    [Senate Hearing 113-147]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 113-147

                           LABOR ISSUES IN BANGLADESH

    =======================================================================

                                    HEARING

                                   BEFORE THE

                         COMMITTEE ON FOREIGN RELATIONS
                              UNITED STATES SENATE

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  JUNE 6, 2013

                                   __________

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                    COMMITTEE ON FOREIGN RELATIONS

                 ROBERT MENENDEZ, New Jersey, Chairman
    BARBARA BOXER, California            BOB CORKER, Tennessee
    BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
    ROBERT P. CASEY, Jr., Pennsylvania   MARCO RUBIO, Florida
    JEANNE SHAHEEN, New Hampshire        RON JOHNSON, Wisconsin
    CHRISTOPHER A. COONS, Delaware       JEFF FLAKE, Arizona
    RICHARD J. DURBIN, Illinois          JOHN McCAIN, Arizona
    TOM UDALL, New Mexico                JOHN BARRASSO, Wyoming
    CHRISTOPHER MURPHY, Connecticut      RAND PAUL, Kentucky
    TIM KAINE, Virginia
                   Daniel E. O'Brien, Staff Director
            Lester E. Munson III, Republican Staff Director

                                  (ii)

                                C O N T E N T S

                                  ----------
                                                                       Page

    Biel, Eric, Acting Associate Deputy Under Secretary for
      International Affairs, Bureau of International Labor Affairs,
      U.S. Department of Labor, Washington, DC.......................     9
        Prepared statement...........................................    11
        Responses to questions submitted for the record by Senator
          Jeanne Shaheen.............................................    62
    Blake, Hon. Robert, Assistant Secretary of State for South and
      Central Asian Affairs, U.S. Department of State, Washington, DC     4
        Prepared statement...........................................     5
        Responses to questions submitted for the record by Senator
          Robert P. Casey, Jr........................................    58
        Responses to questions submitted for the record by Senator
          Jeanne Shaheen.............................................    60
    Corker, Hon. Bob, U.S. Senator from Tennessee, opening statement.     3
    Drake, Celeste, Trade Policy Specialist, American Federation of
      Labor and Congress of Industrial Organizations, Washington, DC.    32
        Prepared statement...........................................    34
    Karesh, Lewis, Assistant U.S. Trade Representative for Labor,
      Office of the U.S. Trade Representative, Washington, DC........    13
        Prepared statement...........................................    14
        Responses to questions submitted for the record by Senator
          Robert P. Casey, Jr........................................    57
        Responses to questions submitted for the record by Senator
          Jeanne Shaheen.............................................    59
    Lubbe, Johan, International Labor and Employment Partner, Littler
      Mendelson, P.C., New York, NY..................................    41
        Prepared statement...........................................    43
    Menendez, Hon. Robert, U.S. Senator from New Jersey, opening
      statement......................................................     1

             Additional Written Statements Submitted for the Record

    Akter, Kalpona, executive director, Bangladesh Center for Worker
      Solidarity (BCWS)..............................................    67
    Kaufman, Peter J.................................................    64
    Qader, Akramul, Ambassador of Bangladesh to the United States....    73

                                     (iii)

                           LABOR ISSUES IN BANGLADESH

                                  ----------

                             THURSDAY, JUNE 6, 2013

                                           U.S. Senate,
                                Committee on Foreign Relations,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 11:01 a.m., in
    room SD-419, Dirksen Senate Office Building, Hon. Robert
    Menendez (chairman of the committee) presiding.
        Present: Senators Menendez, Casey, Murphy, Kaine, Corker,
    and McCain.

              OPENING STATEMENT OF HON. ROBERT MENENDEZ,
                      U.S. SENATOR FROM NEW JERSEY

        The Chairman. This hearing of the Senate Foreign Relations
    Committee will come to order.
        I know that the ranking member, who was just with me on the
    floor voting, will be here any minute. My apologies to our
    witnesses for the delay, but there were several votes on the
    Senate floor, and that is one thing we do not control the
    timing of.
        It is not often that the Foreign Relations Committee holds
    a hearing like this. In fact, the last labor hearing this
    committee chaired was the debate giving PNTR status to China in
    2000, so it has been a while. But as I said in an op-ed that
    was published today, the tragedy at Rana Plaza--the deadliest
    accident of the global apparel industry--should be a wake-up
    call for all of us.
        We have a range of witnesses in our two panels this
    morning, from the State Department, the Department of Labor,
    the Office of the U.S. Trade Representative, the AFL-CIO, and a
    representative from the American retail and apparel
    manufacturers.
        We have also received written testimony from outside
    groups, and I ask unanimous consent that their testimony be
    included for the record. And without objection, it will be.
        The Chairman. I also want to recognize the Bangladeshi
    Ambassador to the United States who is with us in the audience
    today. Welcome, Ambassador Qader, and thank you for being here.
        Let me say how much the United States values its
    relationship with Bangladesh, a moderate, Muslim-majority
    democracy and a trade partner with annual flows topping $6
    billion and supporting 10,000 American jobs.
        As the world's seventh most populous country, Bangladesh
    has made dramatic strides on everything from global food
    security to gender equality to maternal and child health, and
    we applaud those elements. But, not unlike other apparel
    exporters, Bangladesh is a poor, developing country with lots
    of economic challenges. What sets it apart from other countries
    is the sheer size of the industry and the rate of growth. In my
    view, what happens in Bangladesh will have a dramatic ripple
    effect on the global apparel industry. A change in working
    conditions there has the potential to change conditions for
    workers everywhere.
        That is one reason why we want global retailers to stay in
    Bangladesh, to work together and adopt industrywide standards
    to do everything possible to improve working conditions and
    make sure another Rana Plaza never happens again, anywhere in
    the world.
        The fact is, most of us in this room own clothing that was
    made in Bangladesh, the second-largest supplier of clothes.
    Major American retailers--Target, Gap, Tommy Hilfiger, Calvin
    Klein, and Walmart--all buy apparel from Bangladesh.
        The reasons are clear: labor is cheaper in Bangladesh; the
    regulatory process is more flexible in Bangladesh; hours,
    working conditions, and building safety concerns clearly are
    less cumbersome in Bangladesh; and that means products are
    cheaper and profit margins are higher.
        The Bangladeshi apparel industry now employs about 4
    million, at least 80 percent of whom are women. It finances the
    government and influences its politics. It is no coincidence
    that numerous members of Parliament have ties to the garment
    industry. The question is, Are we seeing a global race to the
    bottom?
        Bangladesh offers some of the cheapest labor in the world
    with limited workers' rights and protections. As a result,
    global retailers enjoy high profits, and global consumers
    delight in low costs. So how can we improve conditions without
    prices going up and manufacturers moving on to the next
    Bangladesh?
        Today, with the Rana Plaza collapse that killed at least
    1,127, and the Tazreen factory fire in November which killed at
    least 112 workers in conditions similar to the Triangle
    Shirtwaist Factory fire, and 44 more factory fires since, the
    brand ``Made in Bangladesh'' is in jeopardy.
        Just as the Triangle Shirtwaist fire galvanized the labor
    movement in the United States over 100 years ago, Rana Plaza
    and Tazreen should be a turning point toward real systematic
    change in Bangladesh, and we can only hope.
        As the son of a seamstress who worked in the factories of
    northern New Jersey, and worked very hard under some very
    difficult conditions but far better than in Bangladesh, I know
    firsthand how difficult this work can be, but it should never
    be fatal.
        Since Rana Plaza, the Bangladeshi Government has committed
    to a number of steps to improve conditions, including amending
    its labor laws, raising the minimum wage for garment workers,
    registering more trade unions, and increasing the number of
    building inspectors. But unfortunately, past promises have gone
    largely unfulfilled.
        Bangladesh has a long way to go in shifting from a culture
    favoring corruption to one that is friendlier to workers,
    enforcing prolabor legislation, allowing for the freedom of
    association without repercussion, and enforcing building and
    fire inspection codes.
        But factory owners must do their part, as well, to bring
    the workplace up to code. A recent survey by Bangladeshi
    engineers found that 60 percent of the factories it inspected
    are vulnerable to collapse. With somewhere between 3,000 and
    5,000 factories, the sheer scale of the problem is mind-
    boggling.
        Global retailers have a real role to play. Major European
    retailers have signed a binding building and fire safety
    agreement, but American retailers and manufacturers now need to
    cooperate on a similar industrywide plan that includes
    workplace safety standards, cost-sharing for improvements, and
    compensation for injured workers. It is time for collective
    action if there is going to be any systemic change. Absent
    significant collective changes that improve labor conditions
    and worker safety, the administration should seriously consider
    suspending, with conditions, the Generalized System of
    Preferences benefits to Bangladesh.
        While only a small fraction of Bangladesh's exports would
    be affected, given ongoing violations of the GSP workers'
    rights criteria, GSP suspension would send a strong signal that
    the United States is serious about protecting workers and
    improving workplace safety.
        With that, let me turn to the ranking member, Senator
    Corker, for his remarks.

                 OPENING STATEMENT OF HON. BOB CORKER,
                      U.S. SENATOR FROM TENNESSEE

        Senator Corker. Thank you, Mr. Chairman. I appreciate you
    having the hearing; and the two panels of witnesses we have, we
    thank you for coming today.
        I think all of us have seen the images of what happened in
    Bangladesh, and our heart goes out to people who are trying to
    make a living and working in conditions obviously that were not
    safe. So I appreciate you having this hearing.
        I think the most important objective that we can accomplish
    today is to determine how all the stakeholders can figure out
    how to move ahead in a way that is far more safe and keeps this
    kind of thing from happening again. Obviously, there are a lot
    of stakeholders. I mean, it is not just the people that have
    been mentioned but the Government of Bangladesh, the unions,
    the workers, the United States, the European Union, and many
    other governments, and also the garment industry factory owners
    and others.
        It is my understanding that here in the United States,
    retailers are working together toward something that I hope is
    going to be sustainable. I think the goal is to have that done
    by the end of the month, and I think this hearing will help us
    toward that end.
        So I appreciate the witnesses being here. I know that all
    of us want to see a sustainable, long-term solution. There are
    a lot of stakeholders involved here, and I think the goal of
    this hearing should be to come up with a solution that we know
    is in the long-term interests of all involved.
        So I appreciate you being here, and I appreciate the
    chairman calling this hearing.
        The Chairman. Thank you, Senator Corker.
        Let me introduce our first panel.
        Assistant Secretary of State for South and Central Asian
    Affairs, Robert Blake.
        Eric Biel, who must have one of the longest business cards
    in Washington, is the Acting Associate Deputy Under Secretary
    for International Affairs, Bureau of International Affairs in
    the Department of Labor.
        That is quite a title, Eric. I hope you get compensated
    commensurate with that title.
        And Mr. Lewis Karesh, who does not have quite as long a
    title but plays a very important role as the Assistant U.S.
    Trade Representative for the Labor Office of the U.S. Trade
    Representative.
        Thank you all for being here.
        Mr. Secretary, we will start off with you. Your full
    statements will be included in the record, without objection.
    We ask you to synthesize it to around 5 minutes so that we can
    then have a good conversation.

     STATEMENT OF HON. ROBERT BLAKE, ASSISTANT SECRETARY OF STATE
    FOR SOUTH AND CENTRAL ASIAN AFFAIRS, U.S. DEPARTMENT OF STATE,
                             WASHINGTON, DC

        Mr. Blake. Well, thank you, Chairman Menendez and Ranking
    Member Corker, and all the other members of this committee, for
    this opportunity to speak to you today about labor issues in
    Bangladesh. I am very honored to join my colleagues Eric Biel
    and Lewis Karesh before this committee today.
        Mr. Chairman, as you said, engagement on labor issues is
    part of our broad and expanding partnership with Bangladesh's
    Government and its people. Bangladesh works closely with us on
    all of the President's signature development initiatives in
    climate, health, and food security, and in encouraging greater
    regional integration and connectivity.
        In the past two decades, as you remarked in your very
    constructive op-ed, Bangladesh has made remarkable development
    progress, in part because of the growth of its ready-made
    garment sector. Despite the benefits the industry has brought,
    however, the tragedies at Rana Plaza and Tazreen Fashions have
    made clear that significant challenges remain.
        Our goal is to help Bangladesh continue to build on its
    economic achievements but to do so in a way that ensures the
    growth of its export sector, does not come at the expense of
    safe and healthy working conditions.
        We believe three key reforms are particularly important to
    improving labor rights and conditions in Bangladesh,
    guaranteeing workers' rights to organize, guaranteeing fire
    safety, and ensuring structural soundness of factories and
    other facilities.
        Last month, Secretary Kerry underscored to Bangladeshi
    Foreign Minister Moni that the recent tragedies and weak
    progress on labor rights and safety had undermined the
    Bangladesh brand and placed the country's future development at
    risk. He urged Bangladesh to make transformative and
    sustainable improvements in worker rights and working
    conditions. He pressed for further labor union registrations
    and the enactment of amendments to the labor law that will
    address freedom of association and worker safety.
        These changes would enable the International Labor
    Organization and the International Finance Corporation to
    launch a better work program for the garment industry in
    Bangladesh that would lead to still more improvements. We hope
    that these changes will be enacted by Parliament before the end
    of this month.
        We are seeing some results of our advocacy, 27 trade unions
    registered since September 2012, the signing of a comprehensive
    fire safety plan, and a Bangladeshi commitment to dramatically
    increase the number of government labor inspectors.
        We have also engaged United States companies sourcing from
    Bangladesh. On May 8, Special Representative for International
    Labor Affairs, Barbara Shailor, and I, along with colleagues
    from USTR and the Department of Labor, organized a conference
    call with United States buyers, and we urged them to coordinate
    efforts with each other and with European counterparts to
    communicate their concerns about labor conditions to key
    officials in Bangladesh, and to provide assistance to
    independent safety and fire inspectors. We shared our best
    practices for companies operating in Bangladesh, which I have
    submitted along with my written statement.
        Mr. Chairman, Bangladesh is now at a critical moment in its
    history. Last week, Ambassador Mozena met with leaders in a
    recently formed union in the garment industry, one of the 27
    unions that I mentioned. These workers highlighted their
    successful efforts since forming the union to improve factory
    floor conditions such as obtaining potable water, a clean lunch
    room, the removal of electrical hazards, and the unblocking of
    exit stairwells. Their efforts show the potential for a broader
    sea change in Bangladesh's approach to labor issues, but much
    more work needs to be done.
        Our hope is that Bangladesh will seize the current moment
    to strengthen labor rights and improve working conditions. This
    administration wants to see Bangladesh succeed, and we will
    remain engaged with all the relevant actors, both here and
    overseas, to support those efforts.
        So again, I thank you, Mr. Chairman, for your interest in
    this important endeavor, and I look forward to taking your
    questions.
        [The prepared statement of Mr. Blake follows:]

             Prepared Statement of Assistant Secretary Robert Blake

        Good morning. Thank you Chairman Menendez, Ranking Member Corker,
    and all the members of the committee for this opportunity to speak with
    you today regarding labor issues in Bangladesh. Your interest and
    engagement will play a vital role as the Government of Bangladesh moves
    to address important labor rights issues.
        The tragic collapse of the Rana Plaza building in April and the
    deadly fire at the Tazreen clothing factory last November have resulted
    in unprecedented public concern about labor conditions in Bangladesh.
    Since long before these tragedies, we have been working hard on the
    fundamental labor rights concerns that these events have highlighted.
    We are continuing and expanding our efforts.
        Before delving into our efforts on the labor front, I would like to
    note that our engagement with the government and people of Bangladesh
    is broad--and it is growing still broader, reflecting the important
    strides that Bangladesh has made over the past decades. The policy
    choices Bangladesh has made have led it to a path of economic growth,
    impressive gains for women and children, successful work combating
    terrorist networks, and an increasingly prominent role in multilateral
    organizations.
        Indeed, over the past two decades, Bangladesh has made remarkable
    development progress. Life expectancy has increased by 10 years, infant
    mortality has declined by nearly two-thirds, female literacy has
    doubled, and economic growth has averaged over 5 percent annually. A
    vibrant democracy has taken root in the world's third-largest Muslim-
    majority nation and seventh most populous country. Bangladesh offers a
    moderate, tolerant, secular, democratic alternative to violent
    extremism. As the largest contributor of forces to U.N. peacekeeping
    missions in some of the world's most dangerous conflicts, Bangladesh is
    committed to sharing its experiences with the world. Bangladesh also is
    a focus country for all of the President's signature development
    initiatives, including Global Health, Global Climate Change, and Feed
    the Future.
        Over Memorial Day weekend, Under Secretary of State Sherman
    travelled to Dhaka to lead the U.S. delegation at the second annual
    U.S.-Bangladesh Partnership Dialogue. The dialogue highlighted the
    robust ties between the United States and Bangladesh and reaffirmed our
    commitment to further broaden, deepen, and strengthen the partnership.
    The discussions focused heavily on labor rights and working conditions,
    but they also covered the full range of our relations, including our
    close cooperation on security issues, Bangladesh's leading role
    supporting regional integration, and our growing trade relationship.
    The United States and Bangladesh cooperate closely on security issues
    ranging from counterterrorism to counterpiracy and the mitigation of
    natural disasters. The Government of Bangladesh has also consistently
    prioritized improved relations with India and greater regional economic
    integration--a key U.S. interest in a region that remains among the
    least integrated in the world.
        As Under Secretary Sherman said in Dhaka, ``The success of the
    Bangladesh story has implications not just for Bangladeshis, but for
    the entire global community. Millions around the globe see Bangladesh
    as a powerful model for democratic and economic development and seek to
    replicate its success.''
        Bangladesh's development gains have come in part because of the
    growth of its ready-made garment sector, now the second-largest in the
    world behind China, a sector that employs between 2 and 3 million
    Bangladeshi women, helping to lift them out of poverty and empowering
    them socially and economically. Despite the benefits the industry has
    brought, however, the tragedies at Rana Plaza and the Tazreen Fashions
    have made clear that significant challenges remain to ensure that
    workers fully benefit from this growth.
        In interactions with the Government of Bangladesh, with U.S.
    companies sourcing from Bangladesh, with factory owners in the country,
    with labor rights groups, and with our partners in Europe, our goal is
    to help Bangladesh continue to build on its economic achievements, but
    to do so in a way that ensures that the growth of its export sector
    does not come at the expense of safe and healthy working conditions and
    respect for worker rights. Success will depend on the will and
    commitment of Bangladeshis in government, in industry, and in the labor
    community to come together to change the culture of workplace safety
    and worker rights in Bangladesh.
        We believe three key reforms are particularly important to improve
    workers' lives in the near term: guaranteeing workers' rights to
    organize, guaranteeing fire safety, and ensuring structural soundness
    of factories and other facilities. I would like to briefly highlight
    some of the actions the State Department, working closely with
    colleagues from the Department of Labor and the United States Trade
    Representative (USTR) have been taking to achieve these and other
    important goals in Bangladesh:

       Last month, during a meeting at the State Department,
            Secretary Kerry underscored to Bangladeshi Foreign Minister
            Dipu Moni that the recent tragedies and weak progress on labor
            rights and working conditions are contrary to Bangladesh's own
            expressed goal of improving workers' lives, have undermined the
            Bangladesh brand, and have placed the country's future
            development at risk. Secretary Kerry encouraged the Bangladeshi
            Government to respond to these tragedies by making
            transformative and sustainable improvements in workers' rights
            and working conditions.
       Secretary Kerry pressed for continued labor union
            registrations as well as enactment of amendments to the
            country's labor law that will allow for the creation of a
            ``Better Work'' program, backed by the International Labor
            Organization (ILO) and the International Finance Corporation.
            Proposed in 2010 and funded in part by the U.S. Department of
            Labor, this program would strive to achieve sustainable
            improvements in working conditions in the garment sector. The
            labor law amendments we seek, which have been negotiated by
            stakeholders with help from a related ILO project, would
            strengthen the rights of workers to organize and negotiate with
            their employers and would improve some aspects of workplace
            safety. Specifically, they would (1) abolish a requirement that
            the Ministry of Labor inform factory owners of the names of
            workers applying for union registrations; and (2) allow unions
            access to outside expertise during collective bargaining
            negotiations. These amendments have been approved by the
            Bangladeshi Cabinet, and we have been working to make sure they
            are adopted by Parliament by the end of the month.
       Under Secretary Sherman carried the same messages in her
            discussions in Dhaka as part of the Partnership Dialogue and in
            her meetings with Prime Minister Hasina and Foreign Minister
            Moni over the Memorial Day weekend.
       U.S. Ambassador to Bangladesh Dan Mozena has met repeatedly
            with industry leaders, including the Bangladesh Garment
            Manufacturers & Exporters Association, and with the Bangladeshi
            Government to emphasize the need for concrete action following
            the Rana Plaza tragedy. Our Embassy worked with the ILO and
            industry, labor, and government representatives to secure a
            pledge to recruit 200 additional building safety inspectors
            within 6 months, with the eventual goal of adding another 800
            inspectors. Separately Bangladesh manufacturers are also
            working with the German development organization GIZ and BRAC,
            a leading Bangladeshi NGO, to create a 300-person inspectorate
            focused on fire safety.

