO) conventions, declarations of the United Nations (UN) as well as the guidelines of the Organization for Economic Cooperation and Development (OECD). The mind-set of European entrepreneurs has changed radically in the last decades. They have very different notions about the role of their businesses. Social responsibility is now embedded in the daily business operations. That provides scope for broad, fruitful and close partnerships, in which the interests of our businesses and of society at large converge. Companies behaving in a responsible manner conduct due diligence. It is the expectation of society and public authorities that businesses actually know what goes on in their value chains, that they ensure human and labor rights are

upheld throughout the production process and that they take action when negative impacts are identified. Many companies sourcing from Bangladesh have taken their share of responsibility. Technical inspections of factories has thus become a new requirement for doing business in this country. 175 companies have signed the Accord on Fire and Building Safety in Bangladesh. Among them 40% are BSCI participants. But the Accord is not the only initiative; a group of North American apparel companies have launched The Alliance for Bangladesh Worker Safety, while the Bangladesh government has agreed the National Tripartite Plan of Action on Fire Safety for the Ready-Made Garment Sector in Bangladesh. We need therefore to look at the bigger picture. Implementation of these schemes will only be successful if the joint goal is to be met. In many cases, signatories to the Accord and Alliance share the same factories. Cooperation and coordination between the three initiatives is to be regarded a key success factor. Eventually, the ultimate goal should be that ownership of monitoring the safety of working conditions in the RMG sector lies with the Bangladesh government and thus with the National Tripartite Plan of Action on Fire Safety for the Ready-Made Garment Sector in

{Emerging Bangladesh} April - June 2014

Bangladesh. Structural improvements can only be guaranteed if the Bangladesh government plays its part and takes responsibility along with factory owners. BSCI participants can contribute to this process by making sure their trading partners implement the corrective measures as identified and the BSCI Code of Conduct is strictly respected. BSCI has placed added focus on its system, by reassessing and adapting its approach towards health and safety criteria. It has also improved the alert system that notifies companies when critical non-compliances have been identified in health and safety chapters. Training activities have been developed in cooperation with WRAP to place more emphasis on fire safety standards. In addition, a substantial number of BSCI participants have joined a newly created Working Group to share their best practices on the ground. But for a sustainable change to take place, BSCI has called on all stakeholders to continue fruitful cooperation, especially national authorities. The Bangladesh government should create the appropriate regulatory framework to fulfil its obligation to protect human rights and ensure workers' rights. The new Labor Law adopted in June 2013 means a new step to give workers the protection they need. In addition, BSCI has engaged in intense discussions at political level with representatives of the European Parliament and the European Commission in order to get support for this process. Dialogue has also taken place with local stakeholders, as their involvement is essential to remediate non-compliances often linked to economic or cultural issues in specific sectors or at national level. With such a purpose, BSCI has organized for years local stakeholder Round Table meetings in Dhaka, where discussions of particular national relevance are held. The last Round Table in March 2013 addressed the Bangladesh National Action Plan on fire and safety as the main topic, along with others such as freedom of association and fair remuneration. Finally, BSCI has also welcomed in a statement the Rana Plaza Compensation Arrangement and has invited its members to contribute to the International Donors' Trust Fund that was recently established by ILO, as the Trustee, to compensate the victims and their relatives affected by the Rana Plaza tragedy according to the international standards under ILO Convention 121. BSCI helps to put social compliance and due diligence into practice. A correct risk assessment raises awareness over potential issues in the supply chain related among others to human rights abuses, wages or corruption. To this end, we closely follow up the situation in Bangladesh, undertake the necessary actions in the framework of capacity building, monitoring and stakeholder engagement and inform our participants accordingly. We all pursue to achieve real and sustainable improvements in Bangladesh and provide its workers a safer working environment.

Bernardo Cruza, the Chair of BSCI Steering Committee

The new Labor Law adopted in June 2013 means a new step to give workers the protection they need. In addition, BSCI has engaged in intense discussions at political

level

with

representatives of the European Parliament and the European Commission in order to get support for this process.

