Compensation For The Rana Plaza Victims: A Forgotten Issue?
By Anu Muhammad
22 July, 2013
It is really unbelievable! Nearly 3 months passed since deadly factory collapse on 24 April, no compensation for the families of the killed and injured has been declared, not to say payment of that to thousands of families living now in utter distress. The prime minister has handed over some money, collected through donation, to few hundred families. That can be called preliminary help, not compensation, but that also stopped since June 19. Is the compensation issue forgotten or is it deliberate attempt to pass time to bypass it? Even after horrible death of more than 11 hundred workers in Rana Plaza and many still missing, no significant initiative from the BGMEA or the government was seen that could mark a real change of attitude. We have learned about number of international conferences and consultations that ended up with some promises and plans though.
On July 8, the International Labour Organization (ILO) along with European Union (EU) and the Government of Bangladesh had declared a major “compact” to improve labour rights, working conditions and factory safety in the ready-made garment industry in Bangladesh. They concluded with commitments from all the parties concerned to a ‘number of time-bound actions, including reforming the Bangladesh Labour Law to strengthening workers’ rights; improving building and fire safety by June 2014 and recruiting 200 additional inspectors by the end of 2013.
These are undoubtedly important and primary steps. Question is who prevented the government of Bangladesh and BGMEA to take these initiatives from its own? Why they had to wait to hear ‘carrot or stick’ threat from the EU commissioner to declare some very preliminary steps? If initiatives do not come from within, will that work at the end? Up to now the number of factory inspectors is pathetically insignificant, for about 5 thousand factories 10 effective inspectors is difficult to locate. The government has declared the country budget 6 weeks after Rana plaza disaster, but that disaster could not draw sufficient attention of the government to allocate funds to improve monitoring system for the garments industry and to strengthen institutions for efficient rescue operation.
On July 10, seventeen North American retailers, including Wal-Mart and Gap formed the ‘Alliance for Bangladesh Worker Safety Initiative’ undertook a five-year plan, that set timelines and accountability for inspections, training and worker empowerment. It was said that the members of the alliance would provide the funding necessary over the five-year period — currently at $42 million and growing — to support the specific programmes of the initiative, with some companies offering an additional combined total of over $100 million in loans and access to capital to assist factory owners they work with in Bangladesh for factory safety improvements. (http://www.newagebd.com/detail.php?date=2013-07-11&nid=56586#.Ud6dhTs3CHA)
These sound good, yet not enough. However, all depends on how the profiteers including owner, brand retailers and off course the government behave on the ground.
In the meanwhile, the Obama administration announced plans on June 27 to suspend ‘trade privileges’ for Bangladesh over ‘concerns about safety problems and labour rights violations’ in the country’s garment industry. It seems from the announcement that the US administration has been very worried about safety of the workers and labour rights; therefore they are punishing guilty owners by withdrawing some facilities so that they change their behaviour. But the question is, what trade privileges were given, prior to that declaration, to Bangladesh garments in the first place? Who will actually be affected by this punishment?
The partial answer can be found in the NYtimes report, ‘....the suspension (of GSP) would be largely symbolic because it will affect less than 1 percent of America’s $4.9 billion in annual imports from Bangladesh.’ http://www.nytimes.com/2013/06/28/business/us-to-suspend-trade-privileges-with-bangladesh-officials-say.html?pagewanted=all
Why is that? Simply because, Bangladesh garments had never been under GSP facility of the US. According to the US trade representative policy, not only BD garments, garments in general mostly have been excluded from the GSP facility to protect their own factories. The 1 percent of value of the export items from Bangladesh to the US market, that got this facility, included ceramic, plastic, toys and other things. Ironically, the US administration did not have any complain against these factories, but they are being punished by this US step. Things stand like this: the USA has ‘suspended’ GSP facility to BD garments that it does not and never did provide. And it was done ‘over concerns about safety problems and labour rights violations’. Is it a joke or a planned psychological pressure for something else, as well for hiding the reality from its own citizens, to confuse them?
Now what will be the impact of this so-called GSP suspension? Nothing in terms of export flow of garments, that will continue with high rate of duties as before. However, one may fear one possibility though. A chain of blackmailing may take place, brand retailers and buying houses may push for further price cutting, the owners may continue cost cutting to maintain their level of profit, and all of these come down heavily on the workers, those are still alive. If that happens, net result of the US ‘pro-labour’ punishment measure will end up with punishing labourers more.
GSP facility is not something from which only LDCs get benefit, it gives benefits to the brands and the consumers in the west too. Bangladesh deserves it because of WTO rules and global understandings regarding LDCs. However, Bangladesh has not only been deprived of GSP facility in the US, it is discriminated against by the US duty structure. When many other countries have a 1 percent tariff rate — some even less — as they enter the US market, Bangladesh garments sector faces 15% and more. This is a highly protectionist and discriminating policy of the US against Bangladesh.
Without asking the US to behave in line with the ‘free market’ principle that it claims to be the champion, Bangladesh cabinet approved the TICFA draft on June 17 last as an attempt to please the US authority. In the public domain it was presented as a deal that would fight corruption, promote basic labour rights, and help to expand trade and investment. The historical experiences of close ties of the US empire with the worst possible corrupt and repressive rulers around the world suggest that the issues of corruption, environment and labour rights were put in the TICFA document as ornament and rhetoric very usual for the US. Moreover, expansion of trade and investment does not require TICFA, we know that major trading partners of the US do not have TICFA. The main interests of the US, therefore, lie elsewhere, may be ‘to drive Bangladesh towards enforcing intellectual property rights’ is one of them, ‘to open its service sector to US investors’ is another. And to bring Bangladesh into bilateral obligation avoiding multilateral forum like WTO seems to be the most important objective. That would certainly give the US an effective instrument to twist hands and to take strategic steps whenever necessary.
We have heard foolish (or deceptive) statements from the government spokespersons or BGMEA members that, if Bangladesh signs TICFA, the country will get GSP again! That will never happen. In fact, it is meaningless for Bangladesh to beg for GSP facility, since it would not bring anything better. Instead, Bangladesh should demand to remove protectionist wall against its garments and to remove discriminating tariff structure imposed by the US.
Finally, in the last few days we have heard many promises, found international conferences that concluded with many programmes. But talk about the compensation and necessary steps for the killed and injured are still missing!
Anu Muhammad, Professor of Economics, Jahangirnagar University Email: firstname.lastname@example.org
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