Growing unrest ahead of new labor guidelines in Bangladesh

The Bangladesh Garment Manufacturers and Exporters Association announced yesterday that its members are closing down all the 300-odd factories in the industrial belt of Savar-Ashulia because of escalating labor unrest. Local authorities had already shut down more than 100 apparel factories in this area near the nation's capital last Sunday, after clashes between police and workers who were demonstrating to obtain higher wages.

The area produces more than one-quarter of all the clothing exported from Bangladesh, the world's second-largest exporter of apparel after China in terms of volume. Bowing to international pressure after the death of more than 1,000 garment workers since the collapse of the Rana Plaza factory last Apr. 28 and a fire at another factory on May 8, the country's government has set up commissions to study a raise in the minimum wage and to inspect safety conditions in all the 5,000 garment factories in Bangladesh. The government has also accepted in principle to give workers the possibility to form trade unions without their employers' permission.

The national minimum wage was first established in 1994. It was raised in 2006 and again in 2010, but at $38 a month it is still one of the lowest in the world, trailing those of five other key Asia sourcing countries. The clothing manufacturing industry employs 4.5 million people in Bangladesh and represents 80 percent of the country's export revenues.

Meanwhile, some big clients of the country's apparel production such as C&A, H&M, Inditex, Marks & Spencer, Primark, Tchibo, Tesco and PVH have indicated their intention to support a Fire and Building Safety Agreement intended to promote improved safety and health conditions in the factories with which they work in Bangladesh. However, some big brands have reportedly been reluctant to sign up for a fund to finance independent audits of the plants. VF Corp. has said that its supply guidelines already require the use of well-constructed factories and partners that are prepared to respond effectively in case of an emergency.