Background
Eleven years ago, the Rana Plaza building in Dhaka, Bangladesh, collapsed due to what experts said were structural failures; killing more than 1,100 people and injuring 2,500.1[1] Elizabeth Paton, A Grim Anniversary for Survivors of the Rana Plaza Disaster, N.Y. Times (Apr. 24, 2023), https://www.nytimes.com/2023/04/24/fashion/rana-plaza-anniversary.html.; Hopkins, Tansy, Reliving the Rana Plaza factory collapse: a history of cities in 50 buildings, day 22, The Observer (Apr. 23, 2015), https://www.theguardian.com/cities/2015/apr/23/rana-plaza-factory-collapse-history-cities-50-buildings.This tragedy, one of the deadliest industrial accidents in history, exposed significant issues within Bangladesh’s ready-made garment (RMG) industry, including poor labor conditions, inadequate worker safety, and low wages. Ready-made garments are pre-manufactured textile products produced in bulk by the clothing industry. 2[2] Transport Information Service, Ready-Made Garments, https://www.tis-gdv.de/tis_e/ware/textil/konfektion/konfektion-htm In response to the Rana Plaza tragedy, the Bangladeshi government was under immense pressure to improve their factory conditions and workers’ rights. While the disaster served as a major catalyst for action, the government had already begun taking steps to address labor conditions. They signed the Accord on Fire and Building Safety in May 2013, amended its Labour Law in 2013 and 2018, and introduced the Labour Rules in 2015, which was later revised in 2022.3[3] S M Abu Nayem Ahmed, Recent Changes of Labour Law and its implication, Institute of Chartered Accountants of Bangladesh (Nov. 27, 2023), https://www.icab.org.bd/publication/news/4/1121/Recent-Changes-of-Labour-Law-and-its-Implication The Accord is a five-year legally binding agreement between brands and trade unions to ensure a safe working environment in the Bangladeshi RMG industry.4[4]4 Bangladesh Accord, https://bangladeshaccord.org (last visited Nov. 15, 2024). These reforms have faced significant challenges in enforcement, with many workers and advocates arguing that they have not led to meaningful or sustained changes in working conditions. While these initiatives demonstrate a commitment to addressing labor issues, their effectiveness remains questionable, as evidenced by persistent protests and international scrutiny.
Bangladesh is one of the largest exporters of ready-made garments, with the RMG sector accounting for 84% of its exports and employing millions.5[5] Achim Berg et. al, What’s next for Bangladesh’s garment industry, after a decade of growth?, (Mar. 25, 2021), https://www.mckinsey.com/industries/retail/our-insights/whats-next-for-bangladeshs-garment-industry-after-adecade-of-growth. According to the World Trade Organization’s World Trade Statistics 2023, Bangladesh and the United States exhibit stark contrasts in their export performance for ready-made garments. Bangladesh ranks as the third largest exporter globally, accounting for 8.65% of the world market share, with an export value of $47.39 billion.6[6] World Trade Organization, World Trade Statistical Review 2023, https://www.wto.org/english/res_e/statis_e/statistics2023_e.htm (last visited Dec. 4, 2024). In contrast, the United States ranks tenth, contributing only 1.31% of the global market share, with an export value of $7.18 billion.7[7]Id. This highlights Bangladesh’s dominant role as a key global supplier of RMG, while the U.S. plays a relatively minor role in the export landscape, reflecting its focus on domestic consumption and import reliance in this sector. The significant disparity underscores the vital role of the RMG sector in Bangladesh’s economy, motivating the country’s efforts to introduce labor reforms to support its workforce and sustain its global competitiveness.
Bangladesh Labour Laws
The Bangladeshi government enacted the Labour Law Act in 2006 and the Labour Rules in 2015 to regulate labor practices as the country’s economy began a period of rapid expansion regarding RMG exports.8[8]UN News, Revised Bangladesh labour law ‘falls short’ of international standards (July 22, 2013), https://news.un.org/en/story/2013/07/445222. The 2006 Labour Law Act was subsequently amended in 2013, and the 2015 Labour Rules were further revised in 2022.