        These engagements come after many months of efforts, predating the
    Rana Plaza collapse, in which we have sought to effect change on a
    range of labor rights and workplace safety concerns. We are seeing some
    results: our advocacy has been an important factor leading to the
    registration of 27 trade unions since September 2012 (compared to 3 in
    the previous 5 years); signing of a comprehensive fire safety plan; and
    a significant Bangladeshi commitment to dramatically increase the
    number of government labor inspectors. However, there are areas where
    we still need to see progress and we will continue to press the
    Government of Bangladesh to address our concerns in these areas. Some
    of these concerns could be resolved relatively quickly--such as
    registration of labor-related nongovernment organizations and court
    cases against labor activists, while others will require sustained,
    long-term investment--such as building the capacity of government
    inspectorates.
        We have also engaged with U.S. manufacturers and retailers sourcing
    from Bangladesh. On a regular basis, our officers are briefed by major
    U.S. buyers so we have a good sense of their unfolding concerns. Over
    the past year, as our concerns about workplace safety and labor
    conditions continued, I and my colleagues in State and across the U.S.
    Government began to convene larger conference calls open to all U.S.
    companies to share with them the steps we were taking, and hear from
    them about theirs. Most recently, on May 8, Special Representative for
    International Labor Affairs Barbara Shailor and I, along with
    colleagues from USTR and the Department of Labor, led a conference call
    with U.S. buyers that source from Bangladesh's garment industry. We
    urged them to coordinate efforts with each other, with the Government
    of Bangladesh and BGMEA, and with civil society and labor groups on
    factory safety and fire initiatives, including helping pay for
    independent safety and fire inspectors. We encouraged the buyers to
    communicate their concerns about labor conditions to the BGMEA and the
    Bangladeshi Government, and to urge prompt passage of the labor law
    amendments I referenced earlier.
        In calls with buyers in March and again in May we reviewed our
    expectations of U.S. companies' engagement and shared a ``Best
    Practices for Companies Operating in Bangladesh'' document (attached).
        As many of you know, more than 40 brands, mostly from Europe but
    including U.S. companies PVH, Abercrombie & Fitch, and now Sean John,
    have coalesced around an accord developed in coordination with the
    global union IndustriALL that is intended to improve working conditions
    and respect for worker rights in Bangladesh, while also making clear
    the brands' commitment to continue to source from Bangladesh. The
    Accord involves worker organizations, brings multiple retailers
    together behind one initiative, fosters information sharing, and
    commits retailers to invest in improving workplace safety and other
    labor standards. We recognize that U.S. companies must make their own
    judgment about whether or not to sign the Accord, but we have
    encouraged them to carefully examine what they can do to support
    improved working conditions in Bangladesh.
        I should also note that at the same time we are engaging with the
    Government of Bangladesh, industry, and labor groups, USTR is leading
    the administration's review of Bangladesh's Generalized System of
    Preferences (GSP) trade benefits. My colleague from USTR, Lewis Karesh,
    will discuss more about the GSP review in a moment.
        Bangladesh is now at a critical moment in its history. Over a
    century ago, our country confronted a similar challenge. After the 1911
    Triangle Shirtwaist Factory fire in New York killed 129 workers,
    political momentum was created from that tragedy to transform our
    approach to workplace safety and building codes. Within Bangladesh, the
    Tazreen and Rana Plaza tragedies may create a similar impetus for
    significant and lasting improvements in worker rights and working
    conditions.
        Last week Ambassador Mozena met with leaders in a recently formed
    union in the garment industry, one of the 27 new unions which have been
    registered since last fall that I mentioned earlier. These workers
    highlighted to the Ambassador their successful efforts, since forming
    the union, to improve factory floor conditions, such as obtaining
    potable water, a clean lunchroom, the removal of electrical hazards,
    and the unblocking of exit stairwells. This one case shows the
    potential of a broader sea change in Bangladesh's approach to labor
    issues. Still, more work needs to be done, and more unions need to be
    registered.
        Our hope is that Bangladesh will seize the current moment to
    strengthen its protection of labor rights and improve working
    conditions. We want to see Bangladesh succeed, and we will remain
    engaged with all the relevant actors to support those efforts.

    Attachment:

             U.S. Government Recommendations on Best Practices for
                    Companies With Operations in Bangladesh

        On Tuesday, March 5, 2013, Assistant Secretary of State for
    Democracy, Human Rights, and Labor Michael Posner and Assistant
    Secretary of State for South and Central Asia Robert Blake hosted a
    conference call with over 70 U.S. brands and civil society groups to
    discuss fire safety issues in manufacturing facilities in Bangladesh.
    On the call, Assistant Secretary Posner and Assistant Secretary Blake
    summarized important labor rights issues, including the status of the
    Aminul Islam case, union registrations, and legal reforms. They also
    outlined what the U.S. Government views as best practices for companies
    with operations in Bangladesh. Eric Biel, Acting Associate Deputy Under
    Secretary for International Affairs at the Department of Labor,
    discussed his recent trip to Bangladesh, including numerous meetings on
    fire safety and labor law reform, and possible areas for bilateral
    technical assistance.
        Unsafe working conditions in Bangladesh were brought into the
    international spotlight by the Tazreen factory fire of November 2012,
    the worst of many deadly manufacturing fires in the country in recent
    years. The ILO has been engaged with the Government of Bangladesh on a
    Tripartite National Action Plan on Fire Safety to address this issue,
    and as of today the Plan is being finalized by the Ministry of Labor
    and Employment. They also have worked with the Government to identify
    necessary steps, including reforms to labor law and an improved and
    more transparent union registration process, to create an ``enabling
    environment'' for the establishment of a Better Work program.
        The National Action Plan and Better Work program both offer
    opportunities to sustainably improve labor standards in Bangladesh and
    could both benefit from the support and cooperation of international
    buyers, including in coordination with buyers' own initiatives. The
    practices outlined below are recommendations from the U.S. Government
    to U.S. brands as they promote respect for human rights and
    international labor standards, as well as encourage engagement with the
    Government of Bangladesh and other stakeholders on these issues.
        1. Act Collectively: Companies should work together to figure out
    how they can make a difference collectively. And it's important that
    responses meet three criteria: they're credible; they're relevant; and
    they're effective. There are several ongoing collaborative initiatives
    in various stages of development. We encourage companies to link
    efforts on labor and human rights with collaborative work being done
    through multi-stakeholder initiatives, third-party auditors, industry
    associations, and cooperative agreements. The Tripartite National
    Action Plan on fire safety may offer entry points for buyers and civil
    society to support and enhance a Bangladesh-owned process to improve
    fire safety.
        2. Develop Broad Principles and Policies and Procedures for
    Implementation: Companies should have clearly defined labor and human
    rights principles, policies and procedures that guide their behavior
    and that of their suppliers and subcontractors. Such policies should be
    based on internationally recognized human rights and international
    labor standards and there should be effective and transparent means of
    monitoring compliance. Senior leadership of the companies should
    visibly support such efforts and encourage implementation throughout
    the entire supply chain.
        3. Develop Credible Internal Benchmarks: In order to assess
    progress and effectiveness, companies should have internal metrics to
    manage and measure performance on labor and human rights.
        4. Conduct Independent Third-Party Verification: Third-party
    verifiers should assess performance of company policies and procedures.
    Inspections by verifiers should be thorough, timely, unannounced,
    independent, and include confidential interviews and consultations with
    workers about workplace conditions. Inspections should look at serious
    and common hazards, implementation of the local law and respect for
    internationally recognized human rights and international labor
    standards, and mechanisms for tracking non-compliance with company
    policies and procedures.
        5. Corrective Actions and Penalties: Corrective action may be
    necessary to address non-compliance with company policies and
    procedures at any point in the supply chain. When suppliers are found
    to be in non-compliance, there should be timely identification and
    financial or technical assistance to help address hazards in factories.
    There should be contractual penalties for non-compliance that are clear
    and meaningful. Also, when non-compliance is discovered, corrective
    actions should be shared with stakeholders to the extent possible and
    appropriate to disseminate lessons learned and best practices for
    avoiding or mitigating future incidents.
        6. Cultivate Worker Voice and Education: In manufacturing
    facilities within a company's supply chain, buyers should seek to
    engage with workers to (a) promote education; (b) prevent retaliation
    against those reporting hazards; and (c) compensate workers, including
    those put out of work during corrective actions. Companies should
    communicate with workers through legitimate representatives selected by
    the workers themselves, and should avoid factories where no such
    representative mechanism exists.
        7. Share Information: Companies should share information with each
    other, stakeholders, and relevant host government officials about
    factories that fail to comply with policies and procedures or
    corrective measures, so as to bring the greatest leverage to bear with
    the greatest effect, and to avoid undercutting each other's efforts.
    Information-sharing will ensure maximum coordination and knowledge.
        8. Work with Stakeholders: Draw on the expertise and experiences of
    other companies, NGOs, unions, the ILO, the Government of Bangladesh,
    and others to develop sophisticated responses to the current human
    rights challenges.

        The Chairman. Mr. Biel.

    STATEMENT OF ERIC BIEL, ACTING ASSOCIATE DEPUTY UNDER SECRETARY
       FOR INTERNATIONAL AFFAIRS, BUREAU OF INTERNATIONAL LABOR
           AFFAIRS, U.S. DEPARTMENT OF LABOR, WASHINGTON, DC

        Mr. Biel. Mr. Chairman, thank you for the kind
    introduction. I know the job title is a mouthful, and I
    appreciate your getting all the words in there. I am delighted
    to be here with my friends and colleagues, Assistant Secretary
    Blake and Assistant USTR Karesh. Thank you, Ranking Member
    Corker, and Senators Casey, Kaine, and Murphy as well. We are
    pleased on behalf of the Department of Labor to be able to
    participate in this important and timely committee hearing on
    Bangladesh.
        We have been deeply engaged at the Department, working with
    our colleagues at State, USTR, and elsewhere in the Government,
    with the Government of Bangladesh, with workers and other civil
    society organizations, with United States buyers and retailers,
    and with other stakeholders on a range of crucial labor-related
    issues, both legal and policy.
        Now, this is not something new, by any means. The
    engagement has gone on for some time. But certainly it has
    increased and intensified in recent months in the wake of the
    Tazreen fire at the end of November that you, Mr. Chairman,
    mentioned, and then the terrible Rana Plaza building collapse
    in late April.
        We have pressed the Government of Bangladesh to address
    issues in areas ranging from the ready-made garment sector,
    which we have already focused on, to the shrimp processing
    sector, to the governance of Bangladesh's export processing
    zones. We have also pressed on a number of other labor rights
    concerns, including but not limited to the investigation of the
    murder some 14 months ago of labor organizer, Aminul Islam.
        In this regard, we are also working closely with the
    International Labor Organization, the ILO, on a number of
    fronts in Bangladesh, having funded--when I speak of having
    funded, the Department of Labor having funded--different ILO
    projects to promote labor rights and workplace safety in
    Bangladesh.
        Our coordination with the ILO includes, as Assistant
    Secretary of State Blake already mentioned, close engagement
    with the ILO-International Finance Corporation-run Better Work
    Program. Last fall, Better Work's management team set out
    several labor issues that it expected the Government of
    Bangladesh to address prior to any launch of a new Better Work
    Program in the ready-made garment sector in Bangladesh.
        Now, if the Better Work leadership team determines that the
    time has come to launch a program there, it will be a major
    program given the size of the sector, and we will be closely
    engaged in the implementation process of that program moving
    forward.
        We are also working with parties in Bangladesh and with the
    ILO with respect to commitments specifically on fire and
    building safety made under the umbrella of the ILO-Facilitated
    National Tripartite Plan of Action that was announced by the
    Government of Bangladesh and other stakeholders in mid-March.
        Finally, the Department of Labor is prepared and ready to
    play a direct role in helping to address these fire and
    building safety concerns and other workers' rights concerns
    that were illustrated so dramatically and tragically by the
    Tazreen fire and the Rana Plaza building collapse. We have
    crafted a detailed plan to provide funding to one or more
    grantees to help strengthen the capacity of both the Government
    of Bangladesh and workers' organizations within the country to
    improve fire and building safety in the ready-made garment
    sector as part of our overall technical assistance programs,
    and we have posted notice of that, what we call a Notice of
    Intent, and will be issuing the full project proposal very
    shortly.
        Finally, in my remaining time, a few words about the role
    that the private sector can and must play to help advance
    positive change, Mr. Chairman, as you mentioned, for workers in
    Bangladesh.
        Within Bangladesh, it is essential that the powerful
    garment industry do more to ensure workplace safety and greater
    respect for worker rights. In addition, buyers and retailers
    need to play a more active role in addressing labor concerns in
    their supply chains from Bangladesh, as you also talked about
    in both your op-ed and opening statement.
        Assistant Secretary Blake's testimony referenced what has
    come to be known in the last few weeks as the IndustriALL
    Accord; the agreement between several workers' organizations
    and more than 40 brands, including three from the United
    States, primarily Europe, but also three from the United States
    and one from Canada. As important as any particular element of
    that agreement, and I know you will be hearing more details of
    that agreement in the second panel from different perspectives,
    but as important as any particular element of that agreement is
    its likely impact on workers. It creates a clear and
    enforceable plan for sustained buyer engagement, as well as
    financial obligations and commitments to continued sourcing
    from Bangladesh, something that is of critical importance to
    those who depend on the garment sector, as you mentioned,
    largely young women, 80 percent of the workforce, as a stepping
    stone to a better life.
        So in sum, Mr. Chairman, members of the committee, our goal
    in all of this is not to stifle Bangladesh's remarkable story
    of growth and development, but rather to work with the
    government, industry, workers and other civil society groups,
    and others to ensure that job creation and economic development
    go hand in hand with increased respect for worker rights and
    improved workplace health and safety.
        Thank you again for the opportunity to testify, and
    following Mr. Karesh's testimony, we look forward to your
    questions and dialogue.
        [The prepared statement of Mr. Biel follows:]

                       Prepared Statement of Eric R. Biel

        Good morning. Chairman Menendez, Ranking Member Corker, and members
    of the committee, thank you for inviting the Department of Labor to
    participate in this important and timely hearing concerning labor
    issues in Bangladesh. I am honored to join my colleague, Assistant
    Secretary of State Blake, in appearing before you this morning. We look
    forward to working closely with you and other Members of Congress in
    the days and weeks ahead to improve the protection of workers' rights
    and strengthen workplace safety in Bangladesh.
        The Departments of State and Labor, the Office of the U.S. Trade
    Representative, and others in the U.S. Government are deeply engaged
    with the Government of Bangladesh, workers' and other civil society
    organizations, U.S. buyers and retailers, and other stakeholders both
    in the United States and Bangladesh on a range of critical labor-
    related legal and policy issues.
        This is not something new by any means; indeed, last summer,
    Assistant Secretary Blake and I appeared together before a House panel
    to discuss a number of longstanding labor and trade policy challenges
    in Bangladesh--nearly all of which remain front and center for us
    today.
        At the same time, the focus on Bangladesh has increased
    considerably over the past several months in the wake of the tragic
    Tazreen Fashions factory fire last November, subsequent garment factory
    fires that fortunately caused less loss of life, and then the horrific
    Rana Plaza building collapse about 6 weeks ago.
        We are continuing to move forward with the interagency process,
    chaired by our colleagues at the Office of the U.S. Trade
    Representative, to determine the appropriate actions under our
    Generalized System of Preferences (GSP) trade preference program.
    Different options remain under consideration, and a decision will be
    announced before the end of this month.
        Through regular engagement with the Government of Bangladesh--
    including during a weeklong trip I made to Dhaka in late February that
    included meetings with senior officials across different ministries and
    leaders from industry and workers' and civil society organizations--we
    have pressed the government to address issues in areas ranging from
    workers' rights and working conditions in the ready-made garment and
    shrimp processing sectors to the governance of Bangladesh's Export
    Processing Zones.
        We have also pressed on a number of other labor rights concerns,
    including with respect to the investigation of the murder 14 months ago
    of labor organizer, Aminul Islam, and the treatment of the Bangladesh
    Center for Workers Solidarity (BCWS)--the workers' advocacy
    organization with which he was affiliated--and its leadership, as well
    as the organization Simple Action for the Environment (SAFE). While
    modest measures have been taken, much more remains to be done on both
    fronts. We will continue to press the Government for greater
    transparency, accountability, and justice with respect to both the
    murder investigation and the treatment of BCWS and its leaders.
        We also are working closely with the International Labor
    Organization (ILO) on a number of fronts in Bangladesh, having funded
    different ILO projects to promote labor rights by strengthening the
    capacity of workers' organizations to advance workplace health and
    safety and by ensuring that workers' voices are heard.
        Our coordination with the ILO includes close engagement with the
    ILO-International Finance Corporation Better Work Program, including
    through our participation on the Better Work advisory and donor
    committees. Several months ago, Better Work's management team set out
    several labor issues that it expected the Government of Bangladesh to
    address prior to any launch of a Better Work program in the ready-made
    garment sector. We have seen progress on one of those fronts, the
    registration of unions, which has increased significantly--with, as
    Assistant Secretary Blake noted in his testimony, 27 registrations
    since September compared with 3 in the previous 5 years.
        That is certainly welcome and encouraging, although important
    challenges remain to workers' ability to exercise their right to
    freedom of association and collective bargaining in practice, once a
    union is registered. At the same time, Better Work is still waiting on
    several changes to Bangladesh's Labor Code, which are part of the
    larger labor law package awaiting action by the Parliament.
        If those amendments are enacted and the Better Work leadership team
    then determines that the time has come to launch the program there, we
    at the Department of Labor will be closely engaged in that process
    moving forward. To be sure, Better Work will not be a panacea; even
    after 5 years, it will only cover a relatively small part of the huge
    garment sector. But it will be another important measure in advancing
    worker rights and workplace safety in that sector.
        We are also working with parties in Bangladesh and the ILO with
    respect to the commitments on fire and building safety made by the
    Government of Bangladesh and its industry and workers' organizations
    under the umbrella of the ILO-facilitated National Tripartite Plan of
    Action launched in March. We welcome the lead role being played by the
    ILO in that regard, as underscored by Deputy Director General for Field
    Operations and Partnerships Houngbo in early May following the Rana
    Plaza collapse, and in the ``road map'' he outlined at the end of that
    high-level mission.
        That ``roadmap'' recognizes the need for an action plan to
    implement several specific short- and medium-term measures. These
    include labor law reform, expedited action on fire and building safety
    under the National Action Plan, and, as Assistant Secretary Blake noted
    in his testimony, the recruitment of 200 new labor inspectors in 6
    months--with plans for a minimum of 800 new inspectors.
        We at the Department of Labor are prepared to play a direct role in
    helping advance the effort to make tangible progress in addressing the
    fire and building safety and other workers' rights-related concerns
    highlighted by the Tazreen and Rana Plaza tragedies.
        As promised by our Department leadership soon after Tazreen, we
    have crafted a detailed plan to provide funding to one or more grantees
    to help strengthen the capacity of both the Government of Bangladesh
    and workers' organizations within the country to improve fire and
    building safety in the ready-made garment sector. We have published the
    Notice of Intent with respect to this technical assistance project and
    shortly will be issuing the detailed solicitation document.
        We recognize that this funding will only be a small piece of the
    puzzle, but hope that, along with the support of other donors within
    the U.S. Government and from around the world, it will play an
    important role in helping to remedy the shortcomings that have impeded
    effective enforcement of laws and regulations and the protection of
    workers' rights in the garment sector--often with terrible
    consequences.
        Finally, a few words about the role that the private sector can and
    must play to leverage its market power to help advance positive change
    for workers in Bangladesh.
        Within Bangladesh, it is essential that the powerful garment
    industry, including the Bangladesh Garment Manufacturers and Exporters
    Association (BGMEA), step up and do more to ensure workplace safety and
    greater respect for the rights of the largely young, female garment
    sector workforce. In addition, buyers and retailers based in the United
    States and elsewhere need to play a more active role in addressing
    labor concerns in their supply chains from Bangladesh.
        Assistant Secretary Blake's testimony referenced what has come to
    be known as the Accord, the agreement reached between several workers'
    organizations and more than 30 brands--mainly from Europe but including
    PVH (the first to sign on), Abercrombie & Fitch, and as of last week
    Sean John from the United States. There is much to commend in that
    agreement, including commitments to ensure that fire and building
    safety improvements are made and greater respect for worker rights is
    achieved in the garment sector.
        As important as any particular element of that agreement, however,
    is its likely impact on the workers of Bangladesh: it creates a clear
    and enforceable roadmap for sustained buyer engagement, financial
    obligations, and commitments to sourcing from Bangladesh--something of
    critical importance, especially to those young workers who have come to
    depend on garment sector jobs as a steppingstone to a better life.
        Our goal in all of this is not to stifle Bangladesh's remarkable
    growth and development, but rather to work with the Government,
    industry, workers' and other civil society groups, and other
    stakeholders to ensure that job creation and economic growth occur hand
    in hand with increased respect for worker rights and improved workplace
    health and safety.
        Tazreen and Rana Plaza have helped highlight the shortcomings in
    labor law, policy, and enforcement that we have discussed with our
    counterparts during meetings in Dhaka and Washington, and they have
    demonstrated, in the most tragic way imaginable, how essential it is
    that we all urgently address labor rights and workplace safety issues
    in Bangladesh with an unprecedented degree of commitment and vigor.
        Thank you again for this opportunity to testify, and I would be
    pleased to take your questions.

