The collapse of Rana Plaza in April 2013 with the death of over 1,100 people, the majority of whom were garment workers, focussed international attention on safety and labour rights in the Bangladesh Ready Made Garment (RMG) sector.

In response, the Compact for Continuous Improvements in Labour Rights and Factory Safety in the Ready-Made Garment and Knitwear Industry in Bangladesh was launched in July 2013. The Compact seeks to improve labour, health and safety conditions for workers, as well as to encourage responsible behaviour by businesses in the RMG industry.

Staying engaged: The Sustainability Compact for the Bangladesh Ready Made Garment Sector

The Sustainability Compact is built on short and long-term commitments related to three inter-linked pillars:

1) respect for labour rights

2) structural integrity of buildings and occupational safety and health

3) responsible business conduct

This publication has been produced with the support of the European Union

About the Sustainability Compact

What is the Sustainability Compact?

The Sustainability Compact brings together the Government of Bangladesh, the European Commission, the United States, Canada and the International Labour Organization (ILO) accompanied by employers, trade unions and other key stakeholders to promote continuous improvements in labour rights and factory safety in the Ready Made Garment (RMG) industry. The Compact is built on short and long-term commitments related to three inter-linked pillars: 1) respect for labour rights; 2) structural integrity of buildings and occupational safety and health; and 3) responsible business conduct. There is no ‘end date' to the Compact as it is seen as a process of continuous engagement between the Compact partners.

Why is it important?

The Compact reflects the importance that its partners place on the need to improve working conditions and labour rights in the Bangladesh RMG sector as well as the need for responsible business conduct throughout the supply chain. The Compact commitments are also relevant to preferential access to export markets provided to Bangladesh and ILO Conventions which Bangladesh has ratified as well as the provision of development assistance.

Who is responsible for its implementation?

The Government of Bangladesh is responsible for the implementation of its Compact commitments. The ILO and other Compact partners provide technical assistance in certain areas. Meanwhile, activities supported by various development partners who are not Compact signatories contribute to certain commitments as do brands, retailers and global unions through their engagement in the Accord on Fire and Building Safety in Bangladesh, and the Alliance for Bangladesh Worker Safety.

How is progress monitored and reported?

Progress under the Compact is monitored and reported on a regular basis through various mechanisms. High-level follow up meetings take place on roughly an annual basis in Dhaka or Compact partner headquarters such as Brussels where progress is discussed. As part of the process stakeholders including trade unions, employers and civil society groups also take part in a public event. Another channel is the Bangladesh-based ‘3+5+1’ group that brings together the secretaries of Commerce, Labour and Foreign Affairs along with the ambassadors of the EU, US and Canada plus two other EU member states. ILO provides technical support to this process.

The Sustainability Compact brings together Bangladesh, the European Commission, United States, Canada and International Labour Organization.

Who are the Compact partners?Compact Technical Status Reports

Technical status reports on progress against the Compact commitments have been published in July 2014, April 2015, July 2016 and October 2017. A further report will be published following the review meeting that takes place in June 2018. The reports can be downloaded at https://bit.ly/2sT1ql1

About the BangladeshReady Made Garment industry

Bangladesh is the world’s 2nd largest exporter of garments

Global exports of garments totalled $441 billion in2017 of which Bangladesh

enjoyed a 6.4% share

making it the world’s 2nd largest exporter after China.1

There are

4,482 garment factories in Bangladesh3

Exports from the Bangladesh garment industry totalled

$28.149 billion in 2016-175

They employ close to

4 million workers

some 60% are women

85%

85% of Bangladesh garment exports go to the Compact partners4

18% 3%

Share of world garment exports2

China Bangladesh Vietnam India Turkey Cambodia

36.4%

6.4% 5.5% 4.0% 3.4%1.4%

Most are located in

Dhaka and

Chattogram

Garment exports accounted

for 81.2% of Bangladeshexport earnings in 2016-176

81.2%

$17.75bn 63%

EU USA$5.2bn

Canada$946mn

1 & 2 WTO3 to 6 BGMEA

Respect for labour rights, in particular freedom of association and the right to collective bargaining

Compact Pillar 1:

24 November 2012 Fire at Tazreen Fashions results in 112 deaths

24 April 2013 Rana Plaza building collapse leads to the loss of 1,136 lives

22 November 2013 Inspection of export-oriented RMG factory buildings in Bangladesh begins

13 May 2013 Accord on Building and Fire Safety in Bangladesh launched

8 July 2013 EU, USA, and Bangladesh with ILO support issue Sustainability Compact

10 July 2013 The Alliance for Bangladesh Worker Safety launched

15 July 2013 The Government of Bangladesh adopts amendments to the Bangladesh Labour Act (BLA)

15 January 2014 Labour Inspectorate upgraded to a Department; its budget, leadership, capacity and staffing levels significantly enhanced

13 October 2014 Better Work Bangladesh starts on-boarding factories

Commitments under the first pillar of the Compact relate to labour rights. This includes bringing the Bangladesh Labour Act – both in law and practice – in line with international labour standards in particular with reference to Freedom of Association and the right to collective bargaining.