2006 Labour Law Act
Enacted in 2006, the original Labour Act promulgated provisions for wages and compensation for workplace injuries, as well as building safety protocols and fire safety precautions.9[9]ILO Statement on Reform of Bangladesh Labour Law, Int’l Labour Org. (July 22, 2013), http://www.ilo.org.global.about-the-ilo/media-centre/statements-and-speeches/WCMS_218067/lang—en/index.htm. Despite the enactment of the Labour Law Act, enforcement was ineffective due to an under-resourced Inspection Department, which had only 18 inspectors for about 100,000 factories in the Dhaka district.10[10]Human Rights Watch, Bangladesh: Tragedy Shows Urgency of Worker Protections, (Apr. 25, 2013), https://www.hrw.org/news/2013/04/25/bangladesh-tragedy-shows-urgency-worker-protections. Furthermore, fines for violations were minimal, and inspectors often gave factory owners advance notice of their inspections, undermining compliance with safety regulations.11[11]Id. These shortcomings created a regulatory framework that, while was promising on paper, failed to protect workers in practice.
2013 Amendment
Under pressure from both Bangladeshi citizens and international stakeholders, such as the International Labour Organization following the Rana Plaza disaster, the Bangladeshi Parliament enacted reforms to the Labor Act in 2013. 12[12]International Labour Organization, ILO statement on reform of Bangladesh labour law, (Jul. 15, 2013) https://www.ilo.org/global/about-the-ilo/newsroom/statements-and-speeches/WCMS_218067/lang–en/index.htm. The 2013 amendments introduced notable changes to improve worker protections and address international concerns, including expanding the law to cover sectors like non-profit education and healthcare and allowing workers in non-union workplaces to elect representatives to Participation and Safety Committees. Additionally, the amendments introduced measures to prohibit discrimination based on sex and disability, ensuring fair wages for equal work. However, critics noted that these changes fell short of fully meeting International Labour Organization (ILO) standards.
The Human Rights Watch argued that these measures did not meet up to ILO standards.13[13]Human Rights Watch, Bangladesh: Amended Labor Law Falls Short, (Jul. 15, 2013) https://www.hrw.org/news/2013/07/15/bangladesh-amended-labor-law-falls-short. A primary concern was that, although the Labour Amendments were revised to align to the International Labour Organization (ILO) standards-such as ensuring freedom of association and the rights to organize and bargain collectively—other provision remained unchanged, including the requirement for a significant portion of workers to join a union before it could be registered.14[14]Id. Additionally, the right to strike remained challenging due to bureaucratic hurdles and the government retaining broad authority to halt strikes under vaguely defined terms.15[15]Id. The amended law introduced “Participation Committees” and “Safety Committees” for workplaces with over fifty workers, where non-union employees elect their representatives.16[16]Id. However, these committees lacked clear roles and were largely ineffective. Their responsibilities overlapped with those typically handled by unions, which were better equipped to represent and protect workers’ interests.17[17]Id. Moreover, the revised Labour Law granted the government greater control over unions’ access to foreign funding, which raised concerns about government interference in workers’ organizations.18[18]Accord Chambers, Bangladesh Labour Rules 2022 Amendments, (May 8, 2023), https://accordchambers.com/insights/bangladesh-labour-rules-2022-amendments/. Lastly, concerns persisted regarding the Bangladeshi government’s commitment to enforcing these new provisions, mainly due to its track record of inadequate regulatory oversight and failure to enforce previous measures effectively.19[19]Human Rights Watch, supra note 10.
2015 Labour Rules
The Bangladesh Labour Rules (BLR) were enacted in 2015 to supplement the Labour Act of 2006 and provided detailed procedural guidelines for implementing labor standards.20[20]Bangladesh Labour Rules 2015, S.R.O. No. 291-Law/2015, https://bef.org.bd/wp-content/uploads/2021/08/Bangladesh-Labour-Rules-2015-English_Unofficial.pdf. These rules addressed various aspects of employment, including the formation of trade unions, workplace safety measures, maternity benfits, and welfare funds.