        The Chairman. Thank you.
        Mr. Karesh.

    STATEMENT OF LEWIS KARESH, ASSISTANT U.S. TRADE REPRESENTATIVE
    FOR LABOR, OFFICE OF THE U.S. TRADE REPRESENTATIVE, WASHINGTON,
                                   DC

        Mr. Karesh. Good morning. Chairman Menendez, Ranking Member
    Corker and other members of the committee, thank you for the
    opportunity to testify at this hearing. I am very pleased to be
    here with my colleagues from the Departments of Labor and
    State.
        As the recent tragedies involving building and fire safety
    demonstrate, this is a critical time to work with Bangladesh to
    ensure that workers' rights and safety are protected. Today I
    will talk about our trade relationship with Bangladesh and in
    particular our ongoing review of worker rights under the
    Generalized System of Preferences, or GSP, Trade Preference
    Program.
        Bangladesh is an important trade partner of the United
    States, and we have a strong and growing trade relationship.
    We, the United States, are the largest single-country market
    for Bangladesh's chief export of apparel products. One of the
    ways we are seeking to strengthen that trade relationship is
    through a regular mechanism for dialogue and cooperation. In
    this regard, we have proposed to establish a U.S.-Bangladesh
    Trade and Investment Cooperation Framework Agreement and are
    awaiting Bangladesh's response to that request.
        Bangladesh currently receives special duty-free access to
    the United States market through GSP. The GSP program has
    several eligibility criteria, including worker rights. To
    maintain its GSP benefits, a country must be taking steps to
    afford internationally recognized worker rights. In 2007, the
    AFL-CIO submitted a petition to USTR under GSP alleging serious
    shortcomings in Bangladesh's recognition of worker rights. The
    AFL-CIO petition described a wide array of worker rights
    issues, including serious obstacles to freedom of association
    and collective bargaining, particularly in export processing
    zones, the ready-made garment industry, and the shrimp
    processing sector.
        The petition also alleged a pattern of harassment and
    violence against trade unionists and nongovernmental
    organizations that work on labor rights issues, and a neglect
    of worker protections in the areas of fire safety and health.
        We at USTR and other government agencies have taken and
    continue to take these allegations very seriously. From the
    moment we accepted the AFL-CIO petition, and indeed prior to
    the petition because many of the issues have been longstanding,
    USTR has worked with all stakeholders to address the many
    concerns. While we have seen progress in some areas over time,
    we are concerned that the situation in other areas has
    deteriorated, particularly in the past year.
        United States officials have been explicit with the
    Government of Bangladesh concerning specific actions it should
    take to provide greater freedom of association and to ensure
    that workers have safe factories in which to work. Despite our
    many efforts with Bangladesh, beginning in late 2012 we grew
    increasingly concerned that the worker rights situation was, in
    fact, deteriorating. We concluded that the situation warranted
    consideration of possible withdrawal, suspension, or limitation
    of Bangladesh's trade benefits under GSP.
        We issued a Federal Register notice in January of this year
    to make stakeholders aware of the seriousness of our concerns,
    and then held a hearing on the issue in March. The Tazreen fire
    in November 2012 and the Rana Plaza building collapse that
    others have spoken about this past April demonstrated the
    deadly implications of the failure to address the underlying
    issues of worker rights and safety, especially in the garment
    sector.
        Over the past several months, the administration has
    intensified its engagement with the Government of Bangladesh
    and relevant stakeholders. We have stressed the importance of
    seizing this moment to make concrete and lasting change. The
    GSP review has given us a much better understanding of the
    range of labor issues workers face in Bangladesh and provides a
    specific mechanism to engage the government. The administration
    will announce a decision on next steps in the GSP review of
    Bangladesh by the end of June. All options remain under
    consideration, including possible suspension, limitation, or
    withdrawal of GSP benefits.
        The challenges Bangladesh faces require both short-term and
    long-term actions. Overcoming these challenges will take the
    efforts of all parties--the Government of Bangladesh, factory
    owners, workers, nongovernmental organizations, international
    buyers, and, of course, the United States and other
    governments--that have an interest in the growth and
    development of Bangladesh. We recognize that now is the time,
    and we need to see meaningful and sustained change on these
    matters in Bangladesh.
        Thank you again, Chairman and this committee, for the
    opportunity to testify, and I look forward to your questions.
        [The prepared statement of Mr. Karesh follows:]

                       Prepared Statement of Lewis Karesh

        Good morning. Chairman Menendez, Ranking Member Corker, and members
    of the committee, thank you for the opportunity to testify at this
    hearing concerning labor issues in Bangladesh. As the recent tragedies
    involving building and fire safety demonstrate, this is a critical time
    for our Government, U.S. companies, and American consumers to
    understand the challenges presented, and work with Bangladesh to ensure
    that workers' rights and safety are protected. Today, I would like to
    touch on our overall trade relationship with Bangladesh, but discuss in
    much greater detail our ongoing review of worker rights in Bangladesh,
    under one of our trade preference programs, the Generalized System of
    Preferences (GSP).
        The United States and Bangladesh have a strong and growing trade
    relationship. The United States is a key market for Bangladesh,
    importing nearly $5 billion in goods from Bangladesh in 2012. We are
    also the largest single-country market for Bangladesh's chief export,
    apparel products. The United States engages with Bangladesh on trade
    and investment-related matters in bilateral and multilateral settings,
    including at the World Trade Organization (WTO). In an effort to
    bolster our engagement in these areas, the U.S. Government has proposed
    a Trade and Investment Cooperation Framework Agreement (TICFA), which
    would provide a regular mechanism for dialogue and cooperation. We
    would like to complete the agreement with Bangladesh soon and are
    awaiting a response to our proposal.
        As a least-developed beneficiary developing country under the U.S.
    GSP trade preference program, Bangladesh is eligible to export duty-
    free nearly 5,000 otherwise-dutiable products to the United States. In
    2012, the United States imported nearly $35 million in products from
    Bangladesh under GSP, across almost 150 different Harmonized Tariff
    Schedule (HTS) categories. Leading GSP-covered imports from Bangladesh
    include tobacco, ceramics, plastic products, sporting equipment, and
    nonapparel textiles such as national flags and rugs. However, because
    most apparel products are excluded from the GSP program by statute, GSP
    imports represented less than 1 percent of total U.S. imports from
    Bangladesh last year.
        The statute governing the GSP program lists several eligibility
    criteria, including some related to worker rights,\1\ which
    beneficiaries must meet in order to maintain their benefits. USTR,
    based on the advice of the GSP Subcommittee of the interagency Trade
    Policy Staff Committee, accepted for review a GSP country practice
    petition filed by the AFL-CIO in 2007 alleging serious shortcomings in
    the Government of Bangladesh's recognition of worker rights. The AFL-
    CIO petition described a wide array of worker rights issues in
    Bangladesh, including serious obstacles to freedom of association and
    collective bargaining, especially in Export Processing Zones (EPZs),
    the ready-made garment and the shrimp processing sectors. The petition
    and subsequent updates also allege a pattern of harassment and violence
    against trade unionists and nongovernmental organizations (NGOs)
    working on labor rights issues, and a neglect of worker protections in
    the areas of fire safety and health.
        We have taken, and continue to take, these allegations seriously.
    From the moment we accepted the AFL-CIO petition--and indeed prior to
    accepting the petition because many of the issues have been
    longstanding--USTR has worked to address these issues. We worked with
    the petitioners, other U.S. Government agencies, the Government of
    Bangladesh, and stakeholders in Bangladesh to achieve progress and
    resolve the concerns that the petition raised. While we have seen
    progress in some areas over time, the situation in other areas has
    deteriorated, particularly in the past year. U.S. officials have been
    explicit with the GOB concerning the specific actions they should take
    to allow greater freedom of association, including to enable workers to
    form and operate unions of their choosing and for labor NGO's to assist
    them, and to ensure workers have safe factories in which to work.
    Parallel to these efforts, as is also our practice, the GSP
    Subcommittee continued to invite public comments on the petition on
    several occasions and has held four public hearings on the case, most
    recently on March 28, 2013.
        Despite our many efforts with Bangladesh, beginning in late 2012
    the USTR-led GSP Subcommittee grew increasingly concerned that the
    worker rights situation in Bangladesh was in fact deteriorating and
    concluded that the situation warranted consideration of possible
    withdrawal, suspension, or limitation of Bangladesh's trade benefits
    under GSP. Consequently, on January 8, 2013, USTR published a notice in
    the Federal Register seeking comments on the possible withdrawal,
    suspension or limitation of Bangladesh's GSP benefits. The primary
    purpose of the notice was to make stakeholders aware of the seriousness
    of our concerns and the need for action by the government of
    Bangladesh.\2\ At the same time, we communicated our concerns to senior
    officials of the Government of Bangladesh that we would be making a
    decision on next steps in the GSP review by mid-2013, that the
    country's GSP trade benefits were at stake, and that we would be
    looking for evidence of substantive progress by the government in
    improving the worker rights situation.
        As noted, on March 28, 2013, the GSP Subcommittee held a public
    hearing on the Bangladesh review at which Bangladeshi officials,
    representatives of the Bangladesh Garment Manufacturers and Exporters
    Association (BGMEA), the Bangladesh Export Processing Zone Authority
    (BEPZA), and the AFL-CIO testified. The Bangladesh officials and the
    BGMEA cited a number of measures they had taken or committed to
    undertake to address the worker rights and worker safety concerns that
    the U.S. Government had raised.
        The AFL-CIO testified that while the Government of Bangladesh and
    the Bangladesh garment industry had begun to address fire safety
    issues, little had been done to address the core worker rights issues
    cited in the original petition and subsequent updates.
        The Rana Plaza building collapse in April demonstrated the deadly
    implications of the failure to address the underlying issues of worker
    safety and worker rights, especially in the garment sector.
        In response to widespread criticism following the Rana Plaza
    collapse, the Government of Bangladesh has announced several
    initiatives, mostly related to building and fire safety. At the same
    time, many U.S. and European apparel brands have committed to
    additional initiatives designed to improve compliance with fire and
    safety standards among their Bangladeshi suppliers. In addition, the
    European Union (EU) announced that it is considering a review of
    Bangladesh's benefits under its own trade preference program.
        The administration has also intensified its engagement with the
    Government of Bangladesh and other stakeholders. In particular, the
    three agencies represented at this hearing--USTR, State, and Labor--
    have each been using the particular venues and contacts we have with
    the government to stress the importance of seizing this moment to make
    concrete and lasting change. The GSP review has given us a much better
    understanding of the range of labor issues workers face in Bangladesh
    as well as a specific mechanism to engage their government. The
    administration will announce a decision on the petition by the end of
    June; and all options remain under consideration, including possible
    suspension, limitation, or withdrawal of Bangladesh's GSP benefits.
        Based on our experience from the GSP review, let me provide you
    with a few observations on the challenges related to ensuring worker
    rights and safety in Bangladesh.
        First, the issues are broad, but interrelated. One of the most
    tragic aspects of the Rana Plaza disaster was that workers were
    allegedly coerced into returning to work in a building with known
    structural risks. Had these workers been able to effectively organize
    themselves, it is possible that they would have felt less intimidated.
    An important tool to ensure worker safety is the voice of the workers
    themselves, which comes from their ability to freely associate.
        Second, the challenges facing Bangladesh require both short- and
    long-term action. The government can take several steps now to
    strengthen freedom of association, including ensuring that labor
    activists are able to operate freely and to support the development of
    independent unions that effectively represent their workers. At the
    same time, the government needs to devote resources to developing its
    own capacity to regulate and enforce labor laws and building and fire
    safety codes. This is a longer term endeavor that will require
    sustained focus.
        Third, all stakeholders involved in Bangladesh have a
    responsibility to work together to address labor issues effectively and
    sustainably. The government has a primary responsibility to ensure
    enforcement of its laws and to create an environment in which workers
    can exercise their rights and work in safe and healthy factories. But
    factory owners, workers, international buyers, and consumers each have
    a responsibility and role to play as well. There are a large number of
    initiatives underway to address these challenges; we welcome these as a
    strong sign both of stakeholders' recognition that change is necessary,
    as well as their willingness to be a positive part of that change. It
    will be critical that these initiatives work in tandem and not at cross
    purposes.
        Finally, the United States, through our trade relationship and
    trade programs, and through our diplomatic and development policies,
    has an important interest in seeing Bangladesh succeed in addressing
    the labor challenges it faces and continuing to grow and prosper
    economically. The administration is committed to working with the
    Government of Bangladesh and other stakeholders to achieve these goals.
        Thank you again for this opportunity to testify, and I would be
    pleased to take your questions.

    ------------------
    End Notes

        \1\ Section 502(b)(2)(G) of the Trade Act of 1974, as amended,
    (``the Trade Act'') provides that the President ``shall not designate
    any country a beneficiary developing country'' under GSP if ``such
    country has not taken or is not taking steps to afford internationally
    recognized worker rights in the country (including any designated zone
    in that country).'' Section 507(4) of the Trade Act provides a
    definition of ``internationally recognized worker rights,'' which
    includes ``the right of association,'' ``the right to organize and
    bargain collectively,'' and ``acceptable conditions of work with
    respect to minimum wages, hours of work, and occupational safety and
    health.''
        \2\ The Government of Bangladesh (opposing any change to its GSP
    benefits) and the AFL-CIO (supporting suspension) were among the 30
    individuals and organizations that submitted comments.

