New Law Aims To Protect Bangladesh Workers

Allows For Creation Of Unions

New Bangladesh LawAfter a building collapse and factory fire caused the deaths of more than 1,200 Bangladeshi garment manufacturing workers within the last year, the Asian nation's government passed a new labor law this week designed to bolster worker rights and improve labor conditions. In its key provisions, the law allows workers to form unions and creates a central fund to improve the living standards of factory employees. The legislation now requires 5% of annual profits to be deposited in employee welfare funds and mandates that union members will not be transferred to another factory of the same owner following labor unrest.

"The Bangladesh government has finally woken up," said David Bebon, CEO of DBEBZ Apparel, which manufactures garments in Bangladesh. "This isn't a Band-Aid measure. This is something that's going to lead to real, substantive change."

The implications of the rights-enhancing law may extend well beyond workers themselves. Bebon believes that substandard factories could be forced to close, while wages will rise. The government, labor groups, and factory owners are already in talks about increasing the minimum wage from the current $38 a month. Meanwhile, factories that are significantly safer – but more expensive to outfit and maintain – may become more the norm, Bebon said. Ultimately, such factors could increase the cost of producing apparel in Bangladesh, which could lead to higher apparel prices.

"When you introduce better structures, better conditions, better pay – there's a cost for that and we're going to have to pay it," said Bebon. "Still, it's something you have to be for. It's a human issue. Prices go up, but you improve the lot of humanity."

The new law follows weeks of international actions aimed at improving labor conditions in Bangladesh, including a decision by the Obama administration to cut off certain trade benefits for Bangladesh. Still, analysts say the trade withdrawal was largely symbolic: Bangladesh's garment sector – the engine of the nation's economy – was not affected by the suspension of trade privileges.