New rules to provide welfare fund for garment workers

Following negotiations and discussions with Bangladesh’s garment workers and officials of the Bangladesh Garment Manufacturers and Exporters Association, the country’s government has finalized rules to establish a new labor welfare fund.

“Garment factory owners will give 0.03 per cent of their total export earnings, which rmgwould be approximately $8 million per year, to the Bangladesh Labor Welfare Foundation, “ Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association, told WWD. “The money will be used for the workers, as well as money that will be available for compensation in the case of injury or death.”

The unsafe working conditions of Bangladesh’s garment workers came to light after the collapse of the Rana Plaza building complex in April 2013 and the Tazreen Fashions Ltd. fire in November 2012 — which claimed more than 1,240 workers’ lives altogether.

The details of the new rules will be published as a gazette very shortly, Azim told WWD.

Bangladesh — which is the second largest exporter of garments in the world, after China — exported $18.63 billion worth of garments from July 2014 to March 2015. According to WWD, the industry has been targeting exports of $27 billion by the end of the financial year in July.

In related news, The Benneton Group donated an additional $1.1 million to the Rana Plaza Donors Trust Fund last month. The Milan-based clothing company previously contributed $500,000 to BRAC, a Bangladesh-based non-governmental aid organization.

“With a tragedy of this scale, no financial contribution can ever really be enough, but we welcome Benetton’s decision to pay more than its calculated share of the fund based on the report published by PwC,” Avedis Seferian, president and CEO of Worldwide Responsible Accredited Production, told WWD back in April.

Seferian is referring to a report from independent assessors PwC that claimed The Benetton Group — which manufactured clothing inside the Rana Plaza building — owed retributions at $550,000.