        The Chairman. Well, thank you all for your testimony. Let
    me, however, characterize what I heard, which is that we have
    been sabre rattling, but that has not produced the results that
    we collectively want to see.
        Mr. Karesh, you said that we have been very explicit about
    what we think needs to be done. Obviously, on freedom of
    association, it is pretty clear that if the workers at Rana
    Plaza had had the right to associate, they very well might not
    have been forced to work in an unsafe building, and they would
    not have died.
        So in my mind, the question is, When do we go from saber
    rattling to some action? Because while we have seen some
    movement in laws that have been proposed and/or passed, we have
    seen very little, if any, enforcement at the end of the day.
        So the question is, How many more people have to die before
    we decide that, in fact, that is not something that we can
    morally sustain?
        Do not all jump to answer the question. [Laughter.]
        Mr. Blake. Let me start, Mr. Chairman. First of all, let me
    agree with what you just said, and that is the message that we
    have been sending all along to our friends in Bangladesh and to
    all the other stakeholders, is that this is a defining moment
    now for action.
        I think there has been some action, as I said in my
    testimony, in terms of 27 new unions registered, in terms of
    the new fire safety plan, in terms of quite substantial
    progress on these labor law amendments which we have been
    assured by the Government of Bangladesh will be passed by the
    end of this month. So that will be a very important step, I
    think.
        But we are also working, as I said, with all buyers and
    with BGMEA--the Bangladesh Garment Manufacturers and Exporters
    Association--because they too have a very important role to
    play in terms of hiring new inspectors both on the fire safety
    side and on the structural soundness side. And then we need to
    bring all of these efforts together in a coherent fashion so
    that there is a plan that everybody agrees on, that all the
    stakeholders can agree upon.
        The Chairman. Well, I appreciate that. But, Mr. Secretary,
    as we know here in our own country, passing laws and putting
    them on the books versus enforcing them is a huge gulf.
        Mr. Blake. Right.
        The Chairman. And to be honest with you, every law that we
    pass that gets signed into law but that does not get enforced
    is meaningless. It is a toothless tiger. So my concern is not
    that we continue to see a plethora of laws passed, which I
    applaud, of course. But what is it that we are seeking in
    enforcement activities to make sure that the laws are pursued
    and the message is sent to the industry?
        So, Mr. Karesh, why not, considering I recognize we have a
    very significant bilateral agenda with Bangladesh. As I said, I
    have applauded many of their successes. But that does not mean
    that we should sit by and watch workers die, and to permit
    American companies to, in essence, exploit conditions under
    which labor is cheap but safety is none. So, why not, when
    basically you have a very limited opportunity in terms of maybe
    the impact on Bangladesh but an opportunity to send a very
    clear message, why not suspend the GSP benefits here as a
    global message? Because it is not about having manufacturers
    leave Bangladesh to the next lowest priced place. That does not
    accomplish the goal.
        The question is, How do we send a message and work to
    create a universal standard that at the end of the day can
    allow Bangladesh to continue to thrive, but to make sure that
    it is not done on the death of individuals who work for these
    industries?
        Mr. Karesh. Thank you, Chairman. I think you have hit on
    really the key question that we are facing ourselves right now.
    GSP offers one mechanism to engage countries, and we are
    currently reviewing that, as I expressed, because we have
    concerns about whether there has been continuing progress. As I
    said and as Assistant Secretary Blake mentioned, there have
    been some actions that have occurred in Bangladesh, and we have
    worked with the government over a sustained period of time to
    try to make sure that those are meaningful steps and that they
    are sustained. We have recently become more concerned that
    there has not been sustained improvement in addressing these
    issues.
        What we search for is what is the best way to achieve the
    result that I think we all want to achieve, which is safer
    workplaces where workers can exercise their rights and where
    they can go to work and come home from work safe and healthy.
    We are searching for the best ways to engage with the
    Bangladeshi Government and other stakeholders to do that.
        We are taking a serious look at GSP because it is one way--
    --
        The Chairman. What they send under GSP is less than 1
    percent of GDP for them, right?
        Mr. Karesh. Less than 1 percent of their exports to the
    United States come in under GSP. That is correct, sir.
        The Chairman. So, while not an insignificant action, the
    damage is relatively small. The message, however, universally
    is very strong. I am going to ask Senator Kaine in a little
    while to chair the hearing as I step out to go to the Finance
    Committee, where the new U.S. Trade Ambassador's nomination is,
    and I am going to ask him the same questions, and I am hoping
    that he gives me the right answers.
        Mr. Biel, let me ask you, why is it that only a handful of
    American retailers are signed on, but the Europeans have
    largely signed on to the IndustriALL Accord? I wonder--you
    know, some businesses are debating whether to leave Bangladesh.
    That is not our purpose here, to relocate elsewhere. Otherwise,
    we are just chasing this process. But only Disney so far has
    stated that it will no longer source from Bangladesh. Forty-one
    companies have signed on to the IndustriALL Accord on fire
    safety and building improvements, which is hailed by labor and
    consumer groups as a major breakthrough, since global brands
    have often sought to deflect any direct responsibility of the
    problems. But there are only three American retailers who have
    signed the Accord so far.
        So what confidence can you give me, or any of you who may
    be dealing with the industry, that there are serious efforts
    underway by American retailers to help improve labor
    conditions?
        Mr. Biel. Thank you for the question, Mr. Chairman, and my
    colleagues may want to jump in as well. Obviously, the industry
    which is represented on the second panel will have to explain
    for themselves their decision collectively to pursue a
    different route than the Accord. As you mentioned, only three
    U.S.-based companies--PVH, which was the very first to sign on
    some time ago, and more recently two additional ones, as you
    mentioned, have signed on, but that is a small number compared
    to the number from Europe. They have outlined, including in the
    written testimony, their legal and policy reasons; and, of
    course, the AFL-CIO has outlined a very different account of
    it. We have talked to all parties concerned.
        The Chairman. Are the Europeans less astute about legal
    liability?
        Mr. Biel. Not that we are aware of, nor are the three
    American companies that did sign on. At one time, we thought
    just a few weeks ago there was a very narrow divide, and the
    hope was that the momentum would bring additional U.S. parties
    on board. That obviously has not happened.
        What we are hoping to do, as my written testimony reflects,
    is indicate that we see a process forward, and I speak for the
    Department of Labor in this regard, as needing to be a bit of a
    game changer: not just for the Government of Bangladesh in
    terms of your previous question about the need for greater
    enforcement mechanisms, greater capacity, the small number of
    labor inspectors, the fact that there is so little oversight
    and capacity to do the kind of work not just on fire and
    building safety but on broader workers' rights concerns, but in
    addition there needs to be a real partnership with the private
    sector that, frankly, has been less than robust to date.
        So our goal--we are not as a government endorsing one
    particular plan--but our goal is to set some benchmarks for
    what needs to be done, especially given that there is a growing
    recognition, interestingly enough, as both sets of testimony on
    the second panel recognize, of a corporate responsibility, but
    there seems to be a difference in what the details of that
    involve.
        So we have continued to press the case for the fact that
    government responsibility is paramount. That is why there needs
    to be more oversight, more funding, more training, and other
    initiatives that we can talk more about, but there also needs
    to be a stepped-up private sector role.
        The last thing I will say is the Accord itself is still
    being implemented. There is a 45-day period that began in late
    May for putting additional details in place. And so our hope is
    that as some of those details become clear, maybe some of the
    concerns will be alleviated and there will be more momentum for
    additional brands to sign on. But again, that will have to be
    their own determination.
        The Chairman. Well, for the purposes of this governmental
    panel, let me just tell you I can assure you that this is not
    going to go away gently into that good night with one hearing.
        Senator Corker.
        Senator Corker. Thank you, Mr. Chairman, and again, all of
    you for being here.
        Let us talk a little bit about the Government of
    Bangladesh. I think all of us have heard the story of the
    person who showed up, the inspector, the day before at the
    particular facility we are talking about, and determined that
    it was unsafe. He was turned away, and the building later
    collapsed, and 1,100 people died. I know we are talking here
    about regulations and rules. I am just curious about what kind
    of regulations and rules already exist. It sounds to me like
    maybe it is more a question of whether those are being enforced
    in Bangladesh. I am just wondering if one of you might respond
    to that.
        Mr. Biel. I think it is a combination of the laws on the
    books and the lack of enforcement. There are some shortcomings
    in the laws themselves. As was referenced in more detail in the
    written testimony, Bangladesh is currently, we understand that
    the Cabinet, the senior leadership, is now moving a
    comprehensive labor law reform package to the Parliament, and
    as Assistant Secretary Blake mentioned, the hope is that it
    will be passed by the end of this month. That is about 145
    pages translated, so it is a detailed plan. Those of us who
    have had a chance to examine it recognize it is just the first
    step. There are some things in it that still do not go as far
    as making it compliant with internationally recognized
    standards of the ILO and so forth.
        But there are some significant improvements, including the
    four specific provisions that tie into what the Better Work
    management team asked for last fall. So on the legal side there
    are some signs of progress, although I would also note--and
    again, this is referenced in the testimony--that the export
    processing zones are subject to an entirely separate set of
    provisions, not part of that same labor code, and that is why
    that has been a particular area of concern, because there is
    vast discretion in that area, and you do not have the same kind
    of union structure in that area.
        So there are some legal gaps, some that are on the way to
    being remedied, others that remain a ways away. But in
    addition, there is the issue of enforcement. Currently, given
    the size of the sector, the fact that you have got only a
    double-digit number of labor inspectors is something that is an
    obvious shortcoming. In connection with the ILO roadmap
    announced at the beginning of May, that number will grow to
    200, and there should be budget to get it up to 800 before too
    long. That is still not a vast number, but it is almost a
    tenfold increase.
        So you begin to see, with the help that we can provide,
    technical assistance training, hopefully a more robust
    government enforcement capability, although again that needs to
    be complemented by more work by the private sector at the
    factory level.
        Mr. Blake. May I just jump in for a minute, Senator, and
    just say I think the Rana Plaza tragedy really underlined the
    number of failings that now exist. One, there was a management
    failure on the part of the management of that factory which, of
    course, ordered those workers back in when they knew full well
    that there were cracks in the building.
        Second, it underlined the need for independent unions. Had
    there been an independent union representative at that facility
    at that time, they would have ordered the evacuation of those
    workers.
        Third, I think it underlined the immense governance
    challenges that still exist in Bangladesh. This building was
    built on unstable land. There were floors that were added
    illegally. So there is a great deal of corruption and
    governance challenges that still need to be met.
        And fourth, as my colleague said, it underlines the need
    for much greater and more capable inspections, not just by
    government inspectors but by independent inspectors who can
    hopefully reinforce whatever the work that is being done by the
    government.
        Senator Corker. Well, I appreciate that. It seems to me
    that there ought to be some mechanism, maybe, for these owners
    of the companies that are manufacturing to somehow certify that
    they are meeting the standards also, the standards that have
    been put in place. But it does sound like there is a huge
    inside-the-country issue and that is going to take Bangladesh
    really stepping up to make sure that the employees there are
    well taken care of.
        On the Accord, I guess I have never been and--I did not
    come to the Senate to be someone who does what everybody else
    does. I guess it really does not trouble me that our companies
    did not sign an agreement that the Europeans did. I do not
    think that is necessarily a standard that matters that much.
        I think what does matter is that our companies enter into
    an agreement that is sensible and really moves things. I am
    glad to hear the chairman say that he is going to have
    additional hearings. I think one of the things we might want to
    do is have a hearing after the U.S. retailers decide what this
    agreement is going to be, and then maybe we go through that and
    understand the kind of statements that they have made and plan
    to enforce.
        But I just wonder, Mr. Biel, if you could tell us a little
    bit about what those characteristics of that agreement may be,
    to your knowledge, as far as what the U.S. companies are
    planning to do. Again, it is my understanding that they have
    committed to some June 30 deadline. I think all of us would
    look with anticipation to what they might do. Maybe you could
    give us a little preview.
        Mr. Biel. My review will be fairly sketchy, I am afraid, in
    that it has only been about a week since we first heard of the
    unification of a number of U.S. brands and trade associations
    around what is now being coordinated by the Bipartisan Policy
    Center and former Senators Mitchell and Snowe. So that just
    goes back a
    few days. We have not seen an action plan or any specifics
    about that. Hopefully on your second panel, the panelists--
    certainly Mr. Lubbe, on behalf of the retail industry--can
    share more details on where that stands. But it is fairly new
    and very much a work in progress that we just have not seen the
    specifics of.
        The Accord has been in place for a couple of years. There
    were only two companies that were participants in it until
    recently, when the momentum in recent weeks, including post-
    Rana Plaza, led some three dozen additional ones to come on
    board. And it, too, is still being developed in the sense of
    going from a six-page document to a much more detailed plan in
    this 45-day period.
        So I think your point is well taken. In the next few weeks
    there will be an opportunity perhaps to compare and contrast
    two different models as you learn more about how the Accord is
    being implemented and perhaps learn what this initiative that
    is brand new involves.
        In my written testimony--I do not want to dominate the
    time--I lay out a few points that are kind of bottom lines from
    our point of view, speaking for the Department of Labor, for
    what a strong multistakeholder agreement includes, and we are
    encouraged with the Accord that you have got different parties
    at the table, industry as well as workers' organizations
    representatives, and some clear provisions that meet those
    criteria.
        Senator Corker. I think there have been a number of points
    that have been brought up. But at the end of the day, what we
    do not want to see happen is for us to do the typical cut-your-
    nose-off-to-spite-your-face effort where, in essence, an
    industry moves from a country, like Bangladesh, that needs
    jobs. We do not want to see that happen. What we would like to
    see is the people who were working there to be able to work in
    safe conditions and have jobs that are moving them up mobility-
    wise into a better standard of living. I think that is what we
    would all like to accomplish.
        So it sounds to me like there are tremendous enforcement
    issues on the ground that the government is not carrying out.
    Either they have been influenced to not act or they are simply
    not acting, but certainly there is a responsibility there
    amongst the Government of Bangladesh to make sure they take
    care of their own citizens.
        And then it seems like to me, since the chairman has
    mentioned this is not going to go away, one of the great things
    we might do as a committee is to have some of the industry
    leaders come up after this United States and Canadians
    retailers agreement has been reached and just share with us. I
    think most of them certainly like to have good corporate images
    and want people who buy goods from their stores to feel good
    about what they are doing. Maybe we can have them come up and
    share with us what they are planning to do to implement
    standards within their own companies that create a better
    culture in this regard as to how they are purchasing.
        So, Mr. Chairman, I thank you for this and appreciate all
    of you being here.
        The Chairman. Thank you, Senator Corker. We have exactly
    that in mind, so we look forward to it.
        Senator Casey.
        Senator Casey. Thank you, Mr. Chairman. I will be very
    brief. I will not take all of the 7 minutes because I have to
    run, and I know everyone is pressed for time.
        Thanks for your testimony, and we are grateful for your
    work.
        Assistant Secretary Blake, I wanted to ask just one
    question, and I will submit a number of other questions for the
    record. It is one of capacity. If you can assess--and I know
    you have spoken to this in one way or another in your testimony
    and otherwise--the capacity of the Government of Bangladesh to
    provide enforcement of existing rules, but then also the
    capacity in terms of reform and making the improvements we
    think are vitally necessary. Just in terms of capacity, if you
    could just address that.
        Mr. Blake. Thank you, Senator. I think when you talk about
    capacity, you are talking about both are there sufficient
    numbers of inspectors, but then also even more critically is
    there the will to actually enforce these things.
        Senator Casey. Both efforts.
        Mr. Blake. Right. And I think we are making significant
    efforts, and the government is making significant efforts to
    hire the necessary number of inspectors, and we are also
    encouraging again a parallel industrial effort on the part of
    the buyers and BGMEA so that they will have their own cadre of
    independent inspectors as well, because we think that is very,
    very important.
        But then there is the question of governance, and that is
    something that Bangladesh really needs to take ownership on.
    Again, I think that is where there is the most, in many ways
    the most significant challenges, is to ensure that the sort of
    culture of corruption that has persisted for so long is finally
    brought to an end and that there are serious efforts at
    remediation and serious efforts to ensure that all of these
    inspections not only take place but that then, whatever
    decisions are made, are actually enforced.
        BGMEA does have the ability to enforce this in the sense
    that they control the import and export licenses for all of
    these suppliers. So they have the teeth to be able to enforce
    this, and I think they have the will for this reason, because
    they know very well that brand Bangladesh is under threat now.
        Senator Casey. Thank you very much.
        Thank you, Mr. Chairman.
        The Chairman. Thank you.
        Senator Murphy.
        Senator Murphy. Thank you very much, Mr. Chairman, and
    thank you for this hearing and for your great work and interest
    on this issue.
        I wanted to come back to the industry Accord and our path
    forward. I am glad to hear that there may be a revisiting of
    some American companies of their willingness to step up and
    make some commitments, but thus far their response has been
    inadequate. They have, with the defense of potential legal
    liability, essentially said that they are better off today
    coming up with individual policies that may make things better
    rather than coming together, and some of the individual
    policies seem to make some sense. Gap, for instance, has a
    fairly comprehensive response here that, if you read it,
    certainly suggests they are taking things seriously. But, of
    course, this has been how we have been doing things for years.
    Each company has worked individually on trying to make things
    better and, of course, with the recent events, there is little
    evidence to suggest that it has worked.
        And so, Mr. Blake, you were sort of careful in your
    testimony. It did not sound like you suggested that we were
    actively encouraging companies to come together on a joint
    standard. So I wanted to ask all three panelists, and let me
    start with you, as to what role we are going to be playing to
    try to facilitate American companies, whether it be in an
    agreement with European countries or on their own, to have some
    common commitment rather than just doing what we have been
    doing for a long time, which is asking each one of them to come
    up with their own standards.
        Mr. Blake. Thank you, Senator. Let me start, and I will ask
    my colleagues to jump in.
        As I said in my testimony, we have had several rounds of
    conference calls with all of the buyers already hosted by the
    State Department with our other interagency colleagues, and we
    have encouraged them to come up with an agreement that they can
    all coalesce around, and hopefully one that also is consistent
    with the IndustriALL Accord. As my colleagues said, there are
    some concerns on the part of the American companies about
    liability questions, and obviously that is a judgment they are
    going to have to make.
        But many other parts of the IndustriALL Accord they seem to
    be willing to embrace. So to the extent possible, we would like
    to see something that is reasonably coherent so there is not a
    jumble of different standards and requirements that will make
    it more complicated to really achieve the outcome that we all
    desire.
        Mr. Biel. Assistant Secretary Blake has covered it well. I
    guess what I would add, building on my previous response, is
    that there are moments in time, and the chairman highlighted
    the one in our own country from 1911 with Triangle Shirtwaist,
    which led to a whole set of changes in terms of enforceable
    laws, a lot of the things that the Department of Labor
    administers today coming out of that, a moment in time in the
    mid-1990s after Kathy Lee Gifford and other things where some
    of the voluntary mechanisms, the principles, the
    multistakeholder agreements came into being, and this is
    another moment in time. And it is true, it cannot just apply to
    Bangladesh, but Bangladesh may be a stepping stone.
        We deal at the Department and through the Better Work
    Program with conditions in other countries around the world,
    from Haiti to Honduras to Lesotho and so forth, but Bangladesh
    is the second-largest export market to us. It is a massive
    industry, and so we really need to get it right, not just with
    respect to government enforcement but how brands and retailers
    see their own responsibilities.
        The last thing is that the state of international law and
    policy has evolved. There is a new recognition based on the
    U.N. Guiding Principles on Business and Human Rights that while
    government has paramount responsibility, corporations have a
    delineated set of responsibilities. So we have stressed against
    the backdrop of that, as well as the specific circumstances in
    Bangladesh, the need to meet some minimum criteria.
        So far, as we said, the momentum that looked like it was
    building in May has kind of taken a bit of a detour. But our
    hope is, through the processes we have mentioned, that there
    will be a coalescing around strong common principles in the
    coming weeks, and again some oversight in the future can
    certainly play a key role in holding people's feet to that.
        Senator Murphy. Mr. Karesh.
        Mr. Karesh. Thank you, Senator Murphy. I support the
    comments made by both State and Labor on this. We have always
    worked together to support corporate social responsibility and
    efforts on the part of the buyers and the manufacturers to
    address these issues. But it is our view that that is not going
    to be enough in and of itself, that there has to be a culture
    change within Bangladesh, within the government.
        And because of Rana Plaza and Tazreen, we have talked a lot
    about fire and building safety issues, but there are also other
    issues principally focused on freedom of association and
    collective bargaining and the right of workers to assert
    themselves and the protections that are in place for that. That
    is partly legal, and they are working on labor reforms in
    Bangladesh. But it is also partly attitude. It is intimidation
    and harassment of groups that try to support the labor unions,
    support the workers.
        So we have to work on that issue, and the government has to
    be involved and has to address those issues, and it has to have
    the political will to address them as well as working with the
    buyers and manufacturers and others.
        Senator Murphy. Mr. Blake, I would just direct my last
    question you, and possibly others can comment. This is on the
    issue of liability. It seems to me to be a bit of a red
    herring. We have the Koibel case and others which have greatly
    limited the ability of people in other countries to submit
    claims in the United States. Are we advising these companies on
    their potential U.S. liability, or are we leaving it up to
    their individual judgment?
        Mr. Blake. No, sir. We have not taken a position on that
    very narrow issue. We just, again, have taken a wider view that
    they should come together and coalesce around whatever plan
    they can agree on, and that ideally that could be something
    that is consistent with the IndustriALL Accord.
        Senator Murphy. Thank you.
        Thank you, Mr. Chairman.
        The Chairman. Senator Kaine.
        Senator Kaine. Thank you, Mr. Chairman.
        To the witnesses, Bangladesh is a sovereign nation, and
    they have their own sets of rules. There could be a culture of
    corruption. There could be labor challenges. There could be
    safety standards that we would not accept. We do not have the
    command and control of them that we would in this country, but
    we do have levers, and I want to just spend time talking about
    the levers.
        It strikes me that you could look at levers as our own
    governmental levers, the GSP, and there may be other
    mechanisms. You have private sector levers, and then some
    multinational organization levers, the ILO and the World Bank,
    for example.
        So on the levers that the United States would have, share
    with me a little bit about the General System of Preferences.
    It is my understanding that the AFL-CIO had filed a complaint
    seeking to diminish or reduce the GSP status of Bangladesh in
    2007. Has that been under consideration for 6 years?
        Mr. Karesh. Yes, Senator Kaine. They filed that in 2007,
    and we did accept it for review, and we have been reviewing it
    and engaging with the Government of Bangladesh ever since. As I
    indicated earlier, as well, even prior to the petition, because
    there had been longstanding issues related to freedom of
    association, there had been previous submissions, and we had
    seen progress at times. In fact, previously we closed some GSP
    petitions prior to this petition being opened because we saw
    progress.
        We continued to work with the government ever since this
    petition was received to address issues. We did see some action
    taken. But recently our feeling has been that we are not seeing
    sustained and meaningful progress on issues and we have
    concerns that, in fact, in some areas there seems to be a
    deterioration. The current situation that happened in Rana
    Plaza and Tazreen I think are evidence of the difficulties in
    the deterioration, and the question about whether there is the
    political will and the proper means are in place to ensure that
    Bangladesh can meet its challenges.
        Senator Kaine. Let me just ask about the structure of the
    GSP program. I gather that it was something established as part
    of the Trade Act in 1974. The Congress set the parameters of a
    program. The granting of GSP treatment is something that is
    handled administratively through the USTR. Do I understand it
    correctly?
        Mr. Karesh. That is correct. The U.S. Trade Representative
    Office is the primary office responsible for the trade
    programs. A decision with regard to GSP itself, eligibility for
    countries and whether there can be a suspension or limitation,
    is actually a Presidential determination based on a
    recommendation from USTR, and we have currently indicated that
    we will make a decision with regard to steps on GSP for
    Bangladesh by the end of June, and we are in interagency
    discussions on forwarding our recommendation to the President.
        Senator Kaine. So the recommendation will be done by the
    end of June to the White House.
        Mr. Karesh. That is correct, sir.
        Senator Kaine. I noticed there was one reference to an
    earlier
    instance where GSP status was suspended to Burma over workers'
    rights issues. How about just generally in terms of the
    program? Is suspension of GSP status something that has
    commonly been done in the last 40 years, or is it extremely
    rare?
        Mr. Karesh. It is not common. It has happened in a few
    instances. Burma is one of those instances.
        Senator Kaine. And Burma was over workers' rights issues?
        Mr. Karesh. That is correct.
        Senator Kaine. And when was that suspension, just
    generally?
        Mr. Karesh. 1989. We currently are reviewing whether to----
        Senator Kaine. To restore?
        Mr. Karesh [continuing]. To restore, yes.
        Senator Kaine. And are there other instances of GSP
    suspension, other than the Burmese example?
        Mr. Karesh. Yes, there has been. There have been several
    cases. I know of situations with Nicaragua, Paraguay, Romania,
    Chile, Burma, the Central African Republic, Liberia, Sudan,
    Syria, Mauritania, the Maldives, Pakistan, and Belarus.
        Senator Kaine. OK. So a number?
        Mr. Karesh. Yes.
        Senator Kaine. The chairman brought up in his questions the
    fact that the GSP only covers a portion of our trade with
    Bangladesh because there are a number of exclusions. In your
    judgment--and this is now a question to all three of you--what
    would the consequences of a GSP suspension be, recognizing you
    have not made that recommendation? But is it a minor thing
    because it only covers a certain amount of trade? Or is it a
    major thing because it sends a signal about the working
    conditions in Bangladesh that would affect them, either sort of
    diplomatically or affect the willingness of private-sector
    partners to invest?
        Mr. Karesh. I know Assistant Secretary Blake would like to
    respond to that as well, but let me just say briefly that there
    are a limited number of products that can come in under GSP
    that would be affected. But we believe that if that decision
    were made, it is a serious decision. It is a Presidential-level
    decision for the United States, and we believe Bangladesh
    understands that it would send a significant message with
    regard to doing business in Bangladesh.
        Mr. Blake. Yes, sir. I think it would send a very
    significant signal because it is symbolically important, and it
    would also potentially have an impact on the EU's decision,
    because the EU has its own GSP program which covers a much
    wider range of products than our own. Their whole process is a
    much longer term one than ours, but nonetheless this could have
    an influence on that as well. So I think it does have quite an
    important impact.
        Senator Kaine. And based on the format of the program as
    you described it, I gather it is sort of an iterative process.
    It is not just you are in or you are out. But the USTR, the
    United States, in dialogue with the Bangladeshi Government,
    could lay down some conditions and say if you do not do X by a
    certain date, our intent would be to recommend to the White
    House--or the President could even say our intent would be to
    withdraw GSP status. Do I understand the program correctly?
        Mr. Karesh. Yes, sir. That is correct. You have a choice of
    withdrawing, suspending, or limiting. There has been one
    situation where we did not fully take all of the benefits away
    but partially took them away, and then our intention, if that
    were to happen, would be exactly that, to have an action plan
    so that if Bangladesh took those steps, it could regain
    eligibility.
        Senator Kaine. In the instances where we have withdrawn GSP
    benefits, and you gave a number, have there been instances
    where when that has happened, the countries have wanted to come
    back and work to regain them? So I know you are analyzing with
    respect to Burma right now, but has it proven to get their
    attention so that they want to come back and regain GSP status?
        Mr. Karesh. Yes, absolutely.
        Senator Kaine. OK. I will save my private-sector questions
    for the next panel, but just one on the international
    organizations. The World Bank has a Work Better Program that is
    trying to focus on these issues as well. Could you describe the
    status of that?
        Mr. Biel. Sure, sure. It is actually jointly administered
    by the International Labor Organization and the International
    Finance Corporation, part of the World Bank Group. The Better
    Work Program has been around for more than a decade. The first
    such program was what is called Better Factories Cambodia. So
    it is not a terribly old program, about 12 or 13 years old. It
    has expanded to a few other countries around the world. I
    mentioned some, but also including Haiti and Vietnam and
    Lesotho, Jordan and so forth.
        In terms of going back to your question about leverage, we
    sit on both the donors committee and the advisory committee of
    the Better Work Program and have the ability to have some
    influence. We are not the final decisionmakers. That is the
    management group led by senior officials at the ILO and IFC.
    So, for example, in this case, Bangladesh has long indicated
    they want to be part of Better Work. We see that as
    potentially, if it is well administered, a step forward in
    terms of regularizing some of the issues and having a more
    systemic program of dealing with freedom of association and
    other issues in the workplace.
        So it was last fall that that management group laid down
    some markers--they have variously been called conditions, risk
    factors--for what would be necessary for Better Work to take
    hold in Bangladesh. Thus far, they have not been met. There has
    been progress in one bucket, on union registration, that
    Assistant Secretary Blake mentioned and that I also mentioned
    in the written testimony. The other is these labor law reform
    amendments, not the entire package but four specific ones, and
    we think that things are moving in the right direction,
    although it is a bit complicated by the fact that there have
    been some different versions, at least an English translation,
    of one or two of those.
        So we are eager to see, and more importantly the Better
    Work leadership is eager to see in the coming days, exactly
    what gets introduced and taken up by Parliament so we know
    whether those are met, and then Better Work can decide whether
    the situation is sufficient to move forward. If it does, then
    there are a lot of big questions for us as well as other
    donors, such as the Australians and the British and some of the
    Scandinavian countries and the Dutch and others, who have
    supported Better Work and have indicated some interest in doing
    so in Bangladesh.
        Senator Kaine. Thank you, Mr. Chairman.
        The Chairman. Thank you, sir.
        Senator McCain.
        Senator McCain. Thank you, Mr. Chairman, and thank you for
    holding this hearing, Mr. Chairman. This is, according to what
    I understand, one of the most horrific accidents, industrial
    accidents in history, and it certainly deserves everyone's
    attention. Unfortunately, some of these conditions, I am told,
    exist not only in Bangladesh but in other places in the world.
        Secretary Blake, you probably already addressed this, but
    what are your short- and long-term priorities in this area
    which you enumerated, including improving the Government of
    Bangladesh's capacity to improve the infrastructure within
    Bangladesh to address building and worker safety?
        Mr. Blake. Senator, we earlier talked about how this is
    going to have to be a comprehensive program on the part of all
    of the stakeholders. But since you talk about the Bangladeshi
    side of it, it will be very important that there first be
    freedom of association, and we have been talking about it
    earlier. Twenty-seven unions have been registered. Had there
    been a union representative on the ground at Rana Plaza, that
    tragedy would not have happened.
        But there also needs to be a comprehensive effort on the
    inspection and safety side, and the enforcement of that as
    well. Again, we had a detailed discussion of that. We think
    that the buyers and the Bangladesh Garment Manufacturers and
    Exporters Association have a key role to play, both of them, in
    helping to build up an independent cadre of inspectors, both on
    the fire safety side and on the structural soundness side as
    well, to back up whatever inspections are done by the
    government.
        So there is a very comprehensive series of steps that have
    to be taken but that are only really just beginning now.
        Senator McCain. Are you confident that they will be taken?
        Mr. Blake. Well, I do not want to--we are pushing hard on
    those. I think--I am fairly confident----
        Senator McCain. In other words, I guess, what kind of
    cooperation are you getting?
        Mr. Blake. I think we are getting a lot of cooperation. We
    have certainly gotten the government's attention, and we have
    certainly gotten the BGMEA's attention, and as we discussed
    earlier, our own buyers are now working with former Senators
    Snowe and Mitchell to see if they can come up with their own
    plan that we hope will be consistent with the IndustriALL
    Accord that the European buyers have coalesced around.
        Senator McCain. Are you satisfied with the progress so far?
        Mr. Blake. Certainly not. There needs to be much greater
    progress.
        Senator McCain. No, but I mean what you have done so far,
    is this on a timetable?
        Mr. Blake. Yes. I mean, I think we are making progress, but
    there is much more that needs to be done on the part of all the
    stakeholders.
        Senator McCain. Thank you.
        Mr. Karesh, you observed in your prepared testimony the
    USTR's review of Bangladesh's Generalized System of
    Preferences, GSP, trade benefits. What impact would the
    suspension of GSP benefits have on our efforts to improve the
    safety conditions of Bangladeshi workers?
        Mr. Karesh. Thank you, Senator McCain. As others have
    mentioned, our view is that we need a comprehensive effort to
    address these issues, of which GSP is one mechanism that
    provides leverage. It is a significant step. If we were to make
    a determination to suspend or limit, it is significant. We
    believe that there are people within the Bangladeshi Government
    who understand that and would be concerned about taking
    measures to ensure that did not happen.
        Senator McCain. I guess I am curious whether in your
    assessment it would help or hurt if we suspended the GSP?
    Obviously, it would have significant unemployment impact in
    this impoverished country.
        Mr. Karesh. I mean, clearly, in making this type of a
    decision, which ultimately is a Presidential decision--the USTR
    can only make a recommendation to the President--there are
    consequences in any action. Our goal is to address the concerns
    about freedom of association and safety and health, and that is
    why we are taking a very close look at this issue and trying to
    answer that question right now ourselves as to what we can do
    under GSP and with other means to improve the lives and working
    conditions for workers in Bangladesh.
        Senator McCain. So, actually it seems to me that suspension
    of GSP might be the last bullet to shoot rather than the first.
    Would that be correct? In other words, as Secretary Blake was
    saying, lay out what we expect of them and see if they make
    progress or not on it. And then if not, then obviously other
    alternatives have to be considered. Is that an appropriate way,
    or is it the way you are approaching this situation?
        Mr. Karesh. Yes, sir. I mean, we would never take that step
    lightly. We have been engaged on these issues with the
    Bangladeshis for quite a long period of time, and we have not
    seen the meaningful progress that we would like to have seen,
    and that is why we are currently in a review of whether we
    would take that action or not. But it is not something that we
    would take lightly if we were to do that.
        Senator McCain. Tell me a little bit, you and Mr. Biel,
    about what they have not done that you want them to do or that
    they have been slow in doing.
        Mr. Karesh. Do you want to start?
        Mr. Biel. Sure. It covers a number of different areas, and
    it has been mapped out, as Mr. Karesh mentioned, and as Senator
    Kaine mentioned. The petition goes back 6 years. In fact, there
    had been a previous cycle. So the issues are not new, but you
    have got a few different buckets of activity. The ready-made
    garment sector which is, obviously, the focus of this hearing
    and is the largest and most dynamic sector in Bangladesh. The
    shrimp processing sector is another area where there has been a
    history of labor rights abuses. There have been some signs of
    progress made, although interestingly enough, less on----
        Senator McCain. I guess I am asking what you want them to
    do.
        Mr. Biel. Yes. So in these areas, in the sectors, ready-
    made garments, shrimp processing, the export processing zones
    which is a separate legal authority, and with regard to fire
    safety, although that is kind of on the margins of GSP, a
    specific set of steps have been delineated to deal with freedom
    of association and protection of workplace safety. There have
    also been some specific actions laid out, and this has been
    directly communicated in writing from our former U.S. Trade
    Representative Kirk, from our Ambassador in Bangladesh, Dan
    Mozena, to the Bangladeshis, also with regard to some
    investigations of killing of a labor activist and the
    deregistration of civil society groups.
        So it is not an exhaustive list in terms of being something
    that cannot be achieved within a time bound period. So there is
    no misunderstanding of what is on the table and what would be
    at the focal point of a decision on whether to suspend in full,
    suspend in part, not suspend, all the different options.
        But it has all been made quite clear in the last several
    months: here are the steps that need to be taken, and there was
    a GSP hearing that USTR chaired on March 28 and a long
    discussion bilaterally the next day with the two governments
    across the table. So those have been laid out in those areas I
    mentioned and a couple of others.
        Senator McCain. Well, I would appreciate it for the record
    if you would provide us with--and I know, I hope it is not too
    hard--what we expect of them, and also what we expect of
    companies and corporations that do business there. We have not
    addressed that, I think, perhaps in as much depth as I would
    like. What do we expect of the companies and corporations that
    do business there? Obviously, it is a two-way street. And also,
    frankly, it would really ratchet up the unemployment in
    Bangladesh, and I think that is something that at least we
    ought to have as a consideration, not the primary consideration
    but as a consideration, before we take the kind of ultimate
    action.
        Do you agree, Secretary Blake?
        Mr. Blake. Again, I do not want to compromise what the
    President will decide, but I do think that this will have quite
    a far-reaching----
        Senator McCain. But you give the President advice and
    counsel. I expect the President will know a lot of things, but
    not too much about this particular issue, although I am sure he
    is aware.
        Mr. Blake. Well, I think this is quite an important tool.
    The issue is how do we best leverage that tool to get the
    progress on the ground that we are seeking, and that is the
    issue that we are now discussing internally.
        Senator McCain. Well, I thank you for the nonanswer.
    [Laughter.]
        Senator McCain. Thank you, Mr. Chairman.
        The Chairman. The State Department is very good at that.
    [Laughter.]
        Senator Corker wants to make a comment, and then I have one
    final question, and then we will go to the next panel.
        Senator Corker. Mr. Chairman, I have another hearing that
    got moved back because of votes today, and I know this is an
    important time to go ahead and have this hearing. I appreciate
    you doing that. I need to step out for something that has been
    set for some time, but I know the next panel is coming up. One
    of the questions I have after hearing the first panel is, it
    would seem to me that in a supply chain, especially for larger
    enterprises, there are certifications that you can get all
    throughout the supply chain. Even if the Government of
    Bangladesh is not enforcing certain standards, by contract, you
    can ensure that those things are occurring. I hope the next
    panel will address that.
        I do look forward to the industry here coming together on a
    uniform agreement that they are working on, and I look forward
    to them coming up and talking with us after June 30 about the
    results of that.
        Thank you for being here, and thank you for the second
    panel that I will not see. Thank you.
        The Chairman. I have one final question, and I think the
    Secretary might be the right person to answer it, but I welcome
    anyone of you who may be involved in this.
        What is the status of the investigation into the April 2012
    murder of Bangladeshi labor organizer, Aminul Islam? It is my
    understanding that case remains unsolved, and key leads have
    apparently been dropped.
        Mr. Blake. Sir, the case does remain unsolved. A suspect
    was identified in November 2012, but since then there has been
    no progress that I am aware of on that case. So this remains a
    very important part of our dialogue with the Government of
    Bangladesh, to see this solved, because it sends a signal,
    quite frankly, about what kind of respect is going to be
    accorded to labor activists.
        So it is very, very important that this be fully
    investigated and that the people who are responsible be brought
    to justice.
        The Chairman. Well, April 2012, so that is over a year. You
    say it is part of our dialogue. I am not quite sure what that
    means. How intense are we actually asking about this case? What
    followup are we seeking from this case? I mean, how is it that
    there are suspicions about why this case has ended up in dead
    ends?
        Mr. Blake. We do ask about it. It was when former Secretary
    Clinton was in Bangladesh the last time, she raised this in all
    of her meetings. She talked about it publicly. I raise it in my
    meetings with the Bangladeshis here, and of course our
    Ambassador on the ground is very active on this.
        The Chairman. And what do they say?
        Mr. Blake. Well, just exactly what I just said, that the
    case remains under investigation but they do not have anything
    further to report.
        The Chairman. And the person who was arrested, is he still
    in incarceration?
        Mr. Blake. He is not incarcerated, to my knowledge.
        The Chairman. Well, I look forward to getting a further
    report from State on this.
        Mr. Blake. Thank you.
        The Chairman. With the thanks of the committee to all of
    you, we will continue to be engaging with you on this issue. We
    thank you, and the panel is excused.
        As we do that, let me introduce our second panel this
    morning.
        Ms. Celeste Drake, who is a Trade Policy Specialist with
    the AFL-CIO; and Mr. Johan Lubbe, an international labor and
    employment partner at Littler Mendelson, who is advising
    American retail and apparel industry associations, including
    the American Apparel and Footwear Association, the National
    Retail Federation, the Retail Industry Leaders Association, the
    U.S. Association of Importers for Textiles and Apparel.
        And I would ask Senator Kaine to assume the chair. I look
    forward to coming back because I do have questions for this
    panel.
        Once you are situated, we will start off with Ms. Drake and
    then move to Mr. Lubbe.
        Senator Kaine [presiding]. Thank you to the witnesses.
        Mr. Lubbe, please proceed with your testimony, and then we
    will move to questioning after Ms. Drake's testimony.
        I am sorry. It was Ms. Drake first, and then Mr. Lubbe.
    Thanks.

