Bangladesh Garment Protests Enter Fourth Day

garments protest

Bangladesh labor protests entered a fourth day after overnight negotiations failed to end a dispute over low wages as garment factory owners reopened plants that supply companies including Wal-Mart Stores Inc. (WMT)

Shipping Minister Shajahan Khan met last night with factory owners and labor leaders in an effort to end demonstrations that forced about 400 of the country’s 5,000 garment factories to close yesterday. Thousands of workers seeking to more than double their monthly pay to $104 blocked traffic today in Dhaka, the capital, Assistant Sub-Inspector of Police Abdul Oadud said by phone.

“I hope the workers will get back to work,” Khan told reporters after the meeting ended early today. He promised to boost security for factories that employ 3.6 million people, mostly women, and account for 78 percent of the country’s export earnings.

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 lowest wages in Asia after Myanmar have helped spawn a $19 billion Bangladeshi manufacturing industry that supplies global retailers with cheap clothes.

Minimum Wage

Khan said he asked a panel known as the Minimum WageBoard to complete and submit a new salary structure for workers to the government by November, a month earlier than the previous deadline. He didn’t say how much wages might be increased.

Factory owners urged law enforcement agencies to tighten security in all industrial areas where garment factories are concentrated, Khan said.

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.

Seven factories suspended production today as protests continued, Ekattor TV reported. Workers yesterday pelted factories with bricks, blocked a highway, set fire to a warehouse and clashed with police as they fired tear gas.

H&M Support

Hennes & Mauritz AB, (HMB) Europe’s second-biggest clothing retailer, joined the IndustriALL Global Union in backing the workers’ pursuit of increased compensation.

“We strongly support the workers demand for higher wages,” H&M spokeswoman Andrea Roos said by e-mail. “Bangladesh is an important sourcing market for H&M and we have on various occasions and also together with other clothing companies, urged the government to raise minimum wages in the textile industry and to revise wages annually.”

IndustriALL supports the workers’ “justified demands,” Jyrki Raina, IndustriALL’s general secretary, said in an e-mail.

At least 70 people, including six police officials, were injured in clashes in Gazipur and Savar, two industrial belts on Dhaka’s outskirts, Mosharraf Hossain, assistant superintendent of industrial police, told reporters yesterday. Retailers including Wal-Mart, H&M, Inditex SA (ITX)and Gap Inc. source goods from Gazipur, according to Murshedy.

‘Ludicrous’ Offer

The protesters demanded a minimum monthly salary of 8,114 taka ($104), up from 3,000 taka now, Murshedy said yesterday. 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.”

Wal-Mart, Target

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.

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, according to IndustriALL. One of the absentees, Benetton Group SpA, said the meeting wouldn’t provide a framework to address compensation.

Safety Pact

A group of North American retailers, including Wal-Mart and Target Corp. (TGT), said in a pact announced in July that 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 largest clothing retailer, pledged at least $60 million over five years to monitor safety in Bangladesh plants. The European plan obligates companies to ensure their factories have the capital to make necessary repairs.

Raul Estradera, a spokesman for Inditex, declined yesterday to comment on the unrest.

Source: Bloomberg