While the BLR was intended to bridge the gap between statutory provisions and practical enforcement, its impact has been limited by systemic challenges. Weak regulatory oversight and inadequate resourses have hindered effective implementation, leaving many workers without the protections these rules were designed to provide. Critics argued that that while the BLR introduced much-needed clarity to labor standards, it failed to address the deeper issues of enforcement and accountatbility that continute to plague the RMG sector. 21[21]Human Rights Watch, “Whoever Raises Their Head Suffers the Most”: Workers’ Rights in Bangladesh’s Garment Factories 25–28 (2015), https://www.hrw.org/report/2015/04/22/whoever-raises-their-head-suffers-most/workers-rights-bangladeshs-garment. As a result, the gap between legislative intent and workers’ lived realities remained largely unaddressed.
2022 Amendment
The 2022 Amendments to the Bangladesh 2015 Labour Rules introduced several significant changes. Some of the positive measures included enhanced workplace protection for women, the introduction of health-related leave, and stricter safety requirements for factories.22[22]Ahmed, supra note 3. On the other hand, there were some concerning implications for businesses, especially about wage increments, salary structures, and the treatment of outsourced workers.23[23]Accord Chambers, supra note 20.
One notable change was the mandatory yearly wage increment for workers, now set at a minimum of five percent of basic wages under the 2022 amendment.24[24]Ahmed, supra note 3. Unlike previous provisions, the amendment did not list any exceptions or conditions, such as meeting performance goals or achieving a certain level of profit, to delay or avoid these increases.25[25]Id. Consequently, this put financial pressure on businesses by increasing employee costs, especially during the current global economic slowdown.26[26]Accord Chambers, supra note 20.
Furthermore, there was a crucial change regarding the proportion of basic wages to total wages, now mandated to be at least fifty percent.27[27]Id. Under the new rule, an employee’s basic pay must make up at least fifty percent of their total pay when no government-set minimum wage exists. This could disrupt how companies currently structure salaries, especially if allowances and benefits (like bonuses or perks) make up a larger portion than basic pay. Businesses may need to adjust by increasing basic wages, rather than just cutting benefits or allowances, since doing so might lead to disputes with workers.28[28]Human Rights Watch, supra note 10.
Additionally, the amendment addressed the treatment of outsourced workers and ensured their wages are not less than those of permanent employees in similar roles.29[29]Ahmed, supra note 3. This change may disrupt the traditional contracting agency model, leading to increased costs and logistical challenges in ensuring equality across different organizations.30[30]Id.
The 2022 amendments to the Labour Rules introduced measures such as mandatory wage increments and protections for outsourced workers, reflecting an effort to modernize labor regulations. However, these changes imposed significant financial and logistical challenges for employers, raising concerns about feasibility and long-term impact. Moreover, workers have reported that many of these reforms have not translated into tangible improvements on the ground, with inadequate enforcement mechanisms continuing to hinder progress.31[31]Bangladesh Labour Rules: Workers’ Interests Mostly Ignored, Daily Star (Oct. 7, 2022), https://www.thedailystar.net/news/bangladesh/news/bangladesh-labour-rules-workers-interests-mostly-ignored-3135951. International Trade Union Confederation, Bangladesh: New Evidence of Violations of Workers’ Rights (Oct. 14, 2022), https://ituc-csi.org/Bangladesh-New-evidence-of-violations.
U.S. International Trade Commission Hearing
The United States International Trade Commission (USITC) is an independent, nonpartisan federal agency that is currently investigating the export competitiveness of apparel industries in Bangladesh, Cambodia, India, Indonesia and Pakistan.32[32]U.S. International Trade Comm’n, USITC Examines Apparel Export Competitiveness of Five U.S. Import Sources (2024), https://www.usitc.gov/press_room/news_release/2024/er0116_64763.htm. A public hearing in connection with the investigation was held on March 11, 2024, with many leaders from the Bangladesh RMG industry in attendance.33[33]Id. The focus of this commission was to investigate whether any of the five countries were engaging in unhealthy competition to dominate the market.
