By: Daria Stanculescu, Junior Research Associate, PILPG-NL
On April 24, 2013, the Rana Plaza factory building, which housed five garment factories, collapsed. More than 1,100 people died in the incident and many others were critically injured. The International Labour Organization (ILO) has described the Rana Plaza collapse as one of the worst industrial accidents on record. This incident highlighted the deficient conditions of the ready-made garment sector in Bangladesh.
A few weeks after the incident, global brands, retailers, and trade unions adopted the Accord on Fire and Building Safety in Bangladesh (the Bangladesh Accord), the first modern legally binding agreement of its kind. The Bangladesh Accord’s term was meant to end on June 1, 2021, when the Ready-Made-Garment (RMG) Sustainability Council (RSC) would replace it. Instead, the Accord’s term was extended by three months as trade unions threatened to leave the RSC, which they considered to be less effective than the Bangladesh Accord. This blog post will examine if the RSC is a suitable replacement for the Bangladesh Accord or whether a more adequate solution can result from the ongoing negotiations.
The Achievements of the Bangladesh Accord
The Bangladesh Accord, signed on May 13, 2013, rendered it mandatory for brands and retailers to ensure that workers in the garment industry carry out their work in safe conditions. It includes obligations for companies to open their supplier factories to independent inspections, to allow the results of these inspections to be reported publicly, and to help pay for essential safety renovations. The Bangladesh Accord also provides a complaint mechanism, through which workers can anonymously report potential violations at factories, as well as an enforcement mechanism for workers to bring legal action against signatories. A Steering Committee with equal representation of trade unions and signatory companies governs the Bangladesh Accord and the ILO provides a neutral chair to the Steering Committee.
Originally, the Bangladesh Accord’s term expired in 2018, but the parties extended it until 2021 through a Transition Accord to ensure that the collaboration between companies and unions would continue. Since 2013, over 200 brands and retailers have signed the Bangladesh Accord. As a result, inspections and monitoring have been carried out in 2,000 factories. Also, over two million workers have gone through health and safety training. This has significantly improved the working conditions in the garment industry and has increased the protection of workers in factories across Bangladesh.
The RMG Sustainability Council
The RSC, the envisaged successor of the Bangladesh Accord, is a national monitoring compliance system. The Bangladesh Accord’s Steering Committee and the Bangladesh Garment Manufacturers Employers’ Association (BGMEA) created the RSC through a Memorandum of Understanding (MoU). Its main goal is to continue the work of the Bangladesh Accord while maintaining the same transparency levels.
The question that arises is whether the RSC is an effective successor of the Bangladesh Accord. The MoU does not provide clarity on the institution’s decision-making and finance mechanisms. The RSC also lacks the enforcement mechanism necessary to ensure that brands and retailers meet their obligations. Furthermore, in the RSC, trade unions would hold only one-third of the governance seats, instead of half. This would significantly limit the powers of trade unions and essentially create a system of self-monitoring by companies. Most importantly, the RSC deal does not include binding commitments. As such, this mechanism relies on brands and retailers voluntarily complying with their commitments. These are significant changes compared to the Bangladesh Accord. The RSC has abandoned the core elements of the Bangladesh Accord which made it efficient and enforceable. In its current form, the RSC does not appear as effective as the Bangladesh Accord in ensuring the protection of workers’ rights.
Conclusion
The parties have temporarily extended the Bangladesh Accord, while trade unions and retailers come to an agreement. It is uncertain what will happen next. While trade unions insist on a binding agreement, brands argue for abandoning key elements of the Bangladesh Accord, such as independent monitoring. It remains to be seen what the results of the negotiations will be and whether or not the parties will reach an agreement within three months. An effective agreement will ensure the continued protection of workers in the garment industry. Mechanisms such as the RSC, however, raise problems of enforcement and limit the powers of trade unions. Therefore, they fail to consider the core elements that made the Bangladesh Accord effective.