Two Hundred Bangladesh Factories Shut on Labor Unrest
By Arun Devnath – Sep 23, 2013 7:48 AM ET
Thousands of Bangladesh garment workers seeking to more than double their pay to $104 clashed with police on Dhaka’s outskirts, forcing about 400 factories that supply companies such as Wal-Mart Stores Inc. (WMT) to close.
The workers, demonstrating for a third day, pelted factories with bricks and blocked a highway, Abdus Salam Murshedy, president of the Exporters Association of Bangladesh, said by phone. Television images showed police using tear gas on workers, some of whom set fire to a factory warehouse.
Garment workers shout slogans during a protest asking for wage increase in Dhaka on Sept. 21, 2013. Photographer: Munir uz Zaman/AFP/Getty Images
“It’s frustrating that we had to close the factories,” Murshedy said. “A one-day closure means a huge loss for owners.”
The labor unrest comes five months after the collapse of the eight-story Rana Plaza factory complex killed more than 1,000 people in the worst industrial accident in the South Asian country’s history. The second-lowest wages in Asia after Myanmar has helped spawn Bangladesh’s $19 billion manufacturing industry that supplies global retailers with cheap clothes.
At least 70 people, including six police officials, were injured in the clashes in Gazipur and Savar, two industrial belts on Dhaka’s outskirts, Mosharraf Hossain, assistant superintendent of industrial police, told reporters. Retailers such as Wal-Mart, Inditex SA (ITX), Gap Inc. andHennes & Mauritz AB (HMB) source goods from Gazipur, according to Murshedy.
The protesters demanded a minimum monthly salary of 8,114 taka ($104), up from 3,000 taka now, Murshedy said as he headed into a meeting with government officials. At a Sept. 17 meeting with labor leaders and government officials, the factory owners proposed increasing the monthly basic salary by 600 taka to 3,600 taka. Bangladesh last raised the minimum wage in 2010.
“If the owners had given workers a little more, we could have avoided violence,” said Nazma Akhter, a labor organizer and president of the Sommilito Garments Sramik Federation, a garment workers group. She called the offer from the factory owners “ludicrous.”
Monthly manufacturing wages in Bangladesh average $74, only higher than the $53 workers receive in Myanmar, according to an annual survey by the Japan External Trade Organization released in December. The annual total pay burden of a Bangladesh worker amounted to $1,478, compared with $4,577 in neighboring India, it showed.
“If the workers don’t return to work tomorrow, we will conclude that workers are part of the conspiracy and we will be bound to take action against them,” Shipping Minister Shajahan Khan told reporters after a meeting with garment owners in Dhaka. Khan is known for his influence over workers as he is simultaneously vice president of the Jatiya Sramik League, the labor unit of the ruling Awami League party, and executive president of the Bangladesh Road Transport Worker Federation.
International retailers have been under pressure to improve conditions in Bangladesh’s apparel industry. Retailers that sold garments made at the building that collapsed in April failed to agree on compensation after talks earlier this month, with Associated British Foods Plc (ABF)’s Primark unit saying it will pay more short-term aid.
Of 29 brands that were invited to the meeting in Geneva, only nine attended, the IndustriALL Global Union said in a statement. One of the absentees, Benetton Group SpA, said the meeting wouldn’t provide a framework to address compensation.
A group of North American retailers, including Wal-Mart Stores Inc. and Target Corp. (TGT), in apact announced in July said it will set safety standards by October and refuse to buy from factories deemed unsafe. The garment industry’s expansion has been marred by factories operated in buildings with poor electrical wiring, an insufficient number of exits and little fire-fighting equipment.
A separate accord signed by H&M and Inditex, Europe’s two largest clothing retailers, pledged at least $60 million over five years to monitor safety in Bangladesh plants. The Europe plan obligates companies to ensure their factories have the capital to make necessary repairs.
Raul Estradera, a spokesman for Inditex, declined to comment.
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