During the hearing, representatives from the Bangladesh Commerce Ministry and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) responded to various questions. The commerce ministry reported that workers’ wages had increased by at least 316% in the last decade, and the production cost per unit had also significantly risen. 34[34]TBS Report, Bangladesh RMG grilled over labour rights at US hearing (Mar. 12, 2024), https://www.tbsnews.net/bangladesh/bangladesh-under-fire-us-hearing-apparel-import-5-countries-807890. A USIC commissioner inquired whether the average work efficiency and productivity of workers in Bangladesh were lower than in Cambodia. Farque Hassan, head of BGMEA, mentioned that while it was difficult to determine if Bangladeshi workers were more efficient than Cambodian workers, Bangladesh’s labor productivity was lower than that of China, Vietnam, and Indonesia. Hassan acknowledged the need for workers to improve efficiency to increase production. While Hassan recognized that the number of trade unions in Bangladesh was lower than the number in Cambodia, in Bangladesh, every export-oriented factory had a trade union, which brought the national total to over 1,400. 35[35]TBS Report, supra note 33.
A pointed question arose when a USITC commissioner asked why Bangladesh did not allow trade unions in the Bangladesh Export Processing Zone (EPZ). Hassan responded that trade unions did exist in every apparel factory in the EPZ, but workers could choose their leadership through an election process. He admitted that the number of trade unions in Bangladesh was lower than in Cambodia but emphasized that every export-oriented factory in Bangladesh had a trade union, bringing the national total to over 1,400.36[36]Id.
These discussions underscore the crucile role trade unions play in advocating for garment workers’ rights by addressing the gaps highlighted during the hearing, such as low productivity, limited worker representation, and persistent wage disparities. The mention of trade unions in export-oriented factories and the election process in the Export Processing Zone (EPZ) reflects efforts to formalize worker representation, even if union density remains lower than in competing countries like Cambodia. By organizing workers and ensuring their voices are heard, trade unions serve as a vital mechanism for pushing for fair wages, improved safety conditions, and better labor standards in an industry rife with challenges.
Recent Developments
Despite reforms implemented over the past decade, recent developments in Bangladesh’s RMG industry have drawn attention to ongoing concerns regarding labor rights and enforcement. Amnesty International’s May 2024 report criticized the lack of proper compensation mechanisms for industrial accidents, while the Fair Labor Association (FLA) and the American Apparel & Footwear Association (AAFA) called attention to insufficient wages and weak union representation.37[37]Amnesty Int’l, Bangladesh: Garment Workers Must Receive Rights-Based Compensation and Justice Immediately, Amnesty Int’l (May 2, 2024), https://www.amnesty.org/en/latest/news/2024/05/bangladesh-garment-workers-must-receive-rights-based-compensation-and-justice-immediately/. These concerns highlight the gap between the legislative framework and the lived reality of workers, who continue to face significant challenges in securing fair wages and safe working conditions.
Conclusion
The recent USITC hearing further emphasizes these ongoing challenges within Bangladesh’s RMG industry. While significant progress has been made in improving safety standards and labor conditions since the Rana Plaza tragedy, critical gaps remain. The disconnect between reforms on paper and their enforcement in practice continues to hinder meaningful change. To achieve sustainable progress, close collaboration among the government, industry stakeholders, and international organizations is essential. Addressing the concerns raised by Amnesty International, the FLA, and the AAFA, as well as by worker representatives, will be crucial to fostering an equitable and sustainable RMG industry. Without comprehensive labor law reforms and robust enforcement mechanisms, the rights and welfare of millions of workers will remain inadequately protected, jeopardizing not only their livelihoods but also Bangladesh’s global leadership in garment production.
Written by: Jungsuh Kim
Brooklyn Law Class of 2025
