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European Commission

[Check Against Delivery]

Karel De Gucht

European Commissioner for Trade

Rana Plaza Aftermath

Informal OECD Ministerial meeting

Paris, 26 June 2014

Ladies and gentlemen,

On the eighth of July last year, the Government of Bangladesh, the European Union, and the International Labour Organisation made an agreement. The United States joined us later.

We agreed to do our part to improve labour rights and factory conditions in the garment industry in Bangladesh.

The European Union had an obligation to act because it grants duty-free and quota-free tariff preferences to Bangladesh which have been a boon to the country's export performance. The European Union was – and still is – the largest client of Bangladesh's garment business. We imported over 9 billion euros worth in 2013.

I therefore am proud of the fact that after some very hard work with the Government of Bangladesh, the ILO and the US, we launched the Sustainability Compact for Bangladesh.

And I am also proud to report that much of that programme has been put into practice.

Let me give you some examples:

Bangladesh has amended its labour law improving labour rights. It has also upgraded its system for inspecting factory safety and begun the recruitment process of hundreds of new inspectors. Inspections have started and their results are being made public. Many new unions have registered and workers are starting to organise.

For our part, the European Union has extended its 16-million-euro programme to promote Better Work and Standards in Bangladesh, as well as its 15 million-euro Technical and Vocational Education and Training programme that also helps with rehabilitation of some of the victims of Rana Plaza.

In parallel: the private sector both in Bangladesh and in buyer countries is working with trade unions to implement their own commitment through the Accord for Fire and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety. In particular, they are making good progress on inspections of factories according to common standards and an operating manual for assessing building, fire and electrical safety.

Of course, the reality is that there is still much more to do.

Most urgently: implementing regulations on labour reform must be enacted soon.

Improvements in labour rights must be extended to the Export Processing Zones.

Bangladesh's labour law still needs to address restrictions on trade union formation and membership, no later than in the next iteration of the labour law reform.

The recruitment of labour inspectors needs to be accelerated, inspections need to proceed and their results published.

All the enabling conditions must be in place, not only in law but in practice, for workers to organise into trade unions and make their voice heard at the factory level. Inspections must be followed by structural improvements to improve safety. Bangladeshi industry has a key role to play here.

And there is still much for retailers and importers to do. Although the Compact does not cover the issue of compensation of victims, I welcome the statement by governments calling for further contributions to the Rana Plaza Arrangement by international retailers and Bangladeshi manufacturers as well as by the Government of Bangladesh.

I further welcome the joint ILO and OECD initiative to organise a High-Level Roundtable on Responsible supply chains in the textile and garment sector. We will support this forum for dialogue among all governments and stakeholders in these sectors and are ready to contribute financially to the development of further guidelines for this sector.

Over the coming weeks, the European Commission will be working on a full assessment of where we stand today. Once that is done we hope to call a meeting this autumn of all parties to the Compact as well as other stakeholders to get their perspective and set the agenda going forward.

Separately, the EU has also recently established ecological criteria for the award of the EU “Eco label” for textile products produced in observance of international standards developed by ILO, Standards, the UN Global Compact and the OECD Guidelines for Multi-National Enterprises. We have updated EU legislation on public procurement. Contracting authorities may take into account criteria linked to the production process of the works, services or supplies to be purchased and they may also require that specific labels are used certifying environmental, social or other characteristics, as long as this is done in a non-discriminatory manner and equivalent labels are accepted.


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