A Comparative Analysis Between the Bangladesh Labor Law 2006 and 7 General Codes of Conduct

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Bangladesh – German Development Cooperation

PROGRESS House 10C, Road 90, Gulshan 2, Dhaka 1212, Bangladesh Tel: +880 2 9887567, Fax: +880 2 8813769 E-mail: progress@gtz.de, Websites: www.gtz.de, www.gtz-progress.org

Working Paper No – 6

A COMPARATIVE ANALYSIS BETWEEN THE BANGLADESH LABOR LAW 2006 AND 7 GENERAL CODES OF CONDUCT By Ameena Chowdhury Hanna Denecke

Dhaka, October 21, 2007

PROGRESS (promotion of social, environmental and production standards in the ready-made garment sector) is a joint program of the Bangladesh Ministry of Commerce and the German Federal Ministry of Economic Cooperation and Development (BMZ), implemented by GTZ.

Executive Summary
The Readymade Garment (RMG) sector in Bangladesh is a highly export oriented sector and therefore extremely volatile to requirements of international buyers. Since the adherence to international social standards has become a mandatory requirement in the international business arena, the local suppliers have to be compliant to these standards in order to remain in business. There have been some significant revisions to the Bangladesh Labor Law in 2006. This newly revised law already covers a lot of the common standards like employment conditions, occupational health and safety issues as well as the ILO core labor standards. Besides being complaint to the national labor law, the suppliers must also adhere to the international standards. These international standards may be defined through their individual buyers’ codes of conduct or general codes of the conduct. Compliance to the buyers’ codes of conduct is mandatory but compliance to the general codes of conduct is optional unless the buyer accepts a specific general code as a substitute for its own audits or requirements. These voluntary monitoring or verification initiatives have taken root since the 1990s to add legitimacy and credibility to companies’ social and environmental compliance programs. This study is a comparative analysis of the Bangladesh Labor Law 2006 with seven internationally recognized general codes of conducts. The general codes of conduct are: • • • • • • • SA8000 of Social Accountability International (SAI) Base Code of the Ethical Trading Initiative (ETI) Fair Labor Association (FLA) Fair Wear Foundation (FWF) Business Social Compliance Initiative (BSCI) Worldwide Responsible Apparel Production (WRAP) Joint Initiative on Corporate Accountability and Workers’ Rights (JO-IN).

Besides, the JO-IN code, the other six codes are prevalent in the Bangladeshi RMG sector. The comparative analysis shows that the Bangladesh Labor Law 2006 significantly covers majority of the requirements of the different general codes of conduct. This indicates that if a factory is 100% compliant to the national law, it will cover approximately 85% of the requirements of the other general codes of conduct. Hence RMG factories should be encouraged to improve their compliance with the national law as a first step towards meeting the compliance demands of the brands and retailers who they supply to. The analysis does reveal that a few requirements are not fully or partially covered by the national labor law. It should be noted that the components which are not fully covered by the Bangladesh Labor Law are either covered by the Bangladesh Constitution or are not directly applicable in the Bangladesh context. This study clearly reveals that the revised Bangladesh Labor Law along with other supporting national legislations such as the Bangladesh Building Code and the Environmental Conservation Rules as well as the overall constitutional framework of Bangladesh, provides a comprehensive guideline for factories in the RMG sector to comply with majority of all international social compliance and environmental standards. Having good pieces of legislations establishes a solid platform for meeting national laws and internationally defined working standards. However, one of the main challenges is enforcing the laws....
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