     STATEMENT OF CELESTE DRAKE, TRADE POLICY SPECIALIST, AMERICAN
     FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS,
                             WASHINGTON, DC

        Ms. Drake. Thank you, Senator. I thank you for the
    opportunity to testify today on important labor issues in
    Bangladesh. I have submitted written testimony for the record
    and will summarize my testimony here.
        Many of Bangladesh's 4 million garment workers, the vast
    majority of them young women, risk their lives every day,
    working in thousands of unregulated and poorly constructed
    factories. Their contribution to Bangladesh's $19 billion
    garment industry has been rewarded by abysmally low wages,
    denial of rights, and unacceptable workplace conditions.
        No silver bullet will provide an overnight solution to this
    longstanding problem, but the clear path forward requires
    unprecedented efforts by the Government of Bangladesh, local
    factory owners, international brands, and workers themselves.
        Bangladesh's labor practices and working conditions have
    been at issue for more than 20 years, and yet recent
    catastrophes at Rana Plaza and Tazreen Fashions leave no doubt
    that the current approach is an abject failure.
        While it is, of course, the responsibility of the
    Government of Bangladesh to enact and enforce laws regarding
    workplace safety and worker rights, workers and employers are
    critical partners. That is why the first step in the path
    forward is for all clothing brands sourcing in Bangladesh to
    sign the binding Accord on fire and building safety. This
    Accord will ensure that factories become safer, brands provide
    their fair share, and workers can advocate on their own
    behalves, free from retribution.
        Already 45 brands, including the largest producer in
    Bangladesh, the second-largest general retailer in the world,
    and three American brands have signed. The other large American
    brands, including Walmart, Target, the Gap, JCPenney, and more,
    have refused to sign. Some of these American brands are
    pursuing an alternate agenda, an agenda that, if based on
    existing corporate social responsibility programs, simply will
    not work. These unilateral schemes have already proven
    themselves ineffective, and their failures can be measured in
    corpses.
        Given that about 60 percent of Bangladesh's factories are
    at risk of collapse and that two of the four worst factory
    disasters in the history of the garment industry happened in
    Bangladesh in the last 7 months, it is time for those profiting
    most from the system to help reform it.
        Instead of abdicating responsibility to social compliance
    organizations, international brands, by signing and complying
    with the Accord, can help reverse some of the damage of their
    relentless race to the bottom. PVH, Sean John, and Abercrombie
    & Fitch have already decided that is good business.
        The importance of the Accord actually serves to underscore
    the role of the government. The agreement may have little
    practical impact if workers cannot organize and act
    collectively. Organized workers are the most effective monitors
    of their own safety and rights. But without laws securing those
    rights and a credible threat of sanctions to deter violations,
    some employers will just simply continue to cut corners.
        Which brings me to point two: The administration must act
    to withdraw or limit Bangladesh's GSP benefits until the
    government has taken meaningful, concrete, and measurable steps
    to ensure its workers can exercise their internationally
    recognized labor rights, including the rights of freedom of
    association, collective bargaining, and acceptable conditions
    of work.
        The time for granting the benefit of the doubt has passed,
    and workers have paid for U.S. patience with their lives.
    During nearly 6 years under the current GSP petition, steps
    forward on worker rights have come hand in hand with steps
    backward. For example, when a union has been allowed to
    register, the government has also often looked the other way
    when its founding officers were fired. When fires or other
    workplace catastrophes have occurred, the government has formed
    high-level commissions or announced new safety plans, none of
    which make workers appreciably safer.
        Superficial changes or promises to make change are
    insufficient to meet the GSP standard. Promises do not provide
    workers the confidence they need to exercise their rights and
    will not reverse the race to the bottom.
        If it fails to act to limit or withdraw GSP benefits, the
    administration will send the wrong signal to all GSP
    beneficiaries, that the United States is not serious about
    labor rights and working conditions. Bangladeshi workers should
    not be given the false choice between low-wage, no-rights jobs,
    or no jobs at all. Instead, their government must defend their
    rights, reverse the status quo, and make Bangladesh a more
    attractive investment in the process.
        The Government of Bangladesh can implement concrete,
    measurable changes quickly; and if it does so, it can earn back
    its tariff preferences, attract new customers and investors,
    and build the value of brand Bangladesh. None of this is easy
    nor instantaneous, but with enforceable standards and a
    commitment to tripartite problemsolving, a win-win solution
    really is possible.
        I would be happy to answer any questions you may have.
        [The prepared statement of Ms. Drake follows:]

                      Prepared Statement of Celeste Drake

                                i. introduction
        The AFL-CIO, on behalf of its 57 affiliated unions, appreciates
    this opportunity to testify on Labor Issues in Bangladesh. We represent
    workers in every industry and economic sector, from manufacturing to
    mining to services. Collaborating with working people around the world,
    we work to improve labor laws, increase compliance with labor
    provisions of trade and preference agreements, and empower workers to
    improve their own lives and conditions of work.
        Bangladesh, with nearly 150 million inhabitants, is a low-income
    country that aspires to become a middle-income country by 2021. The
    State Department has documented numerous and persistent human rights
    abuses in Bangladesh, the most significant being ``enforced
    disappearances, discrimination against marginalized groups, and poor
    working conditions and labor rights.'' \1\ It is against this backdrop
    that Bangladesh's garment sector--its export growth engine--sits,
    employing about 4 million workers, over 80 percent of them women, many
    of them young and not fully literate. Workers in this sector earn about
    $38 a month, the global low for the industry, yet they sew for some of
    the world's best-known brands.
        Bangladesh was most likely not on most American consumer's radar a
    year or two ago, but that is no longer the case. The catastrophic
    collapse of the Rana Plaza Building which killed 1,129 Bangladeshis,
    mostly young women, on April 24, has raised this least-developed
    country's profile--and created an opportunity that's being called a
    ``turning point.''
        This is indeed a critical moment for Bangladesh. If the Government,
    factory owners, and international brands cooperate to make profound
    reforms to ``business as usual'' in Bangladesh, committing to
    enforceable standards for workplace safety and worker rights, it can be
    the point at which brand Bangladesh begins to grow in stature. If
    instead, this moment is not seized, and a flurry of unenforceable
    promises are made in order to obscure the fact that little will change
    for Bangladesh's workers, this moment will not be remembered, but will
    simply become another in a long line of preventable tragedies for which
    the world's most vulnerable bear the costs.
        Achieving real change for Bangladesh's workers will require
    determination and followthrough by both the public and private sectors.
    The U.S. Government must take action on the petition to limit or
    suspend Bangladesh's benefits under the Generalized System of
    Preferences to signal to the Bangladesh Government that its lack of
    progress will no longer be tolerated and that substantial changes to
    its labor regime are necessary. And the U.S. brands who source in
    Bangladesh, but who have so far refused to sign on to the Accord on
    Factory and Building Safety in Bangladesh, must also join in the
    binding agreement to protect the very workers whose daily efforts
    create the brand's products--voluntary compliance plans, which do not
    work, are not an acceptable substitute.
                                  ii. overview
        Many of Bangladesh's 4 million garment workers, the vast majority
    of whom are young women, risk their lives every day, working in
    thousands of unregulated and often poorly constructed factories. Their
    contribution to the $19 billion garment industry has been rewarded by
    abysmally low wages, consistent denial of internationally recognized
    rights, and workplace conditions reminiscent of the U.S. sweatshops of
    100 years ago. Their jobs can literally kill them.
        The U.S. and Bangladesh Governments have for years talked about
    improving the situation for workers. Likewise, Bangladesh's employers
    and international brands have explained their commitments to protecting
    workers and upholding standards. Despite the creation of a plethora
    committees, working groups, and voluntary compliance programs, the
    unacceptable labor conditions and practices remain.
        In the last 15 months alone:

