EU considers trade action after Bangladesh factory collapse

Thursday, 2 May 2013 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The European Union voiced strong concern over labour conditions in Bangladesh after a building collapse there killed hundreds of factory workers, and said it was considering action to encourage improvements, including the use of its trade preference system.

Anger has been growing since the illegally built structure collapsed last week, killing at least 390 people. Hundreds remain unaccounted for but rescue officials said on Tuesday they had given up hope of finding any more survivors.

It was the third deadly incident in six months to raise questions about worker safety and labour conditions in the poor South Asian country, which relies on garments for 80% of its exports.

Representatives of major international garment buyers, some facing sharp criticism in home markets for doing too little to safeguard the mostly female workers making their clothes met industry representatives in Dhaka on Monday and agreed to form a joint panel to put together a new safety plan.

Clothes made in five factories inside the Rana Plaza building on the outskirts of the capital, Dhaka, were produced for retailers in Europe and Canada. Late on Tuesday, the EU issued a brief statement expressing concern and suggested it would look at Bangladesh’s preferential trade access to the EU market in considering taking action to encourage better safety standards and labour conditions.

“The EU is presently considering appropriate action, including through the Generalised System of Preferences (GSP) through which Bangladesh currently receives duty-free and quota-free access to the EU market under the ‘Everything But Arms’ scheme in order to incentivise responsible management of supply chains involving developing countries,” said the statement, issued by EU foreign policy chief Catherine Ashton and Trade Commissioner Karel de Gucht.

About 3.6 million people work in Bangladesh’s garment industry, making it the world’s second-largest apparel exporter. The bulk of exports 60% go to Europe. Ashton and de Gucht said they were deeply saddened by the ‘terrible loss of life’, particularly because it followed a fire in the Tazreen Fashion factory in a Dhaka suburb in November that killed 112 people.

“The sheer scale of this disaster and the alleged criminality around the building’s construction is finally becoming clear to the world,” Ashton and de Gucht said.

Also on Tuesday, following a private emergency meeting of Canadian retailers, the Retail Council of Canada said it would develop a new set of guidelines. That emergency meeting brought together retailers including Loblaw, Sears Canada and Wal-Mart Canada, to discuss how they would deal with the tragedy.

Representatives of some 45 companies, including Gap Inc, H&M, J.C. Penney, Nike, Wal-Mart, Britain’s Primark, Marks and Spencer and Tesco, and Li and Fung, also met officials from the Bangladesh Garment Manufacturers and Exporters Association in Dhaka to discuss safety.

The Retail Council of Canada, which represents operators of more than 43,000 stores in Canada, said it would work with international organisations, the Bangladeshi Government and others to find ways to address safety in the Bangladesh garment industry. Primark and Loblaw have promised to compensate the families of garment workers killed while making their clothes.