{Emerging Bangladesh} bgcci.com

FEATURE

Why Bangladesh needs its own unique approach to factory safety Here are six reasons

Vulnerability

r ty ve Po

{Emerging Bangladesh} April - June 2014

t en d i c

Though Bangladesh and other Asian countries have been seeing recurrent fire and building collapse events in recent years, the fire at Tazreen Factory in 2012 and the collapse of Rana Plaza in 2013 triggered intense conversations and some action on making Dhaka's garment factories safer. While the international outcry and pressure has been useful, it has been argued that hitting at the factories through boycotts or relocating businesses to other countries will only hurt the millions of poor workers worst. Efforts therefore have focused on formation of alliances of the buyers and stakeholders involved, and steps towards safety assessments and corrective actions based on international experiences and expertise. The ground facts however indicate that the garment factories in Bangladesh require a unique approach to safety, since they are set in a context very different from the industrial contexts that standards and norms perceive. Anshu Sharma tells us why.

1. Low literacy among building occupants

2. Untrained construction workers

About four million men and women, a majority of them illiterate or semi-literate, work in the factories. They have low capacity to absorb detailed and complex training, and standard operations procedure based drills. Most of them can barely understand the policies, procedures, evacuation maps and signage installed in factories as mandated by various acts and protocols.

The construction work force is comprised of largely illiterate and almost entirely untrained masons, fabricators, carpenters, electricians and plumbers. They have learnt their trades on the job, starting their professions as apprentices to some relative who they joined on their arrival in Dhaka from home villages. No matter how qualified the architects and structural engineers who prepare building drawings, they do not translate into safe buildings because most construction workers cannot read them. Upgrading building codes and bringing in more stringent norms is therefore not of much use.

Options: Intuition based response and evacuation plans, gradual build-up to safety concepts starting from cultural shifts and basic actions, and steadily moving up to complex team responses. Unique communications design for information, education and communication.

3. Semi-engineered buildings About 5,000 garment factories dot Dhaka's periphery. Many of these are multi-storeyed buildings going above ten floors in height, while many others are in rented floors of different kinds of multi-purpose buildings modified and adapted to house factories. While they may appear to be reinforced cement concrete structures an established building engineering typology, the way they have been constructed with ad-hoc foundations, poor construction quality, and incrementally added spaces and loads makes them more of semi-engineered

Options: A very intensive program on training of construction workers on safe construction practices and building retrofitting. Institutionalization of such programs in universities and industrial/vocational training institutes. Quick, short term mason training programs in the interim.

buildings. Since very few of even the best ones have proper layout plans and structural drawings that were prepared before building construction, it cannot be said with confidence that they meet structural safety standards. Their electrical systems are usually in a mess, as they have grown incrementally and electrical networks are built over a series of temporary extensions by untrained hands. Many of them are in residential or mixed land-use areas, opening out into very narrow lanes where it is hard to evacuate and assemble the large number of workers inside at any given time during a work shift. {Emerging Bangladesh} bgcci.com

Options: Fix the low cost ad-hoc problems on an urgent basis through a few sweeping decisions and actions like replacement of temporary electrical fixing with permanent ones. Establish a protocol of watch and ward for structurally weak areas that cannot be fixed immediately. Prepare customized, simple and intuitive emergency response plans, and train workers accordingly. Assess and retrofit to the extent possible. Abandon the most unsafe structures.

A handful of experts, mainly from the engineering universities with an already existing workload of academia, have been the backbone of these assessments, which have largely been of rapid visual nature as there is very little available expertise or equipment to meet the need. Needless to say, the capacity to take corrective action through structural retrofitting is equally low since this is not an established discipline or profession in the region. 4. Combination of poverty and vulnerability The factories operate on very thin margins in order to meet the low price points for brands and shoppers. The crunch is felt hardest at the level of workers with wages that even after a recent increase of 77% are very low at USD 68 to sustain a family in Dhaka. The poverty translates into vulnerability at home through risky dwellings, temporary electricity lines, low nutrition, unhealthy water and sanitation, and an overall low quality of life. Options: The safety approach to include off-site plans covering living and activity areas of workers, addressing multiple layers of vulnerability. Improved education opportunities to be provided to workers and their families as part of long term risk reduction measures.

5. Low incentive to factories to upgrade safety measures Factories are working on thin margins, but increasing work orders. There is less investment happening on improving conditions of existing production capacity, but much more is happening on adding floors, lines and machinery. Brands and buyers are also incentivizing capacity expansion much more than safety improvement. Safety, on the other hand is seen in a compliance and audit regime, with only mandates and no incentives. At the same time, there is also loss through low productivity in the lines leading to less than capacity production, and poor quality controls leading to high rejection rates. Options: Incentivize safety and link it to 5S and lean manufacturing, so that factories see a business case in safety.