There has been progress – albeit more needs to be done – in a number of areas. Amendments to the Bangladesh Labour Act have resulted in the registration of over 500 new RMG trade unions. The recent adoption of Standard Operating Procedures (SOPs) for the registration of trade unions and handling unfair labour practices are expected to ensure registration based on a simple, objective and transparent process and combating anti-union discrimination through prioritizing their investigation and prosecution, coupled with a database to render visible the progress made. The Department of Inspection for Factories and Establishments (DIFE) now has the capacity in terms of human resources, budget and skills to carry out its mandate in a more effective and accountable manner. Support has also been provided to bolster the skills training and livelihoods of Rana Plaza survivors.

The Government has recently made commitments towards the fulfillment of its international obligations by proposing the reduction of the threshold needed to form a union to 20% of workers and the extension of the mandate of the DIFE to cover factories in the Export Processing Zones (EPZs).

Further amendments and improvements as recommended by the ILO Committee of Experts to bring the Bangladesh Labour Act and draft EPZ Act in conformity with these commitments are still needed. The Government has announced they are being examined with social partners. The operations of the Department of Labour should also be supported as its upgrade gathers momentum.

Standard OperatingProcedures adopted fortrade union registration

and handling unfairlabour practices

Structural integrity of buildings and occupational safety and health

Compact Pillar 2:

20 October 2014 1st Sustainability Compact review takes place in Brussels

15 September 2015 Implementing Rules for Bangladesh Labour Act issued

6 October 2015 Bangladesh signs Letter of Intent with Germany and ILO to collaborate on development of Employment Injury Social Protection scheme

31 December 2015 Inspection phase ends: 3,780 factories assessed for structural, fire and electrical safety

January 2016 Canada joins Sustainability Compact

28 January 2016 2nd Sustainability Compact review held in Dhaka

28 April 2016 National Occupational Safety and Health Day celebrated for first time in Bangladesh

1 January 2017 Comprehensive and gender-sensitive Labour Inspection Checklist launched

6 March 2017 Tripartite Consultative Council for RMG sector formed

By December 2015 virtually allexporting RMG factories hadbeen assessed for structural,

fire and electrical safety

The second Compact pillar covers the inspection of all active export-oriented RMG and knitwear factories for structural, electrical and fire safety as well as subsequent follow up remediation work. There is a commitment for greater transparency relating to factory inspections as well as the implementation of the National Tripartite Plan of Action drawn up after Rana Plaza which amongst its provisions calls for the establishment of an employment injury insurance scheme.

Tangible progress has been made regarding workplace safety. Virtually all (3,780) export-oriented garment factories were inspected for structural, fire and electrical safety by December 2015 with some 40 closed for posing an immediate danger to workers. Follow up to the inspections is moving ahead well under the Accord on Factory and Building Safety and the Alliance for Bangladesh Worker Safety.

A Remediation Coordination Cell (RCC) was launched in May 2017 to oversee remediation of factories under the Government of Bangladesh’s National Initiative (for those factories not covered by the Accord or Alliance). All three inspection initiatives have also made information publicly available.

Moving forward the priority remains to complete all outstanding remediation of Accord, Alliance and National Initiative factories. The RCC needs to become fully operational and receive the support of all relevant regulators as it evolves to become an industrial safety agency. Actions are needed to ensure that any RMG factory which has either been newly established or relocated undergoes safety assessment. In addition, progress is needed to establish the employment injury insurance scheme which will benefit workers and employers alike.

Responsible Business Conduct

Compact Pillar 3:

14 May 2017 Remediation Coordination Cell for RMG sector launched

18 May 2017 3rd Sustainability Compact review held in Dhaka

May 2017 Standard Operating Procedures on Trade Union Registration adopted

July 2017 Standard Operating Procedures on Unfair Labour Practices adopted

November 2017 Government submits revisions of Bangladesh Labour Act (BLA) and draft Export Processing Zone (EPZ) law to ILO’s Committee of Experts

6 March 2018 Labour Inspection Management Application (LIMA) system launched

11 April 2018 Workers Resource Centre to support trade union capacity launched in Dhaka

9 May 2018 Government submits revised amendments to BLA and EPZ Act to ILO

25 June 2018 4th Sustainability Compact review takes place in Brussels

The third pillar of the Compact recognises the role the garment industry has to play in enhancing workplace safety and labour rights in the RMG sector. This includes both producers as well as fashion and retail brands sourcing garments from Bangladesh. The third pillar includes calls for continued promotion of socially responsible initiatives along the supply chain and for the development of a unified code of conduct for factory audit in Bangladesh.

The Accord on Factory and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety gather more than 250 brands and retailers from over 20 countries and have made a major contribution to workplace safety through factory inspections and remediation, capacity building and knowledge sharing. By May 2018, the Accord and the Alliance had completed more than 85% of remediation work. The Government's Remediation Coordination Cell (RCC) is being strengthened with the required manpower support, resources and logistics with a view to be able to fully take over overall responsibility. As part of this strengthening process recruitment of 60 additional engineers is underway. A roadmap is being created for the transition of Accord and Alliance work to government responsibility. The institutional capacity and readiness of the RCC to take over this role will be monitored on a six-monthly basis.

Better Work Bangladesh is directly engaged with 19 international buyers who source from some 160 RMG factories as it seeks to enhance compliance in the industry. The EU and OECD are working together to look at purchasing practices while the ILO has also focused on creating responsible supply chains. Further emphasis needs to be placed on establishing responsible and transparent sourcing practices that benefit those at every level along supply and value chains. Continued private sector involvement is also needed to create safe workplaces and a culture of respect for labour rights in RMG factories.

Better Work Bangladeshbrings together brands and suppliers to boost industry

compliance