Stronger labor law in Bangladesh after garment factory collapseBY NANDITA BOSE

DHAKA Mon Jul 15, 2013 5:13am EDT0 COMMENTS

Tweet

inShare 9 Share this Email Print

A garment worker inspects a factory belonging to Tung Hai Group, a large garment exporter, after a fire in Dhaka May 9, 2013.

CREDIT: REUTERS/ANDREW BIRAJ

RELATED NEWS

For cost-crunching retailers, Bangladesh reigns supreme CORRECTED-For cost-crunching retailers, Bangladesh reigns supreme North American group sets Bangladesh factory safety plan Bangladesh tells EU it will boost worker rights, inspections Uniqlo brings fashion back to the source in Bangladesh

ANALYSIS & OPINION

Wal-Mart’s fear of commitment U.S. minimum wage hike would offer short-term economic stimulus: Chicago Fed

RELATED TOPICS

World »

(Reuters) - Bangladesh approved on Monday a labor law to boost worker rights,

including the freedom to form trade unions, after a factory building collapse in

April killed 1,132 garment workers and sparked debate over labor safety and

rights.

The legislation puts in place provisions including a central fund to improve

living standards of workers, a requirement for 5 percent of annual profits to be

deposited in employee welfare funds and an assurance that union members will

not be transferred to another factory of the same owner after labour unrest.

"The aim was to ensure workers' rights are strengthened and we have done

that," Khandaker Mosharraf Hossain, chairman of the parliamentary sub-

committee on labour reforms, told Reuters.

"I am hoping this will assuage global fears around this issue as well," Hossain

said.

The legislation is seen as a crucial step towards curbing rising cases of

exploitation in a country with 4 million garment factory workers. But activists

said it failed to address several concerns and blamed the government for

enacting the law in a hurry to please foreigners.

Bangladesh was under pressure to adopt a better labour law after the

European Union, which gives preferential access to the country's garment

industry, threatened punitive measures if it did not improve worker safety

standards.

Tax concessions offered by Western countries and low wages have helped turn

Bangladesh's garment sector into the country's largest employment generator

with annual exports worth $21 billion. Sixty percent of exports go to Europe.

In late June, U.S. President Barack Obama cut off U.S. trade benefits for

Bangladesh in a mostly symbolic response to conditions in its garment sector,

given that clothing is not eligible for U.S. duty cuts.

"They have made progress but the government rushed with it," said Rashed

Khan Menon, president of the Workers Party of Bangladesh and a member of

Parliament.

"They should have spent more time to deliberate on the issue of compensation

for the injured and dead, maternity benefits and rights of domestic workers,"

he said.

The government is in talks with labour groups and factory owners on a new

minimum wage for the garment sector. Its current $38-per-month minimum

pay is half what Cambodian garment workers earn.

Bangladesh last increased its minimum garment-worker pay in late 2010,

almost doubling the lowest pay. This time, wages are unlikely to go much

higher as factory owners, who oppose the raise, say they cannot afford higher

salaries as Western retailers are used to buying cheap clothing.

The April 24 collapse of the Rana Plaza complex, built on swampy ground

outside Dhaka with several illegal floors, ranked among the world's worst

industrial accidents. A fire at another garment factory last year killed 112

people.

(Additional reporting by Ruma Paul; Editing by Robert Birsel)