6. Very low capacity to assess and correct buildings The flurry of activities to assess structural safety of factory buildings that took place after Rana Plaza collapse exposed the very low capacity in the country to carry out such assessments. A handful of experts, mainly from the engineering universities with an already existing workload of academia, have been the backbone of these assessments, which have largely been of rapid visual nature as there is very little available expertise or equipment to meet the need. Needless to say, the capacity to take corrective action through structural retrofitting is equally low since this is not an established discipline or profession in the region. Once again, while assessments and retrofitting design may be carried out with imported expertise in coming times, the local construction workers will have very limited understanding of retrofitting designs and the technology to execute them. Options: Immediate establishment of systems of surveillance, maintenance and response in structures so that early signs of trouble can be detected and responded to, avoiding Rana Plaza kind of disasters. Specifications and codes for structural assessment and retrofitting to be made available in easy to understand formats, and to be included in training and capacity building for local construction supervisors and workers.

On the whole, the safety efforts are still a knee jerk reaction to Rana Plaza collapse, while the need is to take a multi-hazard approach in one go. Dhaka, its duty bearers, its factories and its citizens also need to prepare for an overdue earthquake before it strikes. A holistic approach with a comprehensive emergency management system ranging from multi-hazard assessments, corrective actions, planning, standard operating procedures, training, practice, plan review and revision, and wide-spread education is the only way ahead, but to be successful it needs to be very Bangladeshi from the word go. The author is a Board Member of SEEDS India and can be reached at anshu@saferworld.in

{Emerging Bangladesh} April - June 2014

FEATURE

Safety First, At Any Cost Sifat Ishtiaq Hossain takes a look into the fire and electrical safety issues in Bangladesh RMG industry

Over the past few years, RMG sector to more meaningful changes in the instruction for emergency evacuations in Bangladesh has suffered from a garment sector and the broader in the gangway etc. number of major accidents in various economy. Investors' main motive is to prevent factories. On November 24, 2012, a pilferage, but they go for easy profit Causes of Fire Outbreak fire broke out in the Tazreen Fashion with the sweat of those Common causes of fire have been factory in Dhaka, presumably caused underprivileged people who pay the worked inside-out several times, but by an electrical short circuit. At least price in their lives. The other reasons any serious attempt was hardly made 117 people were killed in the fire, the that are identified by the fire-fighting to rectify the fatal mistakes. The largest number of casualties ever in units after occurrence of fire at common causes are improper Bangladesh due to an inferno. Then on different buildings are unauthorized maintenance of fire prevention system, April 24, 2013, the collapse of another construction of building bereft of inadequate fire-fighting equipment, building, housing RMG factories, the National Building Code, improper excessive machinery and manpower Rana Plaza commercial building in the storage of goods without following the beyond the capacity, insufficient greater Dhaka area, caused a death toll appropriate rules and plan, lack of gangway in the floor for the emergency of 1,129. As an immediate result of adequate ventilation, rooftops door evacuation, inappropriate narrow and these disasters, the Bangladesh RMG lacking, improper wiring and electrical risky alternate exits, lack of continuity industry and government, aided by design, illegal connection, large in the alternate exit chains, lack of international support and pressure, illiterate working force increased their efforts to without any fire training and improve the standard of drill, lack of water in vicinity, safety in this industry. To put it concisely, in the garments use of combustible materials Given the constant pressure for finishing and interior factories fire is usually generated to lower costs and the works, no trained in-house dearth of meaningful from: personnel to take action in government oversight, 路 Heat fluxes in the vicinity of ignition case of fire or any other businesses are continually emergency, blocking of stair tempted to reduce costs at sources (fuel) cases with goods and the price of worker safety. 路 Igniting objects e.g. matches, material and combustible Worker deaths are not new goods in factory floor in Bangladesh, and while burning paper & cigarettes, gas they have led to making it in all a dangerously burners, etc. recriminations and some combustible factory ship. important changes, fires 路 Electric spark, electric short circuit, and other tragic accidents Factory inspections of heating element of machines or continue. The question Accord producing facilities mechanical friction today is whether the scope designed to identify fire, of the Tazreen tragedy was electrical, and building significant enough to lead structural safety risks are an {Emerging Bangladesh} April - June 2014

1.21 0.9 1.87

Electric Fault Kitchen Fire Cigarette Naked fire Burning Ash Fire Works Friction of Machine Incendiary Mob Unknown Misc

