Govt allows trade unions in economic zones

Highlights

• Bangladesh to allow trade unions in economic zones, excluding EPZs
• Decision made due to international pressure, especially from US, EU, and ILO
• Labour rights clauses of Labour Act 2006 to be added to EZ Act
• Decision expected to protect workers' rights, freedom of expression, welfare
• Govt to announce trade unions in EZs by November
• The decision to be effective from FY2024-25
• Labour rights groups and activists welcome decision

In response to international pressure, the government has finally decided to allow trade unions in the factories within the country's economic zones to ensure labour rights.

Stakeholders say the government's decision has been influenced by pressure from the United States, the European Union, and the International Labour Organisation (ILO), despite objections from both domestic and foreign entrepreneurs who have invested in the economic zones.

The labour rights related clauses of the Labour Act 2006 will also be incorporated into the Bangladesh Economic Zones Act, they said.

However, factories in the country's export processing zones (EPZ) have been exempted from this decision.

According to sources, the government will make an official announcement about the introduction of trade unions in economic zones by November. It will be effective from the beginning of the upcoming fiscal 2024-25.

As per the Bangladesh Economic Zone Authority (Beza), the implementation of this decision is expected to ensure more effective protection of the rights, freedom of expression and the overall welfare of workers.

Bangladesh Economic Zone Authority Executive Chairman Sheikh Yusuf Harun told The Business Standard that the Prime Minister's Office and the Ministry of Law have embarked on an initiative to introduce trade unions within economic zone factories.

"This effort involves amending Section 34 of the Bangladesh Economic Zones Act 2010 to incorporate the existing provisions of the Labour Act concerning labour rights. It has been sent to parliament as a bill," he said.

"Relevant sections of the EPZ Act pertaining to labour rights were incorporated into the Beza Act. Instead of the previous sections, the provisions from Bangladesh Labour Act 2006 are now being substituted. Workers within economic zones will be entitled to additional rights afforded by labour laws, including the ability to establish trade unions," Sheikh Yusuf Harun added.

He went on to emphasise that both foreign and domestic entrepreneurs should align their investments with the laws of the country.

"The bill aimed at amending this law has been forwarded to parliament, where the relevant standing committee is currently reviewing it. If they deem it appropriate, the bill will be presented during the parliament session for further consideration."

According to the existing rules of the Bangladesh Export Processing Zone Authority (Bepza) and the Bangladesh Economic Zone Authority (Beza), there is no scope for workers to form trade unions or call for strikes. Instead, there is a provision for establishing a welfare association of representatives from both employers and workers.

Investors have long been expressing concern that allowing workers to organise trade unions and strikes may lead to labour unrest in factories located in EPZs and EZs.

On the decision of allowing trade unions in EZs, Farooq Hasan, president of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA), said, "The government has decided to introduce trade unions in economic zones under the pressure of the ILO and buyers. However, labour laws will not be fully enforced in economic zones, only the labour rights related sections of the labour law will be added."

Labour rights organisations and labour leaders and activists have welcomed the decision.

Joly Talukder, general secretary of the Bangladesh Garment Workers Trade Union Centre, told TBS that the imposition of the Bangladesh Labour Act in economic zones would be highly appreciated.

Babul Akhter, former general secretary of the Bangladesh Garments & Industrial Workers Federation, said, "We want freedom of trade unions like regular unions as per the ILO convention and the labour law in economic zones and export processing zones."

Bangladesh National Garments Workers Employees League President Sirajul Islam Rony said, "We always welcome any move of the government for workers' rights and wellbeing."

Decision after long drawn negotiation

Sources indicate that following the Rana Plaza collapse in 2013, the United States suspended Bangladesh's GSP benefits and issued a 16-point action plan. The plan encompassed the initiation of trade unions in EPZs, granting workers the right to call strikes, and the enforcement of pertinent sections of labour law.

Since then Bangladesh has resisted the establishment of trade unions in factories in EPZs, despite pressure from the USA, the ILO and the EU.

The condition has also been included in the EU's nine-point action plan to maintain Bangladesh's eligibility for the Everything but Arms (EBA) facility.

The EU also requested Bangladesh to provide a clear roadmap for the implementation of these action plans. Furthermore, they have emphasised that in order to continue receiving the EBA facility, a roadmap for executing the action plans must be submitted, as the EU is set to launch a new Generalised System of Preferences (GSP) scheme from 2024.

In this context, Bangladesh committed to executing the nine-point action plan by 2025 and presented a roadmap to the EU last year. In this roadmap, the government abstained from pledging to initiate trade unions in EPZs and EZs.

Subsequently, the EU sought explicit commitments from the government regarding the implementation of workers' rights under labour law, including the establishment of trade unions in EPZs and EZs. The ILO echoed the same.

Later, the government engaged in negotiations with the ILO, the US, and the EU.

However, the government maintained that, as per commitments made to foreign investors in EPZs, trade unions and worker strikes are not permitted in these zones. In contrast, EZs receive less foreign investment, and their products are destined for both domestic and international markets.

Consequently, the government consented to permit trade unions in EZs, a development later endorsed by the international parties.

A Beza official told TBS, "To avoid negatively affecting foreign direct investment [FDI], the government has refrained from introducing trade unions in EPZs. However, trade unions will be established in all categories of factories across the country, excluding EPZs. This encompasses industrial parks including 100 EZs under Beza and hi-tech industrial parks."

Under persistent foreign pressure, Law Minister Anisul Haque committed to introducing trade unions in the EZs during the ILO governing body council meeting on 21 March.

Subsequently, over the past few months, the Prime Minister's Office and the Ministry of Law have been actively engaged in meetings with relevant government agencies to amend the EZ Act in continuation of this commitment.

According to Trade Secretary Tapan Kanti Ghosh, during the US-Bangladesh Trade and Investment Cooperation Forum Agreement (Ticfa) Council last week, Bangladesh was advised to demonstrate substantial advancements in the revision of EZ Act before the upcoming ILO Governing Body Council session scheduled for November.