       Labor organizer Aminul Islam was tortured and murdered in
            April 2012--the case remains unsolved and key leads have
            apparently been dropped.
       A deadly fire at Tazreen Fashions in November 2012 killed at
            least 112 workers in conditions strikingly similar to the
            Triangle Shirtwaist factory fire.
       Forty-four factory fire incidents have occurred since the
            Tazreen fire, many of which caused injuries as workers sought
            to escape blocked exits, and three of which were deadly--the
            most recent factory fire, which injured 20 workers, occurred on
            May 22.
       Many of the workers who have successfully registered with
            new unions during 2013 (22 new unions in the ready-made garment
            sector, for example) have faced termination and other antiunion
            discrimination; none have been able to secure formal collective
            bargaining agreements (though there have been spot agreements
            on specific issues).
       Thousands of workers have engaged in protests over poor and
            unsafe working conditions and nonpayment of wages--many of the
            protests could have been avoided if workers had effective
            mechanisms to solve workplace disputes in an orderly fashion.
       The Rana Plaza building, which contained several garment
            factories, collapsed, killing 1,129 workers and injuring at
            least 1,500 more--the deaths and injuries could have been
            avoided if the workers who saw the cracks and at first refused
            to enter the building had not been forced to work by employer
            threats to fire them or withhold their pay.
       The Bangladesh University of Engineering and Technology,
            which is performing a survey of garment factories in
            Bangladesh, reported that 60 percent of the buildings housing
            factories are vulnerable to collapse.\2\

        It is worth noting that three of the four worst disasters in the
    history of the global apparel industry have happened in the last 8
    months, two of them (Rana Plaza and Tazreen Fashions) in Bangladesh.\3\
    Bangladesh's labor practices and working conditions have been at issue
    for more than 20 years \4\--and yet these recent catastrophes leave no
    doubt that the current approach (weak to nonexistent governmental
    efforts combined with voluntary corporate compliance programs) is an
    abject failure.
        The problems that workers face in asserting their rights in
    Bangladesh are complex--but not insoluble. To make real changes for
    workers--who should not be forced to choose between working in a
    deathtrap and having no job at all--will take a truly tripartite
    effort, in which workers, business interests, and the relevant
    governments agree to work together to implement a high-road approach to
    economic development in Bangladesh.
        While it is of course the responsibility of the Government of
    Bangladesh to adopt, maintain, and enforce laws that secure fundamental
    labor rights for its workers--workers and employers are critical
    partners in that effort. When workers are free to form unions and
    exercise labor union rights without fear of recrimination, workers
    become full partners in creating safer workplaces and higher
    productivity. Likewise, employers are critical partners--particularly
    when applicable labor laws and practices are strong and effective
    enough to deter those who would otherwise cut corners on safety and
    deny rights to their workers. Employers who cooperate in labor law
    compliance reap benefits as well, in the form of more productive
    workers with increased longevity (instead of workers who jump from
    factory to factory looking for better wages and working conditions).
        In Bangladesh, the role of the employers is severely constrained by
    the pressure they face to minimize costs in order to win contracts from
    global brands that form part of the $1.5 trillion international fashion
    industry. The global fashion industry pays rates that, in effect, cause
    the very problems that plague Bangladesh's factories and their workers.
    Some factories may wish to do the right thing, but feel they cannot
    afford to do so. Individual factories that invested in needed repairs
    and upgrades would be unable to charge competitive prices and would
    soon find themselves out of business. To resolve this ``prisoner's
    dilemma,'' the international brands must take responsibility for their
    role in Bangladesh's low-road, no-rights development model.\5\
        This is why the AFL-CIO, along with partners including IndustriALL,
    UNI Global Union, the Worker Rights Consortium, the Clean Clothes
    Campaign, United Students Against Sweatshops, the International Labor
    Rights Forum, and others, has strongly endorsed the Accord on Fire and
    Building Safety in Bangladesh, already signed by more than 40 major
    brands including American brands PVH (parent company of Calvin Klein
    and Tommy Hilfiger), Sean John, and Abercrombie & Fitch. This historic
    Accord is a binding agreement regarding workplace fire and building
    safety in Bangladesh, which means it has a chance to make a real
    difference instead of papering over problems with certificates and
    audits that bear little relation to the real conditions prevailing in
    Bangladesh's factories.
        The agreement guarantees worker participation through
    representative organizations, recognizes the role of government and
    takes measures to combat corruption by requiring rigorous inspections,
    transparent reporting of audits, and public oversight of results. This
    agreement offers an integrated and sustainable solution. Brands that
    have signed it have recognized that cutting and running from the
    problems the fashion industry helped to create in Bangladesh is simply
    not an option.
        The existence of this new binding Accord also serves to underscore
    the role of the Government. The agreement is likely to have little
    practical impact if workers are not allowed to organize and act
    collectively. Organized workers are empowered to stand up for their own
    safety and rights. However, they can only do so if the Government of
    Bangladesh turns its words of support for labor rights into active,
    effective efforts to defend those rights--which includes changes in
    labor law and in enforcement regimes. Mere lip service will only result
    in the status quo, in which impoverished young women take their lives
    into their hands every single day just by going to work.
    iii. international brands cannot avoid responsibility for their role in
       denying bangladesh's workers safe workplaces and free exercise of
                                     rights
        While all participants in the supply chain--suppliers, brands, and
    especially workers--have a role to play in ensuring that workplace
    safety and respect for international labor standards improve, the role
    of international brands is especially critical. Brands have the
    financial leverage to incentivize meaningful change. The question is
    whether or not they will. While state-of-the-art factories do not
    happen overnight, the binding and legally enforceable Accord on Fire
    and Building Safety in Bangladesh ensures that owners will repair
    factories or lose access to contracts. It also ensures that
    multimillion dollar international brands pay their fair share of the
    costs. Importantly, the agreement will strengthen workers' right to
    organize and defend their own rights--including the right to refuse to
    enter or remain in an unsafe workplace.
        Clothing brands that have sourced from Bangladesh over the past two
    decades have made plentiful profits based on the world's lowest wages
    and most dangerous conditions. Instead of now leaving this developing
    country and its workers with the mess created by the ``race to the
    bottom'' of the global fashion industry, international brands must stay
    in Bangladesh and help usher in a ``high road'' strategy.
        While more than 40 global brands have signed the Accord, including
    three leading American brands (PVH, Sean John, and Abercrombie &
    Fitch), many other leading American brands, including the Gap, Walmart,
    Target, and JCPenney have not.
        Reportedly, Walmart and the Gap are joining other unnamed brands to
    develop an alternative proposal.\6\ The AFL-CIO strongly believes there
    is no need for an additional proposal. The new effort reportedly
    includes no worker input, merely ``representatives from retailers and
    brands, as well as participants from industry associations.'' \7\ An
    agreement that does not include workers in its development is likely to
    lack buy-in and exclude provisions to ensure worker engagement and
    empowerment. Given that workers are the best monitors of their own
    safety, this omission is critical.
        It is unclear what an alternative proposal would achieve. If it
    were to create binding but different standards, that would only
    complicate compliance and enforcement for Bangladeshi factories and
    their employees--how would workers (many of them illiterate) know which
    safety regime applied to their workplace at any given time?
        The AFL-CIO's bigger concern, however, is that any new proposal
    would create voluntary, rather than binding standards. Unfortunately,
    as the AFL-CIO demonstrated in its recent publication ``Responsibility
    Outsourced: Social Audits, Workplace Certification and Twenty Years of
    Failure to Protect Worker Rights,'' \8\ voluntary standards don't work.
        Voluntary corporate social responsibility (CSR) standards have
    problems with governance, transparency, proper inspection methodology,
    independent conciliation and mediation involving unions, and long-term
    commitments by global brands. Their unilateral nature fails to provide
    meaningful roles for governments and workers--and certainly does not
    ``empower'' workers to become leaders in creating safe and productive
    workplaces.
        For example, while the programs may require ``audits,'' these
    ``audits spot some very particular and relatively easy to identify
    problems, but even then there usually are no consequences for
    noncompliance or rewards for improvements. Harder-to-spot problems
    related to gender discrimination or freedom of association remain
    invisible. As few auditors come from backgrounds sensitive to these
    issues and often do not understand what freedom of association means.''
    \9\
        For example, Ali Enterprises in Pakistan, site of a September 2012
    fire that was one of the four deadliest disasters in the history of the
    garment industry, had been newly awarded an ``SA8000'' certificate by
    Social Accountability International (SAI), a multi-stakeholder
    initiative operating in the social audit industry.\10\ But the
    certificate clearly did not provide safety for the nearly 300 workers
    killed in the fire.\11\ Likewise, various programs had audited Tazreen
    Fashions and Rana Plaza--none of which helped save the workers employed
    there.
        Twenty years of evidence from Bangladesh and other developing
    countries demonstrates that corporate social responsibility programs,
    which are based ``mainly on short and cursory visits to factories and
    no proper discussion with workers . . . will never achieve decent,
    secure jobs for the millions of workers at the sharp end of the global
    economy.'' \12\
        In addition, the voluntary nature of these programs means that
    brands can change, weaken, or drop the programs at any time, leaving
    workers in the lurch. To the extent that local factories and the
    Government of Bangladesh begin to engage in efforts to improve labor
    conditions and secure rights for workers, voluntary programs that can
    be withdrawn at any time could harm these efforts.
        While the diversity of CSR programs means that each may have
    stronger and weaker elements, the AFL-CIO report makes clear that where
    workers are represented in the process, especially through unionism,
    the chances of success are real, while corporate-driver initiatives
    have largely failed to deliver for working people and their
    communities.\13\
        The global industry that played a role in creating the conditions
    in Bangladesh's garment industry must play a role in fixing it, not
    outsource that role to compliance firms or abandon Bangladesh's workers
    altogether. A voluntary system that brands can walk away from as soon
    as the buzz about Rana Plaza dies down is not the answer. The AFL-CIO
    urges North American brands to join the existing and enforceable Accord
    on Fire and Building Safety in Bangladesh rather than create a new
    proposal that has the potential to confuse and undermine progress the
    Accord has the potential to achieve.
      iv. the afl-cio encourages the u.s. government to withdraw benefits
       from bangladesh pursuant to section 19 u.s.c. Sec. 2462(d) of the
                    generalized system of preferences (gsp)
        The AFL-CIO's work to secure labor rights for Bangladeshi workers
    through the GSP process has a long history. Since 1990, the AFL-CIO has
    filed five separate GSP petitions related to systemic and widespread
    violations of internationally recognized worker rights, in law and in
    practice, in Bangladesh (with filings raising new issues beginning in
    1990, 1999, 2004, 2005, and 2007). Each time, the AFL-CIO believes that
    the Government of Bangladesh failed to make meaningful progress on the
    adoption and enforcement of internationally recognized worker rights.
    Instead, following each new petition, the Government would make
    promises and adopt measures to give the appearance of sincerity about
    worker rights. But implementation was delayed and enforcement was weak
    to nonexistent.
        The most recent petition was filed in 2007, and included evidence
    that workers had been threatened, arbitrarily arrested, and even
    tortured for trade union activity. The United States Trade
    Representative (USTR) accepted the petition for review on September 6,
    2007, and subsequently placed Bangladesh under ``continuing review'' to
    monitor the progress of the Government of Bangladesh toward a set of
    worker rights benchmarks elaborated in a 2008 demarche. The decision to
    place Bangladesh under review, combined with the subsequent engagement
    of the U.S. Government, succeeded in pushing the Government of
    Bangladesh and employers to take some initial efforts on behalf of
    workers. Unfortunately, the Government of Bangladesh's efforts have
    been neither sustained nor effective. It has been, in effect, a case of
    one step forward, two steps back.
        For example, in the shrimp sector, the Government of Bangladesh,
    around 2010, allowed some independent unions to register. However,
    employers reportedly then subjected the new unions to a union-busting
    campaign, including a press conference organized by employers at which
    they reportedly denounced the labor organizations that had helped the
    workers to form the unions, as well as local labor authorities. The
    Government failed to defend worker rights, and all progress on
    organizing independent unions in the sector ceased. To our knowledge,
    only one independent union in the sector is still in operation.
        Similarly, a prior GSP case, the Government agreed to a new law
    allowing some freedom of association in the country's Export Processing
    Zones (EPZs). A new law established the right of workers to form worker
    associations in the EPZs. The associations were supposed to be a step
    on the road toward granting full freedom of association, organization,
    and collective bargaining rights for all EPZ workers. Unfortunately,
    that commitment, like so many others, stalled.
        These associations continue to be denied the right to effectively
    collectively bargain (there are no existing collective bargaining
    agreements in the EPZs, nor any reports of bargaining), to form
    federations, or link with unions or other organizations outside the
    zones from whom they can draw technical expertise and other support.
    Workers in some zone factories, including in the largest EPZ employer,
    report that they continue to be denied the right to hold an election to
    create an association. The Government has failed to fulfill its
    commitment to provide access to labor conciliators in the EPZs as
    promised. Workers have even reported the use of a zone ``blacklist,''
    which violates the right of freedom of association by discriminating
    against workers for union preference or activity. When workers have
    reported instances of antiunion discrimination in the EPZs, the BEPZA--
    which has full authority over labor relations in EPZs, rather than the
    Ministry of Labor--has usually failed to act on their behalf.
        Either the BEPZA or the Government of Bangladesh can address most
    of these failures by simply changing current practice or by issuing a
    new rule or regulation, but neither entity has done so.\14\ This choice
    to leave Bangladeshi workers without the ability to exercise their
    internationally recognized worker rights indicates that the current
    Government lacks sufficient political will to act.
        Given the issues documented in its 2007 GSP petition and numerous
    subsequent filings, it is the view of the AFL-CIO that the Government
    of Bangladesh is not ``taking steps to afford to workers in
    [Bangladesh] (including any designated zone in that country)
    internationally recognized worker rights'' (as required by 19 U.S.C.
    Sec. 2462(c)(7)), and that GSP benefits should be withdrawn. It is our
    sincere belief that the Government of Bangladesh has exhausted any
    ``benefit of the doubt'' and that at this point, the only recourse left
    is to spur the Government of Bangladesh to protect Bangladesh's workers
    by limiting, suspending, or withdrawing GSP benefits pursuant to U.S.
    law.
        The GSP facility provides a critical mechanism to pressure
    recalcitrant governments to take clear and concrete actions to afford
    workers their internationally recognized worker rights. The labor
    eligibility criteria for the GSP program exist for very important
    reasons, including the desire to promote fundamental labor rights,
    which are positively linked with a country's development\15\ and the
    desire to prevent a beneficiary country from unfairly undercutting
    workers in every other country in the world (including the U.S.) by
    abusing, or permitting the abuse of, its workers. If such behavior were
    allowed to proliferate, it would only exacerbate the ``race to the
    bottom,'' in which countries compete for investment by weakening their
    labor rights regimes. Such a race may indeed lower costs--but it also
    suppresses consumer demand, interferes with the formation and growth of
    the middle class, and undermines the fundamental human rights as laid
    out by the International Labor Organization and in the Universal
    Declaration of Human Rights.
        Some opponents of Presidential action on the GSP have argued that
    it will only further harm workers by throwing them out of work. Such
    arguments are speculative.\16\ More importantly, they present a false
    choice, as if the only options for Bangladesh's millions of workers are
    to work in deathtraps, with meager wages and no rights, or to have
    rights, but no jobs. Clearly, other alternatives are possible,
    including a Bangladesh in which workers are secure enough in their
    rights to advocate for their own welfare, health, and safety on the
    job.
        Other opponents to GSP limitation, suspension, or withdrawal argue
    that any change to Bangladesh's current benefits will result in lost
    leverage in the effort to improve labor rights for Bangladesh's
    workers. Nothing could be further from the truth.
        Leverage under current conditions is almost certainly already gone.
    The Bangladesh brand is already tarnished. A recent Harris Interactive
    Poll revealed that almost 70 percent of Americans had heard of the Rana
    Plaza collapse and almost 40 percent said they will be less likely to
    buy clothes made in Bangladesh.\17\ A number of well-known brands,
    quite aware of the ongoing labor abuses, have not sourced from
    Bangladesh for some time, and some, Disney being the most public, have
    made recent announcements to ensure their customers know they do not
    source there.
        Decisions not to produce in Bangladesh do not help improve
    conditions for Bangladesh's impoverished workers. Demonstrated steps to
    afford internationally recognized worker rights--as the Government of
    Bangladesh would have to show to gain back full GSP benefits--would
    demonstrate to the world's brands and consumers that things have
    changed for the better. Regaining GSP status (with a U.S. seal of
    approval) could help Bangladesh's factories lure back brands and
    attract new customers--while continuation of the status quo is likely
    to see additional publicity sensitive brands abandon the country
    entirely (an outcome the AFL-CIO strongly opposes).
        Moreover, it is the failure of the U.S. Government to act on the
    GSP petition that seems most likely to result in lost leverage.
        When the U.S. fails to enforce its own laws, particularly when
    sufficient time--in this case about 6 years--has been granted, it only
    creates an atmosphere of impunity, not only for Bangladesh, but also
    for every other country receiving GSP benefits. The USTR is currently
    reviewing the labor rights practices of a number of countries,
    including Iraq, Georgia, Fiji, Uzbekistan, and the Philippines. What
    message will continued failure to act send to these Governments? If
    they believe that mere promises to change (rather than concrete,
    measurable improvements) are all that is necessary to continue to
    receive GSP benefits while pursuing a low-road strategy that hurts
    workers worldwide, it seems almost certain they will reduce their
    efforts to comply with the law. An atmosphere of impunity regarding
    labor rights may pad the profit margins of a few of the world's largest
    brands, but it certainly does nothing to increase shared prosperity.
        On the other hand, action to suspend, limit, or withdraw GSP
    benefits for Bangladesh would send a different message--one that says
    that workers deserve more than lip-service; that progress is critical;
    and that the U.S. will indeed enforce its own laws. The GSP statute
    does not create a right to duty-free exports to the United States. It
    establishes a privilege, one that must be earned through fair labor and
    trade practices. A reduction or loss of GSP benefits would provide an
    incentive to the Government of Bangladesh to make substantial changes
    to recover those benefits and restore a favorable image for brands and
    investment.
        Accomplishing such change in Bangladesh is possible. The AFL-CIO's
    sister organization the Solidarity Center has an office in Bangladesh,
    which has already been supporting worker-led unions in the garment
    sector and is poised to accomplish more if the Government of Bangladesh
    would become a partner in improving worker rights and acceptable
    conditions of work. We are also hopeful that the U.S. Government will
    increase its commitment to development programs in Bangladesh,
    including those that will help strengthen the labor rights regime and
    educate Bangladesh's workers and employers about democratic labor
    unions, worker rights, and acceptable conditions of work.
        Moreover, there are several steps that the Government of Bangladesh
    can take right away to demonstrate that it is ``taking steps to afford
    to workers in [Bangladesh] (including any designated zone in that
    country) internationally recognized worker rights'' (as required by 19
    U.S.C. Sec. 2462(c)(7)). For instance, it can:

       Drop all remaining charges against worker rights advocates
            Kalpona Akter and Babul Akhter (unless the cases move forward
            immediately);
       Remove threats against the registration of the advocacy
            organizations BCWS & SAFE;
       End police surveillance of union activists and labor NGOs;
       Provide to the U.S. Government--and make public--quarterly
            reports on the progress of the investigation into Aminul
            Islam's murder;
       Consistent with fundamental labor rights, eliminate any
            existing or proposed government approval for unions (including
            worker associations inside the EPZs) to affiliate with each
            other and allow all unions to link with outside organizations
            such as NGOs;
       Via rule or regulation, allow its Department of Labor to
            monitor union registrations and unfair labor practice
            complaints within the EPZs;
       Accept ILO and International Trade Union Confederation
            criticism and recommendations on the draft labor law
            amendments, including the recommendation to increase worker
            participation in the process\18\;
       Transfer, as quickly as possible, resources from the
            industrial police who act largely as agents of employers to
            inspection functions to investigate building and fire safety
            and investigate unfair labor practices.