{Emerging Bangladesh} bgcci.com

FEATURE integral component of the Accord requirements. As expected, Accord inspections are identifying safety risks in all three areas. Many of the findings, such as reducing weight loads and adhering to load management plans, can be easily corrected and do not involve significant costs. Other findings are a matter of cleaning up, organizing, and then being disciplined in maintenance practices. These include properly connecting and sealing electrical wires and keeping wires and circuits free of dust and lint. Other findings and safety requirements involve more substantial costs. For example: installing fire doors, automated smoke detectors and fire alarm systems, and establishing fire protected egress from factory buildings. During the course of the first 250 factory inspections, Accord structural engineers have identified critical findings in 8 buildings. The findings were of a structural nature

and were severe which led to recommendations that the buildings be temporarily evacuated until such time that more in-depth tests could be conducted, substantial weight and load is removed from the building, and/or immediate strengthening measures are completed. In these cases, the Accord requested that the Review Panel, established through the Ministry of Labor and Employment led National Plan of Action, be convened. The Review Panel was established for inspections which lead to determinations that a building evacuation or suspension to operations is required. In order to overturn the initial production suspension / evacuation recommendation of the inspection, a unanimous decision of the team of 4 Review Panel engineers (1 Accord, 1 Alliance, 2 GoB/BUET) must be reached. The Accord has conformed to the Review Panel mechanism in all 8 of our critical

{Emerging Bangladesh} April - June 2014

findings cases. Scenario in the First World Countries as opposed to in Bangladesh In Hong Kong or Singapore, textile factories are designed in only threestoried building with wide exit routes at every points so that in case of any emergency including fire or earthquake, workers are not trapped. In Europe, the apparel factories are termed most risky that are left unsafe from fire. So, textile factories over there are designed in special ways so that fire does not trap workers in any way. In UK, after recruiting a worker at apparel factory the company provides a 15 days paid training on fire fighting to a worker. During the training, a coworker, a supervisor, a floor in-charge and manager are designated to perform specific duties concerning fire incident. In Bangladesh, the scenario is totally different. Over here, garments factories or units are built in an unplanned manner. An entrepreneur can easily hire a building floor at any location in the country, and can start garment business. Mirpur and Rampura are the two most common areas where about 600 garments factories are set up and run without any plan. Most of the buildings are in multistoried in nature, and have very limited space for workers to get out into safety. The figure below gives the real status of safety equipment practiced in apparel manufacturing organizations. The figure 1 showed that usage rate of safety goggle is higher in only two factories among 10 of them, rest of them are using very few of the safety equipment which is not adequate to protect the people from accident. Very similar result has been shown in figure 2 where usage rate of hand gloves are demonstrated. This is most exception in the case of figure 3,4,5 consecutively , companies are practicing equipment e.g. eye guard, needle guard and mask in the same proportion, however, still these quantity of devices practice by the factory is insufficient and there is probability to create hazardous 69

Approximate Average Number of Safety Equipment Used in a Few RMG Factories

situation while any disaster happen. Fire hose pipe is vital one for instantly take preventive action against firing, usage rate of hose pipe is minimum percentages. Overall, this is totally deficient equipment usage by the apparel manufacturer. Safety first, at any cost On the night of 24 November 2012, at Tazreen Fashions, the eight-story garment factory in the Ashulia district on the outskirts of the capital Dhaka, estimated 1,150 people working to fill orders for various international brands. The fire reportedly originated from an electrical malfunction on the ground floor, where bales of yarn and fabric were improperly stored. While many workers managed to escape to an adjacent building, others were burned or suffocated to death. On the worst affected third floor-sewing unit, sixtynine bodies were recovered. Factory inspections of Accord producing facilities designed to identify fire, electrical, and building structural safety risks are an integral component of the Accord requirements. As expected, Accord inspections are identifying safety risks in all three areas. The country's ready-made garment (RMG) sector needs to spend 70

over Tk. 2,410 crore for importing fire equipment- sprinklers and fire doorsto comply with fire safety conditions set by the two retailers' platforms Accord and Alliance. Both the two platforms, who have launched their inspection to the country's RMG factories, are now putting pressure on the owners to comply their factories with the fire safety plan recommended by Accord and Alliance. A total of 1,200 factories need to install sprinklers, while 3,000 other factories have to install fire doors as per the requirement of the Accord and Alliance. Based on sizes and the patterns of the factories, a factory owner, on an average, will have to spend around Tk. 1.5 crore to install sprinklers including setting-up costs, while Tk 6.50 lakh will be needed for the specific fire doors. Currently BKMEA has 1000 running factories that need to install fire doors while 300 out of 1000 factories have to install sprinklers. Locally, BUET has been engaged in inspecting the rest of the factories, which are not being inspected, by Accord and Alliance. Fifteen teams have been set up to assess the structural integrity of these {Emerging Bangladesh} bgcci.com

