Published: Tuesday, May 7, 2013

EU trade ban a bad idea

Photo: Noor Alam/ Drik News

Photo: Noor Alam/ Drik News

THE full ramifications of the Rana Plaza building collapse and subsequent confirmed dead of 500+ workers has sent shockwaves across the world. Bangladesh is now being touted by a section of international fashion industry as a “dirty country” to do business in. Dirty words like “slave labour” are being made synonymous with the country’s readymade garments (RMG) sector. True, there are systemic faults that both industry and regulators suffer from. Again it is foolhardy to think that remedial measures being discussed today — some of which will be enacted into law in the coming months — will bear fruit immediately. Mr. Gilbert Houngbo, the UN agency’s deputy director-general for field operations, who recently led a high level meeting to Bangladesh, has unveiled a roadmap to help improve labour standards and make factories safer for workers.

The joint communiqué issued by the tripartite partners of ILO including the government, employers and workers have laid out a series of actions in the near and mid-term. Among them, submission of a labour law reform package to the parliament in its next session. Enactment would oversee institutionalising workers’ unions — a longstanding demand of RMG workers; recruiting some 200 additional inspectors over the next 6 months who will assess structural integrity of existing factories by 2013 end and who will work under the Department of the Chief Inspector of Factories and Establishments that will be upgraded to a full Directorate replete with separate budget.

This directorate will, in the future, have sufficient budgetary allocation to enable “(i) the recruitment of a minimum of 800 inspections and (ii) the development of the infrastructure required for their proper functioning.” Interestingly, the roadmap calls for putting into place a follow-up mechanism to measure progress in 6 months time from the date of issue of communiqué. Given, that this is a tentative roadmap agreed upon by major stakeholders (including the government), it should be given at least the minimum timeframe stated therein to see if it succeeds or not.

Hence, calls by some European Union (EU) member countries to restrict trade access to the single market in an effort to force the government into improving labour practices is premature. Secondly, as pointed out rightly by economist Tim Harford in a recent interview to the Financial Times: “If the EU does impose some sort of sanction on the country, the human cost is likely to be far higher than that of Rana Plaza. Bangladesh has been a development success story; poverty is high but falling fast. Literacy and life expectancy are improving. The appalling under-five mortality rate of 4.6% used to be far worse — 20 years ago, it was 12%. When we see the pictures of Rana Plaza wreckage, it’s easy to imagine a backdrop of stagnation, complacency and despair in which nothing ever changes, no matter how awful the tragedy. But the true context is a country making rapid improvements in nutrition, health, education and women’s employment. If the EU’s threat galvanises improvements in wages, working conditions and building standards — all of which Bangladesh can afford — then good. But if the threat were to be carried out, that would be a disaster, albeit one that will not be televised.”

And why must the RMG sector be singled out as the only culprit in this horrible situation? True, beyond the shadow of a doubt that Rana was ultimately responsible for the accident; that the lack of manpower coupled with near-zero oversight of the department of factories and industries allowed for the building to collapse. It is also true that 70% of the RMG sector operates in the murky world of orders by lesser brands (non-branded industries) that are outsourced to third parties where the whole issue of compliance remains on the backburner — where price is the only consideration. These are realities on the ground. As pointed out by Tim Harford: “Even if a local factory satisfies every demand for decent working conditions, it can easily outsource production to the likes of Rana Plaza.” So, unless the foreign brands are willing to take some responsibility, nothing much is going to change.

The news coming out of Brussels in the month of May is this. Catherine Ashton, the EU foreign policy chief stated that “the E.U. is presently considering appropriate action, including through Generalised System of Preferences — through which Bangladesh currently receives duty-free and quota-free access to the E.U. market under the ‘Everything But Arms’ scheme — in order to incentivise responsible management of supply chains involving developing countries.”

The writing on the wall is clear. Time for action is here. One can only hope that the tripartite agreement hammered out earlier this week will be taken seriously and all parties will adhere to its full implementation. Were an EU ban to come into place, its effects would be fully felt by the RMG sector (60% of its products are for EU market) and the estimated 3.6million people directly or indirectly employed could no longer count on having a job in the future — and the approximately $20 billion a year revenue could go up in smoke … literally.

The writer is Assistant Editor, The Daily Star.

  • Faruq Haider

    Support EU on the move. I ask the writer to go and work in one of the garment factories for 2 hours as a worker before writing once again on the subject (with due respect). The conditions are horrible and requires attention. I would ask the entire world to stop taking ready made garments from Bangladesh until it is proven by independent audit that the factories meet a minimum humane conditions! Again support EU!