        While not a complete list of the actions needed to secure
    internationally recognized worker rights in Bangladesh, this list
    illustrates that there are indeed many measurable changes the
    Government of Bangladesh could make right away to demonstrate that it
    is taking the required steps under the GSP statute.
        The AFL-CIO wants a vibrant, productive garment industry in
    Bangladesh, in which workers have good jobs and owners make good
    returns on their investments. Both the Government of Bangladesh and
    international brands have obligations to ensure that they create an
    environment in which that can take place.
                    v. selected rana plaza survivor stories
    Anna Khatun, 16
        Anna Khatun, 16, joined one of the factories in the Rana Plaza
    building 4 months ago as a helper. She does not even know the factory
    name--just that she was working on the fifth floor.
        ``Because of poverty, I have sent my younger daughter to work and
    now she lost her right hand,'' said her mother. A wall collapsed on
    Anna--and rescuers had to amputate her hand to free her from the
    rubble. Anna could not even respond when asked about what the future
    might hold.
        ``What will be her future? We don't know. We only know she is
    disabled now,'' said her mother.
    Arati Bala Das, 18, New Wave Style, Ltd.
        Arati Bala Das, 18, was pulled from the Rana Plaza wreckage after
    being pinned under a concrete block for 3 days. She and her mother,
    Titon Bala, worked at New Wave Style Ltd. Arati's mother died in the
    disaster. Arati's right leg had to be amputated to save her life.
        Arati remembers a power outage hit immediately before the building
    collapsed. ``When the building collapsed, I felt that I was going down.
    When it stopped, I found myself in the dark. It was difficult to
    breathe. I could not see anything. I could not move a bit. I realized
    that two dead bodies fell on my legs and a pillar had fallen on those
    dead bodies. I was very much afraid and I thought I would not be able
    to return alive. After few moments, I heard screaming workers, crying
    for help and I assumed that seven or eight more workers were there.''
    Rescuers, who found her after 3 hours, provided saline water to her
    through a tube until they could rescue her 3 days later.
        Arati's youngest sister, Akhi, 2, missed her mother. She would not
    stop crying and would not eat. The family brought her to the hospital
    so Arati could feed her. Arati has two more sisters--Lucky, 7, and
    Lovely, 12. Their father, Adhir Chandra Das, a poor day-laborer, lives
    with his family in a rented hut in Savar. Adhir is now left without the
    income of his wife and eldest daughter, which the family needs to
    survive.
        Arati is afraid and sad. ``I will never return to work at garment
    factory. I want the government to do something for us. I will not be
    able to work in future, at least the government can arrange artificial
    leg for me.''
    Md. Pintu, 18, and Shilpi, 21, New Wave Bottom Ltd.
        Md. Pintu, age 18, and his sister-in-law, Shilpi, 21, worked for 3
    years as sewing machine operators in New Wave Bottom Ltd., on the
    second floor of the Rana Plaza building. They live in a small tin shed
    in Mazidpur Choto Goli, home to the majority of Rana Plaza workers.
        Pintu and other workers noticed a big crack in the beam of the
    floor on April 23, 2013. Management discontinued production at 10 a.m.
    and instructed the workers to leave the building immediately. The next
    morning, Pintu and Shilpi discussed the crack with their family. They
    thought the factory would be closed for a few days for repairs, and
    they would have a safe place to restart their machines. Unexpectedly,
    they heard a loudspeaker announcement: ``All the workers of Rana Plaza,
    go to work. The factory has already been repaired.''
        After hearing the announcement by a representative of the
    building's owner, Pintu, Shilpi, and other workers unwillingly went to
    work, deeply concerned and afraid. Before leaving the house, Shilpi
    looked at her 2-year-old son and sighed.
        A few minutes after the workers arrived on the job, the electricity
    went out, the backup generators turned on and the building collapsed.
    Shilpi was rescued after a few hours and was sent to the nearest
    hospital, Prime Hospital. Then she was sent to Dhaka Medical Hospital
    for further treatment. She continued to lose blood and remained in
    serious condition. After 8 days, she was transferred to the Apollo
    Hospital Ltd. for special care, but she died just after arriving at the
    hospital emergency room.
        Pintu is still missing. His sister has waited outside the building
    with his picture, crying.

    ----------------
    End Notes

        \1\ Department of State, ``Country Reports on Human Rights
    Practices for 2012: Bangladesh,'' available at: http://www.state.gov/j/
    drl/rls/hrrpt/humanrightsreport/index.htm#wrapper.
        \2\ Jason Burke, ``Majority of Bangladesh Garment Factories
    `Vulnerable to Collapse,' '' in The Guardian, June 3, 2013, available
    at: http://www.guardian.co.uk/world/2013/jun/03/bangladesh-garment-
    factories-vulnerable-collapse.
        \3\ See, e.g., Esther Bintliff, ``On Bangladesh, and Some of the
    Worst Factory Disasters in History,'' The Financial Times, Apr. 25,
    2013, available at: http://blogs.ft.com/the-world/2013/04/on-
    bangladesh-and-some-of-the-worst-factory-disasters-in-history/.
        \4\ See Section IV of this document for a history of labor law and
    practice complaints against the Government of Bangladesh.
        \5\ As explained in detail in Section III, existing corporate
    social responsibility programs, which include corporate codes of
    conduct, workplace monitoring, audits, factory certifications, and
    related initiatives simply do not work. These types of programs have
    had a chance to work in Bangladesh for years--with no appreciable
    impact.
        \6\ See, e.g., Matthew Mosk, ``Walmart, Gap Propose Alternate
    Bangladesh Safety Program,'' ABC News, May 31, 2013, available at:
    http://news.yahoo.com/wal-mart-gap-propose-alternate-bangladesh-safety-
    program-195604087--abc-news-
    topstories.html;_ylt=AwrNUbDmEKlRYEEAs3z_wgt.
        \7\ ``Leading North American Retailers and Brands to Address
    Systemic Safety Issues for Workers in Bangladesh Garment Factories,''
    Press Release, Bipartisan Policy Center, May 30, 2013, available at:
    http://bipartisanpolicy.org/news/press-releases/2013/05/leading-north-
    american-retailers-and-brands-address-systemic-safety-issu.
        \8\ Available here: http://www.aflcio.org/content/download/77061/
    1902391/CSReport.pdf.
        \9\ Id., at 28.
        \10\ Id., at 37.
        \11\ As detailed in the AFL-CIO report, SAI does not ``directly
    audit many factories or directly certify brands.'' Instead, it mainly
    designs and markets a system meant to provide consumers and retailers
    with the confidence that a product has been produced in a social
    responsible manner. See id., p. 31.
        \12\ Id., at 1 (Sharan Burrow, Foreward).
        \13\ Id., at 6.
        \14\ EPZ Workers Welfare Association/Society and Industrial
    Relations Act (EWWAIRA) in 2010 Section 90. (``Powers to make rules and
    regulations.--(1) The Government may, by notification in the Official
    Gazette, make rules for carrying out the purposes of this Act. (2) The
    Authority may, with previous approval of the Government, by
    notification in the Official Gazette, make regulations for carrying out
    the purposes of this Act.'').
        \15\ See, e.g., Thomas I. Palley, ``The Economic Case for
    International Labour Standards,'' Cambridge Journal of Economics, Vol.
    28, No. 1, 2004.
        \16\ For example, the ready-made garment sector, by far
    Bangladesh's leading export sector, does not receive GSP benefits and
    seems unlikely to experience job loss as a result of changes in
    Bangladesh's GSP benefits.
        \17\ ``Among Americans Who Know of Bangladesh Clothing Worker
    Deaths, Two in Five Less Likely To Purchase Clothes From There,''
    Sacramento Bee, June 3, 2013, available at: http://www.sacbee.com/2013/
    06/03/5465917/among-americans-who-know-of-
    bangladesh.html#storylink=cpy.
        \18\ For more information on the shortcomings of the proposed labor
    law reform, see, e.g., Munima Sultana, ``Labour Law Amendment Goes
    against Int'l Labour Standards,'' The Financial Express, May 30, 2013,
    available at: http://www.thefinancialexpress-bd.com/index.php?ref=
    MjBfMDVfMzBfMTNfMV85MF8xNzEwNDc=.
        \19\ As told to Solidarity Center staff in Bangladesh as of May 15,
    2013.

        Senator Kaine. Thank you, Ms. Drake.
        Mr. Lubbe.

     STATEMENT OF JOHAN LUBBE, INTERNATIONAL LABOR AND EMPLOYMENT
             PARTNER, LITTLER MENDELSON, P.C., NEW YORK, NY

        Mr. Lubbe. Thank you, Senator Kaine and Senator McCain.
    Thank you for the opportunity to testify here before you today.
    I am here in my capacity as a practicing international
    employment and labor lawyer who has been advising the industry.
    My testimony today will focus on some of the key issues facing
    companies who conduct business in Bangladesh, as well as
    solutions that have been offered to address the issue of worker
    safety.
        The North American retail and apparel community has been
    stunned and saddened at the heart-breaking loss of life from
    the recent tragedies at ready-made garment factories in
    Bangladesh. The problems within Bangladesh are extremely
    complex and systemic. There is no simple one-size-fits-all
    solution that will resolve the current systemic issues. All
    stakeholders must work together to develop a path forward that
    will not only provide a long-term and sustainable solution to
    ensure worker safety, but will also maintain the viability of
    the country as a key manufacturer and supplier to markets
    around the world. The North American retail and apparel
    industry is prepared to play a meaningful role and make a
    substantial contribution.
        Bangladesh is a difficult place to conduct international
    business. First, a deficiency in infrastructure, including the
    structural integrity of buildings, as well as issues with
    electricity grid and water availability.
        Second is the challenge of the enforcement of building
    codes. The country has a set of codes and certificate
    requirements which have not been enforced as they should be.
    The Rana Plaza building collapse only reinforces the need for
    the enforcement of current codes and an examination of whether
    the codes need to be updated.
        Third is the Bangladeshi Government itself. There are many
    reports about rampant corruption within the government which
    need to be addressed. Protection of workers' rights has been
    lacking. The government has signaled a move forward in this
    regard, and that is supported by the industry.
        There is a strong need for shared responsibility to address
    the current issues and challenges in Bangladesh. This includes
    all stakeholders, from the government, private sector, civil
    society, unions, workers, factory owners. Each stakeholder has
    a specific area of responsibility and should not be required to
    usurp the role of the other stakeholders. You have heard
    earlier this morning in testimony mapping out the various roles
    that each stakeholder has to play. I am not going to repeat
    that.
        The tragedies in Bangladesh have prompted a number of
    different responses to address worker and factory safety. These
    efforts have become even more urgent within the industry as
    companies collaborate for continual improvement.
        There were also separate initiatives by the German
    International Development Agency, GIZ, called the Fire Safety
    Alliance in Bangladesh, and IndustriALL global union called the
    Fire and Building Safety Memo of Understanding. A good-faith
    effort was made in late April of this year to merge the GIZ
    action plan with the IndustriALL principles. That failed. In
    that effort, American industry participated.
        IndustriALL then unilaterally announced the Accord and
    provided companies 2 days to sign onto the Accord before they
    released it on May the 15th. While the U.S. retail and apparel
    industry share IndustriALL's goal to improve worker safety to
    make more tangible progress on the ground, U.S. companies
    raised several concerns regarding the Accord, including its
    vague and ambiguous terms which potentially holds unlimited
    legal liability for them.
        The IndustriALL Accord should not be viewed as the sole
    response and solution to the situation in Bangladesh. The
    United States and Canadian companies have come together in an
    alliance to develop a single, unified action plan as they
    believe it will achieve immediate, sustainable, effective and
    long-lasting change for the garment industry and its workers in
    Bangladesh.
        The action plan will build upon the extensive work many of
    these United States and Canadian companies have done in the
    past and continue to do on the ground to address and improve
    health and safety. We have outlined in our written submission
    the legal challenges that we faced, and these range from vague
    terms, the utilization of arbitration, to really rewrite and
    bring clarity to a contract which is not a good drafting
    principle.
        Improving worker safety in Bangladesh is a high priority
    and will require a collaborative effort by all the
    stakeholders. A systemwide solution must address eradicating
    corruption, improving the quality of building construction,
    revisiting the location of factories, the issuing of building
    permits, and the enforcement of codes.
        The U.S. retail and apparel industry is prepared and
    working swiftly toward making a substantial contribution to
    achieving results on the short term and the long term to
    prevent future workplace injuries and deaths of Bangladeshi
    garment workers.
        Thank you for the opportunity.
        [The prepared statement of Mr. Lubbe follows:]

