Will the Dhaka attack halt progress for garment industry workers?

As Bangladesh reels from terrorist attacks, some question how it could effect foreign investment in the booming garment industry and impact workers' rights.

Andrew Biraj/Reuters/File
Workers sew clothes at a garment factory in June, 2013, near the Rana Plaza complex, which collapsed that April, killing 1,132 workers and focusing international attention on safety standards in Bangladesh garment industry. Anti-foreigner terrorism in the country's capital this past weekend has some questioning if further unrest will impact the garment industry.

In 2013, as Bangladesh mourned the over 1,100 people killed after the collapse of Rana Plaza, a complex where factories produced clothes for export, the nation's government and foreign companies signed agreements and formed coalitions to eradicate the kind of dangerous working conditions that led to the tragedy.

Three years later, safety violations at major factories have been addressed, according to reports from the coalitions. And Bangladesh’s place in the garment industry is on the rise: the Michigan-sized nation, already the second largest supplier of garments to Western countries, saw almost a ten percent increase in apparel exports to the United States between April 2015 and 2016.

As the country reels from terrorism directed at foreigners this past weekend, however, some groups are questioning whether foreign business – and its concern for workers' rights – could diminish. The weekend attack is the latest in an uptick of violence targeting foreigners, giving international firms concern for their employees' safety. 

While it is too early to tell if the recent terrorist attack, or the potential presence of the self-declared Islamic State militant group in Bangladesh, will cause foreign businesses to rethink their investments and contracts in the country, several companies have made statements related to their business interests in the area, reports CNN.

Uniqlo owner Fast Retailing has suspended all "unnecessary" business travel to Bangladesh. The company is based in Japan, where nine of the victims of the recent attack were from. Europe-based H&M has done the same.

Not all observers fear that the latest attack will have much effect on Bangladesh's garment industry, which accounts for 80 percent of its exports – including Barbara Briggs, associate director of the non-profit Institute for Global Labour and Human Rights in Pittsburgh, whose focus in the region is on labor rights, rather than foreign investment.

While she says that much remains undone to protect workers, there is a connection between the involvement of foreign businesses and improving standards within industry.

International concern has helped drive progress, but "unless the issue of worker rights and labor conditions is written about and there continues to be international concern about it – I don't think we are anywhere near having worker rights guaranteed in any sustainable way," she says. 

Since the 2013 collapse, coalitions of foreign-invested companies have stepped up their safety procedures, as The Christian Science Monitor reported that May:

Clothing firms quickly came under activist and union pressure to sign the Accord on Fire and Building Safety in Bangladesh: a five-year, legally binding commitment from retailers, whose suppliers will be subject to independent inspections and public reports. A finance mechanism also requires each firm to contribute to safety upgrades, at a maximum of $2.5 million each over the five-year commitment.

However, workers are still being exploited and barred from organizing, rights groups say. This past April, the European Commission issued a statement calling for "essential reforms" for "effective respect of trade union rights." Push-back – sometimes including violence – against union organization has also been highlighted as a problem in an April report from Human Rights Watch.

Ms. Briggs of the Institute for Global Labour and Human Rights concurs that difficulties in unionizing are a major problem. She adds that some prominent foreign companies have placed more emphasis on social and managerial interactions in the factories that they contract with, such as setting up worker participatory committees to discuss grievances. Yet they are still "a big step down from independent unions," she says. 

However, the factories that have done well improving work standards have seen positive feedback in the form of foreign-business contracts.

"The factories that have been getting better and can show that they are doing well in terms of safety and modern management practices are getting work," she says, which is an encouraging sign for foreign business practice in Bangladesh.

The attack in Dhaka comes at a time when industry in the country is both booming and at a critical phase in rights progress. Local industry leaders hope that violence targeting foreigners doesn’t become a larger problem for a country with $2.5 billion in foreign direct investment, with manufacturing as the largest sector.

"There will obviously be an impact," Faruque Hassan, senior vice president of the Bangladesh Garment Manufacturers and Exporters Association, told CNN. "But we are dependent on these brands, and we must overcome this situation."

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