WE CAN’T LET BANGLADESH’S WORKERS DOWN

The EU has shaped the future of Bangladesh by opening its markets, but now it must ensure that companies operating in these markets play by the rules,

The COVID-19 pandemic has hit the world economy hard. In many countries, the second wave has arrived, bringing with it new restrictions. While the European Union has agreed a €750bn reconstruction fund for its Member States, including €390bn in grants, other countries have had to mobilise as many resources as possible to support the recovery of their much smaller economies. This is particularly true for governments in the developing world. With limited or no access to the capital market, they are unable to borrow the money needed to establish large-scale, permanent rescue programs for their citizens.

As a result, the millions of lives are a ected.

Bangladesh is one of these countries. However, it is more than just one of the “least-developed” countries. Bangladesh is most of all a success story of development. What we have observed in the country in less than 50 years is remarkable progress in both economic growth and in consolidating its democracy. Thanks to the opening of trade between the EU and Bangladesh under the ‘Everything but Arms’ trade scheme, Bangladesh has grown into one of the EU’s major business partners. Bangladesh’s clothing industry has become its economic backbone, employing 4.5 million workers and by far the number one industry in the country, accounting for 80 percent of exports. That makes Bangladesh the second-largest apparel manufacturer in the world, behind only China, with a number of well-known western brands producing much of their goods there. The fact that the clothing industry makes

“Thanks to the opening of trade between the EU and Bangladesh under the Everything but Arms trade scheme, Bangladesh has grown into one of the EU’s major business partners”

up such a significant share of Bangladesh’s GDP also shapes international news about the country. It is why many in the EU still link Bangladesh’s garment industry to the exploitation of women and the devastating events of two factory disasters in 2012 and 2013 - wrongly so.

A lot has changed over the past seven years. Trade unions have been established and workers have received security in the form of a legal minimum wage as well as other benefits. Health and safety in the workplace has been significantly improved too, thanks to a system of binding rules for factory buildings as well as for inspections of fabrics. Nonetheless, the Coronavirus pandemic has revealed that the dependence of a country on a single industry can become a burden. With significantly lower demand, western multinational companies have started cancelling orders, some reportedly without paying for production costs already laid out. Long-term business partners have turned their back, and the Bangladesh government has intervened by providing a stimulus package of 50bn Tk (€500m) to ready-made garments (RMG) factories to ensure that workers were paid. This support from the government allowed the RMG sector to keep their workers employed.

Yet, with many purchasers refusing to change their attitude, thousands of workers are now threatened with being sent home without pay, facing acute vulnerability.

Many multinational companies, including EU based ones, have shirked their responsibility of paying for orders by invoking the “force majeure” clause. They argue that, given the emergence of COVID-19, they are exempt from performing their contractual obligations. This is of course an unacceptable excuse, which not only gives a bad impression of European business ethics but also puts whole supply chains at risk. Workers in Bangladesh have a right to be paid for the work they have done. Therefore, it is crucial that multinational companies adhere to contracts and pay for goods already produced.

The EU has shaped the future of Bangladesh by opening its markets. Now it is time to ensure that companies operating in these markets play by the rules. Even although many companies in the EU already do voluntarily disclose their activities linked to human rights and environmental risks, a comprehensive, coherent approach is missing. The European Union needs proposals for guidelines and common rules that increase the accountability of companies and their actions and establish transparency for communities, consumers, investors, companies, and, in particular, to protect the most vulnerable: workers. Therefore, let’s not abandon them, and let’s demonstrate our solidarity ensuring that they can rely on fair conditions.

“The EU has shaped the future of Bangladesh by opening its markets. Now it is time to make sure that companies operating in these markets play by the rules”