Bangladesh Labor Law 2006 and 7 General Codes of Conduct Essay

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. 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. By being 100% compliant with the national labor law, a supplier has significantly met majority of the international requirements. The Bangladesh Labor Law has gone through some majority revisions in 2006 which has made it into a strong piece of legislation. However, it is not still 100% perfect. There are still few gaps and lackings which need to be adjusted and amended in the future. As implementation of the revised law is ongoing, numerous other deficiencies might gradually be identified over time. Since recent revisions just took place, another series of revisions are not anticipated in the near future. This comparative analysis of the newly revised Bangladesh Labor Law 2006 and seven general codes of conduct clearly illustrates where the commonalities and differences are. Overall, the recent revisions to the Bangladesh Labor Law and other national legislations that are associated with the RMG sector such as the Bangladesh Building Code and the Environmental Conservation Rules jointly provide comprehensive guidelines for RMG suppliers to manufacture and export products under socially and environmentally responsible working conditions which also meet majority of all prevailing international standards. 2. 1 General Codes of Conduct Definition of Codes The interest in the social situation of workers in developing countries has increased constantly over the last years in particular under civil societies and consumers in the industrialized countries. Social criteria have become an important part of consumer and investment decisions of individuals and organizations and therefore also big brands and retailers become more aware of compliance to social standards. Since Bangladesh is part of 1 A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of conduct he global market social compliance is extremely relevant for the export-oriented industry of Bangladesh, especially for the RMG sector. For competitiveness in the global markets, the compliance with environmental and social standards is a key point. Through modern information and communication technologies the economic activity of companies becomes increasingly transparent and makes it easier for the civil society to uncover and communicate social and ecological failure of multinational companies. Companies know about the vulnerability of their brand names and messages concerning bad working conditions can easily damage their image as well as the market position. A social responsible management policy is therefore in the long-term interest of the enterprise. However companies can have a positive influence on the economic development in the target countries through the introduction of social standards and on the same time improve their image and market share through social and ecologically responsible behavior. To address these issues voluntary monitoring or verification initiatives have taken root since the 1990s to add legitimacy and credibility to companies’ labor compliance programs. They are all voluntary, meaning that companies opt to participate in them. Each requires member companies to adopt its respective workplace code of conduct and verifies that they have complied with organizational requirements. Today, some industries have developed or are developing codes for the entire industry. That can be best seen for the apparel and footwear sector. General Codes of Conduct as well as buyers’ codes are very common in this industry. These codes of conduct are rules, which companies impose upon themselves in order to embody social and ecological goals in the enterprise. Companies formulate these rules mostly for itself and partly also for the suppliers and orient themselves with the formulation at the international regulations and agreements already mentioned. Codes of conducts may also be recognized as useful instruments to build on the companies’ image. A lot of companies are participating in this initiatives to show their interests in improving the working conditions of their business partners/suppliers across the global. Fair trade and buying practices are a competitive advantage for many businesses. The codes show their commitment to this process. Codes of conduct may be developed through a multistakeholder approach such as ETI etc. or companies may have their own codes of conduct which are specific for their suppliers or codes could be sector specific such as for garments, food, electronics etc. 2. 2 Basis of codes Social compliance can be measured in relation to a certain standard. Concerning environmental and quality management a multiplicity of standards and certification systems already exist. The introduction of examinable social standards represents however a new challenge. Internationally recognized social standards exist, e. g. ? United Nations Universal Declaration of Human Rights UN Convention on Children’s Rights UN Convention on the Elimination of all Forms of Discrimination against Women ? ILO Declaration on Fundamental Principles and Rights at Work ? Rio Declaration on Environment and Development However these are guidelines and recommendations which can be converted voluntarily. Standards that can be certified only exist to a small extent. Most of the codes refer to these mentioned international standards, especially the ILO core labor standards. The ILO formulates international standards in the form of conventions and recommendations setting minimum standards of basic labor rights: Freedom