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Large retailers have struck a deal with Bangladesh textiles and
clothing manufacturers, promising to maintain their orders and the
prices they pay in return for improvements in labour standards.
The agreement, thought to be the first of its kind for the sector, involves Asda, Co-op, Cotton Group, Gap, KarstadtQuelle, H&M, Inditex, Levi Strauss, Littlewoods, Marks & Spencer, Nike and Wal-Mart, who hope to head off a 'race to the bottom' on workplace standards in Bangladesh now the global Multi-Fibre Agreement has ended.
Following the introduction in January of the more liberal Agreement on Textiles and Clothing (EP6, issue 8, p8), retail buyers are now freer to switch from one country to another in the search for lower prices. Industry observers fear factories in countries such as Bangladesh will lower labour standards to remain competitive. However, the retailers have agreed to try to avoid this by guaranteeing not to move their business away from Bangladesh - in return for undertakings by the suppliers to improve working conditions.
Among garment producing countries in Asia, Bangladesh has relatively good labour standards and has ratified seven of the eight core ILO conventions.
The retailers, who will monitor progress through existing factory audits, also expect productivity and quality improvements allied to a reduction in reputational risk. Garment workers in Bangladesh are less productive than their Chinese counterparts.
The Bangladesh deal was agreed at a meeting at the end of June in Dhaka hosted by the MFA Forum of retailers, institutions, trade unions and NGOs that was formed last year in response to the phasing out of the MFA.
As part of the agreement the Bangladesh government has created a cross sector body that will work with manufacturers. The National Forum on Social Compliance will:
develop a national strategy to improve the management skills of factory supervisors
raise awareness of workplace rights, with training for managers and staff
put in place procedures for resolving any conflicts in factories
standardize health and safety guidelines.
The retailers now want to broker similar agreements in other countries, starting with Lesotho and Sri Lanka.
Bangladesh is the ninth biggest exporter of garments to the US, according to US International Trade Commission data for 2003. Textiles and clothing worth €3.88billion ($4.73bn, £2.62bn) were imported into the European Union from Bangladesh in 2004, or 5.6 per cent of total EU imports of this product group.
The agreement, thought to be the first of its kind for the sector, involves Asda, Co-op, Cotton Group, Gap, KarstadtQuelle, H&M, Inditex, Levi Strauss, Littlewoods, Marks & Spencer, Nike and Wal-Mart, who hope to head off a 'race to the bottom' on workplace standards in Bangladesh now the global Multi-Fibre Agreement has ended.
Following the introduction in January of the more liberal Agreement on Textiles and Clothing (EP6, issue 8, p8), retail buyers are now freer to switch from one country to another in the search for lower prices. Industry observers fear factories in countries such as Bangladesh will lower labour standards to remain competitive. However, the retailers have agreed to try to avoid this by guaranteeing not to move their business away from Bangladesh - in return for undertakings by the suppliers to improve working conditions.
Among garment producing countries in Asia, Bangladesh has relatively good labour standards and has ratified seven of the eight core ILO conventions.
The retailers, who will monitor progress through existing factory audits, also expect productivity and quality improvements allied to a reduction in reputational risk. Garment workers in Bangladesh are less productive than their Chinese counterparts.
The Bangladesh deal was agreed at a meeting at the end of June in Dhaka hosted by the MFA Forum of retailers, institutions, trade unions and NGOs that was formed last year in response to the phasing out of the MFA.
As part of the agreement the Bangladesh government has created a cross sector body that will work with manufacturers. The National Forum on Social Compliance will:
develop a national strategy to improve the management skills of factory supervisors raise awareness of workplace rights, with training for managers and staff put in place procedures for resolving any conflicts in factories standardize health and safety guidelines. The retailers now want to broker similar agreements in other countries, starting with Lesotho and Sri Lanka.
Bangladesh is the ninth biggest exporter of garments to the US, according to US International Trade Commission data for 2003. Textiles and clothing worth €3.88billion ($4.73bn, £2.62bn) were imported into the European Union from Bangladesh in 2004, or 5.6 per cent of total EU imports of this product group.
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