specific RMG factory buildings according to the Guidelines for assessing Structural Integrity. Teams are comprised of either two structural engineers, or one structural engineer and one Geotechnical engineer, both with a minimum combined experience of at least twenty years. These (preliminary) inspections took place in the period from November 2013 to August 2014. The teams carried out an inspection according to the Checklist in the Guidelines. If the inspection reveals structural issues that need immediate action, a process is set into action to remediate the situation. In several cases such action has taken place already. Another fifteen teams have been set up to assess the Electrical and Fire Safety. These teams consist of five experienced members (each with at least five years' experience) and with different engineering backgrounds (Electrical Engineer, Architect, Civil engineer, Mechanical engineer, Process design engineer). It was hard to find enough engineers with more than five years' experience for all positions, but all team members are at least graduate engineers. It should be noted that no fire safety engineer is a part of any team.

FEATURE Quick scan

BUET

Yes

High Risk? No

Advice to close immediately

BUET

Review committee 48 hours

Review Panel

Close factory

Chief inspector of Factories

Recommendations

BUET or ILO? ILO

Remediation plan

Figure: BUET Assessment Procedures The teams carry out the preliminary assessments according to the Guidelines for assessing Fire and Electrical Safety. The assessment procedures, as they have been described in the Guidelines for structural safety, provide a mechanism to deal with factories with an immediate danger. If an inspection team finds a high-risk situation, they can advise the factory owner to close immediately. A review committee then decides, within 48 hours, about the necessity to close. The closure of the factory has to be ordered by the Chief Inspector of Factories (Ministry of Labor), who acts upon the recommendations of the review committee. The assessment reports are presented to the ILO, acting as Chair of the NTC. Recommendations were key parts of the reports which were supported by information from the ILO. A first set of reports were ready in January 2014. The ILO has been processing them before they are to be made public. The reports will form the basis of a process of setting up remediation plans. This process is currently still under construction. The first set of reports will provide important input to this process and for further discussion as there is no comparable description for the closure of a factory in the guidelines for Electrical and Fire safety.

Recommendations The growth rate of RMG sector over the last decade was almost 25%. However, it is now under severe threat due to compliance issues of safety, health and welfare of worker. Hence, creation of further employment opportunities in this industry can be hampered in the near future. To prevent that from happening following measures can be taken ·

Identifying the areas of improvement on safety (through audit/observation), risk/hazard assessment and analysis on equipment based analysis, job based analysis, location based analysis

Identifying the presence of the resources including PPE (Personal Protective Equipment) etc., and developing a useable PPE Matrix and recommending immediate arrangement of the equipment to implement the Safety Management Program, factory premises including Factory Access, weigh bridge area, roads, lanes and cleanliness related to health hazard

Preparing Accident Record Register in MS Excel, Factory Building Design Review and recommendation, machine safety assessment and recommendation

Identification and recommendation for Occupational Health, working uniform/dress, safe for work awareness campaign among the first line workers

Recommendations for Awareness Campaign Materials, formation of Safety Cell (Safety Committee) for self-inspection and carrying out safety events at a regular/scheduled interval

Giving complete guideline to establish an Emergency Safety Clinic

Formation of First Aid Team, sufficient widening of fire exit doors, and enough ventilation with proper maintenance for air circulation should be designed for industry building

Regular fire drills should be held

{Emerging Bangladesh} bgcci.com

FEATURE

Financial Woes: Too High to Share? Ensuring worker safety across the RMG industry calls for huge investment in remediation. However, can the RMG factories and the Brands resolve their differences to mobilize the necessary financial support for achieving their mutual goal? Upoma Dutta tries to find out

eing a Member of the Accord on Fire and Building Safety in Bangladesh or the Alliance for Bangladesh Worker Safety requires significant financial commitment for the brand signatory (that is, the Western buyer sourcing from the ready-made garments industry of Bangladesh). However, when it comes to sharing the costs of remediation work and the wages of workers who are temporarily displaced for remediation, two-way miscommunication prevails between RMG owners and Western buyers. On one hand, several RMG owners operate under the false impression that the Accord and the Alliance will also 72