of association The right to organize 2 A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of conduct Collective bargaining Abolition of forced labor Equality of opportunity and treatment Besides the above mentioned standards, there are other standards regulating conditions across the entire spectrum of the work related issues. These principles are concretized in eight ILO conventions, in each case two for the four fundamental principles mentioned (see table 1). The ILO conventions are obligatory only if they are ratified by the member states. The entire number of the ratifications increased in the last years noticeably and varies – depending upon convention – in the order of magnitude between 148 and 172. Until July 2007, 128 countries had ratified all eight conventions. Bangladesh has ratified seven out of the eight core conventions. Table 1: ILO Core-Conventions and ratifications in Bangladesh1 Standard Freedom of association and bargaining Elimination of forced and compulsory labor Elimination of discrimination Abolition of child labor Convention Convention 87 (Freedom of association) Convention 98 (Right to organize; collective bargaining) Convention 29 (Forced labor) Convention 105 (Abolition of forced labor) Convention 100 (equal remuneration) Convention 111 (employment and occupation) Convention 138 (Minimum age) Convention 182 (worst forms of child labor) Ratification Yes Yes Yes Yes Yes Yes No Yes Codes of practice develop frequently from public pressure or are preventively developed. In addition to the mentioned core labor standards these codes include general working conditions like occupational health and safety, minimum wages, leave days and working hours. Other common aspects include women’s rights or environmental standards. Also the implementation of a management system can be a requirement. 2. 3 How codes evolved The overall aim of social standards is to protect the workers. During the industrialization in Europe they evolved as a reaction to bad working conditions in the newly emerging factories. The depletion of large parts of the workforce moved child labor, forced labor, freedom of association and collective bargaining as well as women’s rights in the centre of public attention. Socially responsible behavior – this means also ecologically responsible behavior – has its starting point predominantly in the developed industrialized countries. The observance of social standards must be further supervised also in these countries. The by far larger action needs lie however in developing and emerging countries. Through the increasing world-wide division of labor large parts of the production chain are located in developing countries which have deficits with the observance of social standards. While working abroad companies are supposed to be compliant to the legal regulations. In developing and emerging countries legal regulations do not always correspond to the domestic standards of the companies. So it can be difficult for companies to combine national legislation and generally recognized basic values. Even if the legislation in developing and emerging countries corresponds to the standards of the industrialized countries there are deficits in monitoring and implementation of the standards. 1 Refer to the ILO website: http://www. ilo. org/ilolex/english/docs/declworld. htm. 3 A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of conduct However an internationally defined and recognized social standard does not exist. Thus different stakeholder came up with the idea of codes of conduct to verify the compliance to international social standards. Social standards are extremely important in an industrialized world. Nowadays due to financial benefits, most companies outsource their production to developing countries where compliance to social standards is not as important. The problem is that consumers and respective governments ask for socially responsible behavior and working conditions and often the suppliers and governments of the developing countries cannot enforce or ensure compliance to these international standards. This issue has become a concern for the companies located in Europe and the USA and hence the companies came up with formulating codes of conduct which their suppliers have to adhere to if they want to do business with them. Companies started off by developing their own codes of conduct. Then gradually as the codes evolved, many companies teamed up with NGOs, trade unions, academia etc. to formulate common codes of conduct. Most general codes of conduct were developed with this multistakeholder approach. 2. 4 †¢ Classification of codes epending upon the standards they contain (all codes have similar requirements but differ in the definitions/design and some have also additional requirements e. g. waste management or anti-bribery policy); depending upon which organization or institution introduced the code and who controls the observance (companies, enterprise federations, trade unions, NGOs, management consultations or testing institutes); depending upon their members and their prevalence. Within these four categories subjects were identified as well as indicators to measure the implementation and coverage of the subjects. The indicators were selected according to the most common aspects of the general codes as well as the Bangladesh Labor Law. 2 Please refer to Annex I for a broad overview on the general codes of conduct. 4 A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of conduct Subjects of Codes of Conduct ILO Core Labor Standards Employment Conditions Occupational Health and safety