provide the funding for remediation efforts suggested by factory inspections. On the other hand, the signatories of the Accord and the Alliance tend to believe that the RMG owners can easily cover the costs of remediation and financial support for displaced workers through their own capital. In order to ensure that such misperceptions do not act as an impediment against materializing the ultimate goal of improving worker safety in the RMG industry, greater understanding regarding the obligations of the Accord and Alliance needs to be established among the RMG entrepreneurs while, at the same time, Western buyers need to recognize that the RMG owners need significant financial support for undertaking the {Emerging Bangladesh} April - June 2014

remediation efforts. As a start, the Accord requires that each signatory company should contribute a yearly fee that is dependent upon the company's volume of sourcing from Bangladesh; the maximum size of the fee is limited to USD 500,000. These yearly fees are used to fund the regular activities of the Accord most notably, the costs of conducting safety inspections in factories and providing safety training for workers. However, under no circumstances, these fees can be used to fund the remediation (such as renovations or structural repairs) deemed necessary by the safety inspection. However, even though the Accord

does not directly pay for the remediation efforts, there is a binding obligation on the brand signatory to make sure that the RMG factory has adequate funds for the remediation. In many cases, the support from brand signatory takes the form of favorable commercial trade terms (such as increased sourcing volume from the RMG factory) to make it easier for the RMG factory to recoup the costs of remediation. On the other hand, the Alliance has set up a USD 100 million fund named â&#x20AC;&#x153;Affordable Capital for Building Safetyâ&#x20AC;? (ACBS) to provide low-cost capital for factory owners for remediation efforts. This fund was formed in light of the high cost of bank loans in Bangladesh typically amounting to 15 percent per annum that deters the execution of factory safety improvements. Even before the ACBS was formed, Walmart, the stalwart member of the Alliance, committed around USD 50 million as low-cost capital for the 75 factories from which it sourced to help them undertake remediation efforts. However, the success of this effort from Walmart was called into question when a few factory owners alleged that Walmart never informed them of this loan. The Alliance has also gone an extra mile ahead of the Accord by setting aside 10 percent of its member contributed funds for a Worker Compensation Fund. This Fund provides financial support to workers who are temporarily displaced due to remediation or permanent shutdown of factories. Through this Fund, the Alliance takes care 50 percent of displaced workers' wages (for a maximum period of two months) while the other 50 percent of the wages is borne by the factories themselves. Nonetheless, there is no denying that the Accord and the Alliance despite having the largest brands on board cannot ensure the full extent of financial support that is required to materialize the safety improvements across the mushrooming RMG industry. The safety inspection reports publicly disclosed by the Accord and

17,500

75,000

10-25 million

500,000

50-100 million

175,000 > 500 million 100-250 million

10,000 1-10 million

Contribution (Fee) for the Accord per Year (USD) Volume of Sourcing from Bangladesh per Year (USD)

375,000 37,500

1,000

< 1 million

250-500 million

the Alliance show that typical costs for improving structural, fire and electrical safety systems in a single factory can amount to BDT 1.7 million, BDT 2.6 million and BDT 4.1 million respectively that is, the total remediation costs can easily be as high as BDT 8 million. Certainly, the Accord and the Alliance cannot singlehandedly ensure the funds required for such remediation efforts across all factories. For this very reason, support from the financial sector is imperative for helping factories finance the remediation and ensure safety for workers. Unfortunately, the financial sector in Bangladesh is currently not conducive to the goal of the Accord and the Alliance. On one hand, the exorbitant interest rates charged by financial institutions make it impossible for RMG factories to avail bank loans to fund remediation activities. On the other hand, there are financial institutions which are reluctant to offer loans for remediation costs as they regard these costs as nothing but sunk costs with negative rates of investment return. {Emerging Bangladesh} bgcci.com

25-50 million

It is important for the Accord and the Alliance to advocate for greater support from the financial sector to accelerate the pace of remediation among the inspected RMG factories. Low-cost financial loan products tailored for the needs of Bangladesh RMG factories are absolutely crucial. New refinance schemes from Bangladesh Bank to encourage financial institutions to lend to RMG factories for remediation can be one possible solution. In hindsight, lack of financial support should not be allowed to decelerate the pace of factory safety reforms undergoing in the RMG industry. After all, as the case of Rana Plaza clearly highlighted, neglected safety measures can lead to huge losses in business for RMG factories and in reputation for brands. As a result, the Accord and the Alliance must ensure that their efforts do not stay limited to just conducting safety inspections in factories; they must also ensure that there is a conducive infrastructure for allowing RMG factories to undertake the required remediation. 73

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