                       Prepared Statement of Johan Lubbe

        Chairman Menendez, Ranking Member Corker and members of the
    committee, thank you for inviting me to testify at today's hearing to
    discuss ``Labor Issues in Bangladesh.'' My name is Johan Lubbe and I am
    a shareholder with the law firm of Littler Mendelson, P.C. Littler is
    the world's largest labor and employment law firm exclusively devoted
    to representing management. I am here today in my capacity as a lawyer
    who practices international labor and employment law and my experience
    advising the U.S. retail and apparel industry specifically the
    associations representing the industry. These associations include the
    American Apparel and Footwear Association, the National Retail
    Federation, the Retail Industry Leaders Association, the U.S.
    Association of Importers of Textiles and Apparel. My testimony today
    will focus on some of the key issues facing companies, who are doing
    business in Bangladesh, as well as solutions that have been offered to
    address the issue of worker safety.
        The North American retail and apparel community has been stunned
    and saddened at the heartbreaking loss of life from the recent
    tragedies at ready-made garment factories in Bangladesh. These tragic
    incidents only underscore the need for the international community to
    come together to build upon the ongoing work in Bangladesh by
    individual companies and other stakeholders to find practical,
    immediate and long-term solutions to ensure the safety of the workers
    in the garment production facilities in Bangladesh.
        It must be noted that the problems within Bangladesh are extremely
    complex. As such, there is no simple ``one-size-fits-all'' solution
    that will resolve the current systemic issues. Any solution requires
    that all stakeholders work together to develop a systemwide solution
    that will not only provide a long-term and sustainable solution to
    ensure worker safety in the Bangladesh garment industry, but will also
    maintain the viability of the country as a key manufacturer and
    supplier to markets around the world. As solutions are developed, it is
    important to allow for flexibility that will enable brands, retailers,
    manufacturers, and other stakeholders to respond swiftly and
    effectively to an ever-changing environment within Bangladesh. This
    flexibility will allow companies who operate different supply chains
    with different factories to make sure they are responding in an
    appropriate manner to the issues before them.
        Many efforts have been announced by multiple parties including
    governments, industry, and others to address the key issues within
    Bangladesh. It is important that everyone recognize the shared
    responsibility that is required for addressing the worker and factory
    safety issues. This responsibility lies with all stakeholders including
    the Bangladesh Government, the United States and other foreign
    governments, factory owners, employer's organizations, workers, the
    buyers in North America and Europe, members of civil society, and
    organized labor. The efforts should all build off of each other to
    achieve the ultimate goal of protecting those who work in the
    Bangladesh garment factories.
                   bangladesh role in the global marketplace
        As committee members are aware, Bangladesh has very quickly become
    a major player in the ready-made garment industry. As has been proven
    through the years, apparel and garment production are critical first
    steps for lesser developed countries to raise their standard of living.
    The garment industry accounts for 80 percent of Bangladesh's exports.
    In 2011, exports from Bangladesh totaled $23 billion. Garment exports
    comprised nearly $20 billion of this total. The industry directly
    employs 4.5 million workers, by far the largest employment sector in
    Bangladesh. It is significant to note that women make up close to 90
    percent of the ready-made garment workforce, allowing for many to
    become the primary breadwinners for their families.
        The bulk of Bangladeshi manufactured garments are sold in the
    European and North American markets. The European market accounts for
    60 percent of Bangladeshi exports, about 30 percent of the exports come
    to the United States, and the remaining 10 percent is split between
    Canada and a few other countries. Part of the reason why the European
    market share is so large is that apparel products qualify for duty-free
    status under Europe's General Scheme of Preferences (GSP) program.
    Unlike the European GSP program, the United States does not provide for
    duty preferences under its own Generalized System of Preferences
    program. Both Europe and the United States are now considering removing
    benefits for Bangladesh under their respective programs. The potential
    impact of revisiting the GSP programs is not yet clear. It could lead
    to companies deciding to stop sourcing in Bangladesh.
        In Bangladesh the majority of the ready-garment industry is located
    in Dhaka and the surrounding areas. The second-largest concentration
    centers around Chittagong, which is the country's major port while the
    rest of the industry are part of export processing zones. Bangladesh
    itself is a very unique country for the building of factories. Since
    the country is mostly swamp land, there is not a lot of available
    stable land which can be used for industrial development purposes.
    While there is some more usable land further outside of Dhaka and
    Chittagong, the access to key infrastructure such as electricity and
    water is very sporadic and unreliable. Companies who decide to build
    outside Dhaka and Chittagong face significantly higher operating costs,
    as they need to typically build their own power and water facilities.
    This is a key reason as to why most manufacturing facilities are built
    in Dhaka and Chittagong.
        Unfortunately the lack of usable land results in many buildings
    being constructed as multipurpose facilities. In addition, a number of
    these buildings are built upon fill. If the fill is not done correctly
    or up to code, it makes the building inherently unstable. One of the
    biggest issues facing the industry is the enforcement of current
    building codes in Bangladesh. The country has a set of codes and
    certificate requirements which have not been enforced as they should
    be. The Rana Plaza building collapse only reinforces the need for the
    enforcement of current codes and an examination of whether the codes
    need to be updated. As has been reported, Rana Plaza was only
    authorized to be a five-story building, yet an additional three floors
    were added to the building. In addition, the building was only zoned as
    a residential/commercial building. It was not meant to be used as an
    industrial complex and certainly not one to house large machines. These
    noncompliance issues all contributed to the horrific collapse of a
    building that was improperly constructed and used for the wrong
    purposes.
        The industry has grown exponentially over the years. While this is
    positive for the overall Bangladesh economy, it also highlighted the
    unfortunate fact that the country was not equipped for this quick
    expansion, especially with the inability of the government to build
    industrial parks and export processing zones to keep up with the
    growing demand.
                             concerns in bangladesh
        The recent tragic events in Bangladesh have highlighted the
    continuing concerns about worker safety at ready-made garment factories
    in the region. In addition to these issues, there are other concerns
    for companies who continue to do business in the country. First and
    foremost is the Bangladeshi Government itself. There are many reports
    about rampant corruption within the government which need to be
    addressed. There are some who are concerned about the number of
    Bangladeshi politicians who are actually factory owners and whether
    that will slow down or prevent the necessary reforms to address worker
    and factory safety. The government has signaled a move to make the
    necessary changes with the recent announcements to convene a panel to
    consider an increase to the country's minimum wage and allowing unions
    to form in factories without the approval of factory owners. In
    addition, the government has promised to submit to the Bangladeshi
    Parliament a legislative reform package in June 2013 that will include
    amendments to Bangladesh's 2006 labor law allowing union representation
    and the right for collective bargaining for all workers in the country
    as well as other changes. Any solution would require the Bangladeshi
    Government to act quickly and swiftly to allow these important changes
    to occur.
        Second, the deficient infrastructure in Bangladesh is another
    concern. Not only with the structural integrity of current buildings,
    but issues with the electricity grid and water availability. Key to
    this is the need to quickly ensure through factory inspections and
    assessments that not only are buildings structurally sound and meet the
    appropriate codes, but that the electrical wiring and systems are also
    up to the appropriate codes and standards.
        In addition to these issues, there are also issues of reliability
    of the overall industry as we see incidences of labor unrest increase
    and other issues with factory owners shutting down factories for
    periods of time. This uncertainty can have a significant negative
    impact on a company's supply chain. All of these factors are elements
    that retailers, brands, and manufacturers are taking into consideration
    as they evaluate their current business relationships in Bangladesh.
                         need for shared responsibility
        As noted earlier, there is a strong need for shared responsibility
    to address the current issues and challenges in Bangladesh. This
    includes the Bangladeshi Government; other governments including those
    of the U.S. and EU; the retailers, brands, and manufacturers who
    contract in Bangladesh; the factory owners including the Bangladesh
    Garment Manufacturers & Exporters Association (BGMEA) and the
    Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA); the
    factory workers; civil society; labor unions; and other international
    institutions.
        The responsibility is shared and not that of the retailers only.
    Further, each stakeholder should have an area of responsibility and
    should not be required to usurp the role of other stakeholders. This
    demarcation of responsibilities in socially responsible supply chain
    management is recognized and highlighted in a March 2011 United Nations
    (U.N.) report titled ``Guiding Principles on Business and Human Rights:
    Implementing the United Nations `Protect, Respect and Remedy'
    Framework.'' The U.N. Human Rights Council endorsed this report by U.N.
    Special Representative John Ruggie in June 2011. In the report,
    Professor Ruggie states: ``The Framework rests on three pillars. The
    first is the State duty to protect against human rights abuses by third
    parties, including business enterprises, through appropriate policies,
    regulation, and adjudication. The second is the corporate
    responsibility to respect human rights, which means that business
    enterprises should act with due diligence to avoid infringing on the
    rights of others and to address adverse impacts with which they are
    involved. The third is the need for greater access by victims to
    effective remedy, both judicial and nonjudicial. Each pillar is an
    essential component in an interrelated and dynamic system of
    preventative and remedial measures: the State duty to protect because
    it lies at the very core of the international human rights regime; the
    corporate responsibility to respect because it is the basic expectation
    society has of business in relation to human rights; and access to
    remedy because even the most concerted efforts cannot prevent all
    abuse.''\1\
        Professor Ruggie further elaborates in the report on one of the
    Foundational Principles ``States must protect against human rights
    abuse within their territory and/or jurisdiction by third parties,
    including business enterprises. This requires taking appropriate steps
    to prevent, investigate, punish and redress such abuse through
    effective policies, legislation, regulations and adjudication.''\2\ It,
    therefore, is the primary function of the Bangladeshi Government to
    promulgate building and fire safety regulations that comply with
    international standards and also enforce such regulations through
    regular and effective government inspections and assessments.
        In addition, the United States and other governments have the
    ability to provide assistance, through training, grants, and other
    avenues to improve the infrastructure as well as worker and building
    safety. The Department of Labor is currently working on a grant to
    provide funds in Bangladesh for training and fire safety. Other
    international institutions could also provide funding to help with the
    training and infrastructure development and corrections to help improve
    the situation in Bangladesh. This could include grants or funds from
    USAID, the World Bank, and others.
        International organizations, such as the International Labor
    Organization (ILO), are also a critical stakeholder that needs to be
    engaged in the process. Specifically programs such as Better Work,
    which is a joint initiative through the ILO and the World Bank's
    International Finance Corporation, are essential to help improve worker
    safety in Bangladesh. The ILO has provided Bangladesh with a set of
    requirements which must be met before Better Work can begin in the
    country. It is imperative these conditions be met as soon as possible
    so that Better Work can begin. According to a representative with
    Better Work, several amendments included in the labor reform package
    which soon will be submitted to Parliament include amendments which
    specifically address some of the Better Work requirements. In addition,
    Better Work has reported that Bangladesh allowed for the registration
    of 23 garment factory unions to date in 2013. In both 2012 and 2011,
    only one union was allowed to register each year.
        Retailers, brands, and manufacturers all realize they have a role
    to play in worker and building safety within Bangladesh as well as
    other countries where they source from. This starts with the
    assessments and inspections to ensure that factories can not only
    manufacture the orders that they are given to the specifics in the
    contract, but that they also meet all of the local health, labor, and
    safety regulations. These companies have instituted corporate social
    responsibility programs which include strict codes of conduct that
    vendors must adhere to. Failure to adhere to the code of conduct or
    specific contract requirements could lead to the termination of a
    contract with the vendor losing business.
        Civil society also plays an important role in helping to develop a
    long-term sustainable solution. These organizations are typically on
    the ground in the country and can provide valuable expertise when
    working in a coordinate effort.
            current initiatives to address worker and factory safety
        A number of different initiatives have been announced to address
    worker and factory safety in Bangladesh. Efforts in the U.S. retail
    industry began well before the Tazreen Design Ltd. factory fire in
    November 2012 to address fire safety issues. Those efforts have become
    even more intense as retailers, brands, and manufacturers continue to
    work in conjunction with their industry associations to finalize a plan
    to address fire and worker safety at factories in Bangladesh. In
    addition, two other competing initiatives were launched. One by the
    German international development agency Deutsche Gesellschaft fur
    Internationale Zusammenarbeit (GIZ), called the ``Fire Safety Alliance
    on Bangladesh,'' and the other by IndustriALL Global Union (which
    represents apparel union affiliates worldwide), Bangladeshi unions and
    some NGOs called the ``Fire and Building Safety MOU'' (the MOU had
    actually been developed in 2010).
        With the objective of combining efforts, the U.S. industry began to
    work with GIZ on their effort. There were also several retailers and
    brands who continued to work with IndustriALL on their MOU. At the end
    of April 2013, after the Rana Plaza building collapse, GIZ hosted a
    meeting with retailers and brands--U.S. and European, IndustriALL and
    other campaigning NGOs to finalize an Action Plan for fire and building
    safety in Bangladesh. At this meeting, IndustriALL and the campaigning
    NGOs proposed their own set of Principles. A good faith effort was made
    to attempt to merge the GIZ Action Plan with the IndustriALL Principles
    by a deadline of May 15, but this did not succeed. IndustriALL
    unilaterally announced May 12 that it would rename its MOU the ``Accord
    on Fire and Building Safety in Bangladesh'' and provided companies 2
    days to sign onto the ``Accord'' before they released it. The Accord
    requires a 5-year commitment from participating retailers to conduct
    independent safety inspections of factories, and pay up to $500,000 per
    year toward operational costs. As noted, many European retailers and
    brands signed onto the Accord before it was released, while only three
    U.S. retailers have signed on.
        As an industry, U.S. retailers work with their vendors throughout
    their supply chains seeking to establish safe working conditions. While
    U.S. retailers share IndustriALL's goal to improve worker safety in
    Bangladesh and to make tangible progress on the ground, U.S. retailers
    cannot in good conscience sign the Accord because the current language
    presents potentially unlimited legal liability given its vague and
    ambiguous terms. There are also concerns that the Accord removes the
    responsibility of the Bangladeshi Government for inherent government
    functions, such as building inspections.
        Many companies believe that the IndustriALL Accord should not be
    viewed as the sole response and solution to the situation in
    Bangladesh. In the meantime, these retailers, brands, and manufacturers
    have come together in an alliance to develop a single, unified action
    plan that will achieve immediate, sustainable, effective and long-
    lasting change for the garment industry and its workers in Bangladesh.
    The alliance also includes representatives from the Retail Council of
    Canada, the Canadian Apparel Federation and their members. The action
    plan builds upon the extensive work already being conducted by many of
    these retailers on the ground today. These actions include a focus on
    (1) worker training and empowerment; (2) standards for fire and
    building safety assessments; (3) sharing of factory inspection and
    training information; (4) governance; and (5) funding. This work is now
    occurring with the help of the Bipartisan Policy Center (BPC), under
    the guidance of former U.S. Senate Majority Leader George Mitchell and
    former U.S. Senator Olympia Snowe.\3\ They have announced a plan will
    be finalized and released by July 2013.
        In addition, some companies have announced their own efforts in
    Bangladesh which will be wrapped into this unified effort. For example,
    since last October, Gap Inc. has been on the ground in Bangladesh with
    the Gap Inc. Fire and Building Safety Plan. The Gap Inc. plan includes
    the appointment of a Chief Fire Safety Inspector and dedicated fire
    safety team, access up to $20 million in accelerated capital for
    vendors to make fire safety improvements and $2 million in financial
    assistance for Bangladeshi workers displaced due to fire safety
    remediation improvements. Gap Inc. hired Randy Tucker, P.E, a fire
    safety professional with more than four decades of experience in the
    developing world. Mr. Tucker and his team have been on the ground every
    month since the launch of the program to conduct inspections across the
    company's 73 approved third-party garment manufacturing factories in
    Bangladesh. As a result, 20 percent of the factories have been
    inspected, and many of them have already begun to make the recommended
    improvements.
        It has also been reported that Walmart would begin conducting
    detailed safety inspections at every one of the 279 factories it uses
    in Bangladesh. The company said it would complete all reviews within 6
    months and will publicly release the names and inspection information
    on all of the factories. It also started posting on its Web site the
    list of failed factories in Bangladesh that are no longer allowed to
    produce for Walmart. The company is also increasing the pace and
    frequency of follow up inspections in all Bangladesh factories, with
    visits taking place every 2 months to ensure both compliance and
    progress. Finally, Walmart announced that it would hire Bureau Veritas
    to provide fire safety training to every worker in all 279 Bangladeshi
    factories, and contribute $600,000 to Labor Voices to communicate with
    workers about concerns inside the factories. Labor Voices provides a
    channel for garment workers to raise their concerns through real-time,
    anonymized worker feedback.
        Some of these action steps by the retail industry actually go
    beyond what has been proposed in the Accord to date.
                         legal issues for consideration
        Again, while retailers, brands, and manufacturers share the goals
    of improving industrial health and safety of Bangladeshi factory
    workers, the legal issues raised by these companies regarding the
    Accord are significant and need full consideration. Finding a workable
    and sustainable program to improve the health and safety of Bangladeshi
    garment workers is complex, requires careful consideration and a
    systemwide solution. An attempt at a ``quick fix'' may satisfy the
    immediate desire to be seen to be doing something, but might not render
    the long-term sustainable solutions needed to permanently fix the
    problems/challenges to ensure worker safety.
        There are numerous concerns about the Accord. Overall, the Accord
    creates legal enforceable obligations, but what is enforceable is vague
    and uncertain. The obligations are described in broad vague terms and
    it is left to arbitration to resolve disputes. In principle,
    arbitration as a dispute resolution mechanism is acceptable, but not
    basically to rewrite or define terms of the Accord that have not been
    agreed upon.
        Second, the Accord shifts some of the basic government regulatory
    functions, such as inspections, onto the retailers. While the U.S.
    retailers are prepared to contribute in a variety of ways to improving
    worker and building safety standards in Bangladesh, the primary
    regulatory and enforcement function of such standards remains under the
    auspices of the Bangladeshi Government. The Accord creates a free-
    standing Safety Inspector with broad powers to gain access to factories
    and order remedial action. At the same time, after the high-level
    mission by the ILO of early May 2013, the Bangladeshi Government
    committed to recruit and train by the end of October 2013 an additional
    200 inspectors for its Department of the Chief Inspectorate of
    Factories. Creating a parallel free-standing safety inspectorate means
    establishing a duplicate enforcement bureaucracy and the Bangladeshi
    Government potentially abdicating its primary function of enforcing
    building regulations and workplace health and safety codes. Privatizing
    an inherently government function, such as building inspections, as the
    Accord envisages, is therefore not the right approach to building the
    capacity, know-how and trained inspectors required by the Bangladeshi
    Government to fulfill its role in ensuring safe workplaces for
    Bangladeshi workers. While industry and other stakeholders are part of
    this solution, the focus should be placed on providing the government
    the ability to carry out its core responsibility to protect its
    citizens, not supplanting that government function.
        Third, there are also concerns that the Accord unduly shifts the
    responsibility on signatory retailers to essentially establish an
    independent employment relationship with the employees of their
    suppliers. In the section dealing with ``Remediation,'' signatory
    retailers will not only be responsible for factory owners maintaining
    the employment relationship and paying wages during a factory closing
    for structural improvements/renovations, but also finding the employees
    alternative jobs if they are terminated. These broad obligations
    imposed on the signatory retailers have potential expanded legal and
    financial obligations for the signatory retailers. Since the demise of
    the Alien Torts Act to impute liability on U.S. corporations for the
    ills of foreign actors, various attempts have been made to impose
    liability on U.S corporations under a variety of contracts. These
    potential and unforeseen legal and financial obligations that a vaguely
    drafted Accord might hold for signatory retailers are of real concern.
        Last, the Accord effectively allows for a third-party arbitrator to
    determine the price of garments produced in a facility, if the factory
    claims the price paid by retailers should be higher to fund the health
    and safety upgrades that factories make to comply with corrective
    actions by the Safety Inspector. The Accord requires signatory
    retailers to ``negotiate commercial terms'' with the factories ``which
    [would] ensure that it is financially feasible for the factories to
    maintain safe workplaces and comply with upgrade and remediation
    requirements instituted by the Safety Inspector.'' A dispute about the
    adequacy of the commercial terms, including the purchase price of the
    garments, would be subject to arbitration under the Accord.
                                   conclusion
        Collaboration is an essential component of efforts to improve
    worker and factory safety in Bangladesh. The joint efforts of all
    stakeholders are essential to identify viable solutions and implement a
    successful and sustainable plan of corrective action that addresses the
    systemwide challenges in Bangladesh. A solution must address
    eradicating corruption, improving the quality of building construction,
    the location of factories, the issuing of building use permits, the
    enforcement of building and safety codes, the ability of garment
    workers to raise concerns free of retaliation, etc. While many would
    prefer a single coordinated effort, there should be flexibility to
    allow companies the ability to quickly deal with issues within their
    own supply chains.
        The U.S. retail industry shares the common objective of preventing
    future workplace injuries and deaths of Bangladeshi garment workers.
    The industry is prepared and working swiftly toward making a
    substantial contribution to achieving results on the short term and the
    long term.
        Thank you for the opportunity to testify at this important hearing
    today.

    ----------------
    End Notes

        \1\ Report of the Special Representative of the Secretary General
    on the issue of human rights and transnational corporations and other
    business enterprises, John Ruggie Guiding Principles on Business and
    Human Rights: Implementing the United Nations ``Protect, Respect and
    Remedy'' Framework , page 4, March 2011.
        \2\ Report pages 6-9.
        \3\ ``U.S. Retailers Announce New Factory Safety Plan,'' The New
    York Times, May 30, 2013.

        Senator Kaine. Thank you, Mr. Lubbe.
        Questions. This is an issue that we have to wrestle with in
    terms of leverage, what is our leverage over a situation. We do
    not have command and control of Bangladeshi regulations,
    culture of corruption, building codes, but we do have leverage.
        Ms. Drake, your organization filed a--one of the bits of
    leverage we have is this GSP status, and your organization
    filed with the USTR a request to either withdraw or limit GSP
    in 2007. If you would just describe the basis for that original
    complaint that was filed 6 years ago. Was it all about
    restrictions of workers' rights, or did it also make the
    connection to unsafe working conditions?
        Ms. Drake. It definitely made the connection to unsafe
    working conditions. In the GSP statute, it outlines
    internationally recognized worker rights as including freedom
    of association, collective bargaining, freedom from forced
    labor and child labor, and acceptable conditions of work, which
    were then defined to include worker health and safety, minimum
    wages, and maximum hours of work.
        So there have always been problems regarding freedom of
    association and the right to collective bargaining. Likewise,
    there have always been problems on health and safety. So that
    petition included all those things, and also complaints about
    violence against workers and other forms of threats and
    repression where workers have been physically assaulted. And,
    as was discussed earlier in the hearing, in the 6 years that
    that petition has been open, it has continued with the murder
    of labor organizer, Aminul Islam.
        Senator Kaine. You and your colleagues must have had a sick
    feeling when the building collapsed and the news came across
    the wire, given the fact that you have raised this issue as a
    potential concern that many years ago.
        Ms. Drake. Absolutely. I mean, this is our challenge here.
    Earlier it was said that somebody had received assurances from
    the Government of Bangladesh. Well, for the workers of
    Bangladesh, receiving assurances from their own government is
    not very reassuring. I mean, even before the Tazreen fire,
    there was another incident at Garib & Garib a couple of years
    before that, and that was supposed to be the turning point. And
    before that there were safety incidents, fires, building
    collapses, a flurry of them in 2005 and 2006, and those were
    supposed to be turning points where things would change.
        As somebody mentioned before, what is the body count that
    you need to really make changes? In our opinion, one is too
    many. We are well beyond whatever anyone would need to see as
    evidence that the current system of the government's very
    feeble efforts and the voluntary compliance programs of the
    corporations simply are not working and it really is time to
    act and make this the final turning point.
        Senator Kaine. Let me ask this question, and I will address
    it first to you, Ms. Drake. But then, Mr. Lubbe, I would like
    to segue and have you answer the same question. I have a couple
    of others.
        Senator McCain asked a question which is a good one and we
    would wrestle with it, whether the withdrawal of GSP status
    would help or would hurt. Now, we talked about that you could
    lay down conditions and say meet these conditions or we will
    withdraw. We heard testimony that nations that have had GSP
    status withdrawn have worked hard to get it back because they
    wanted that status.
        But I would like you first, Ms. Drake, and then Mr. Lubbe,
    to address this question about whether if there is a
    recommendation to the President to withdraw GSP status, would
    that do more good or more harm?
        Ms. Drake. It is a tough question to wrestle with, but the
    AFL-CIO falls squarely on the side that acting on the GSP
    petition to limit or withdraw benefits will do far more good
    than it will harm.
        The concern about mass unemployment is simply unfounded.
    Given that the GSP products comprise about 1 percent of
    Bangladesh's exports to the United States--this was discussed
    in the earlier panel--we are talking about a much smaller
    segment of the economy. The ready-made garment sector, which is
    what we have been talking about primarily today, does not get
    GSP benefits. So it would not be affected by tariff changes.
        I do have a list of what those products are that get GSP
    benefits, and the top three are tobacco, for instance. So it
    really is a product-by-product issue. You would have to look
    at, well, what is the demand elasticity for tobacco, and are
    Bangladesh's tobacco exports really going to be prohibited by
    putting a tariff, that kind of question.
        But more importantly, that sort of frames the question, as
    I said earlier, as the wrong question. Is it really a choice of
    no jobs or these really terrible jobs with awful conditions and
    no rights? There is something in between, and it requires
    government action. The government can actually fulfill the
    promises that it has been making, and we think there is every
    reason to expect that they would. Even though the GSP benefits
    are small in monetary value, they have reputational concerns,
    and they are also tied to future investments under the OPIC,
    the Overseas Private Investment Corporation. There are several
    of those programs right now in Bangladesh. Those would not be
    threatened at all by a change in the GSP status, but future
    OPIC investments could not occur until the GSP status would
    come back.
        So there are reasons to believe that Bangladesh will act
    like other countries that have had limitations on their GSP and
    really make changes and fight hard to improve their brand and
    get the benefits back.
        Senator Kaine. Great. Thanks, Ms. Drake.
        Mr. Lubbe, the same question. What effect, thinking about
    the GSP, would withdrawal of the status do more harm or be more
    helpful?
        Mr. Lubbe. Senator Kaine, that is a good question, and I
    think it is a complex one, as Ms. Drake has pointed out. The
    industry wants to support the Bangladeshi garment industry. But
    on the same hand, it also wants to ensure that there is an
    incentive to the Bangladeshi Government as a very important
    stakeholder to fulfill its promises. Whether the withdrawal of
    the GSP status will achieve that has to be evaluated within the
    context of all those factors.
        You heard earlier this morning, and Ms. Drake also referred
    to how complex the system is, its impact. Withdrawal of the GSP
    status might send the reputational signal that the U.S.
    Government is serious. But, I think, that needs to be evaluated
    in the context of all those factors.
        The industry will support what the U.S. Government does
    here. The industry is concerned about potential unemployment
    among Bangladeshi garment factory workers. We do not know what
    the true impact will be on unemployment and whether Bangladeshi
    factory owners will use that as an excuse to shed employees. So
    it needs to be very carefully considered.
        Senator Kaine. Mr. Lubbe, you talked in your testimony
    about the reason that Canadian and American apparel
    manufacturers and companies have chosen not to sign the Accord
    but are pursuing a combined effort. Beginning with the Accord,
    what was the subject of some of the provisions? You indicated
    there could be potential liability or there was vague language.
    But what was the subject of some of the provisions that the
    American and Canadian firms found problematic? I am assuming
    there were some that were fine, but then some were somewhat
    controversial. If you could just describe those?
        Mr. Lubbe. Sure. Senator, the first point is the
    utilization of arbitration. What the Accord does is it uses
    arbitration really to fill in and write the agreement for the
    parties, ultimately. It provides for a wide array of disputes,
    as it is worded, not only between the parties but, I think from
    a legal analysis, leaves the room for nonparties to the Accord
    to utilize the Accord to declare disputes that go to
    arbitration.
        Arbitration under the Accord takes on in many instances an
    interest arbitration nature, meaning you get a third party to
    really write the agreement for the parties on terms that they
    could not agree upon. So that is the first point.
        The second issue is, as a binding contract, it becomes a
    basis for litigation in the United States, and we have examples
    where, with the demise of the Alien Tort Act, a variety of
    contracts and agreements have been used to sue companies in the
    United States for the bad acts of actors outside the United
    States, and that is a real concern. The Accord does not exclude
    that. That possibility of similar litigation exists.
        The third issue, just in terms of broad scope, is also
    again through the avenue of interest arbitration. If you review
    the provisions that deal with remediation, they require the
    signatories must engage in commercial viable agreements, and if
    the supplier or the factory owner says, ``well, the price that
    we are negotiating is insufficient because I need more money to
    improve health and safety at the factory'' and, let us say, for
    example, the U.S. retailer says, ``I do not think at the price
    that you are asking, that is too high,'' it potentially goes to
    interest arbitration again.
        So you have price determination through interest
    arbitration. Those are some of the critical issues I think that
    were raised. If I may, in the April meeting in Germany, these
    issues were indeed raised, I am told. I was not at that
    meeting, but that is the feedback that I have.
        So there was a serious attempt at that stage to iron out
    these concerns. As frequently happens in negotiations and
    collective bargaining, a line was drawn, and the IndustriALL
    took the position that they were not going to make these
    changes. The Accord was then published, and the retail
    industry, the garment and apparel industry still maintained
    those concerns because they have not been addressed.
        Senator Kaine. And just since this is an industry
    internationally that I have no expertise in, even with the
    concerns that you laid out, a sizable number of the European
    manufacturers signed on to the Accord. Describe why that is the
    case. Why would European manufacturers find it to be acceptable
    but North American manufacturers or companies find it to be
    less acceptable?
        Mr. Lubbe. Senator, you would appreciate that I cannot
    speculate exactly how they view their risk. My opinion is that
    they are not in the same litigious environment that we are. We
    have a history under statutes that have created the fora to sue
    in the United States for foreign bad acts. As far as I know,
    the Europeans do not have that same system.
        A second explanation could be the Europeans have a much
    more institutionalized partnership relationship with trade
    unions, where our model here is different. Through the use of
    works councils, European works councils, this type of
    agreements with unions is not uncommon in general that will
    cover Europeanwide issues.
        So those are two of the explanations that I can offer to
    you. I think the first one in terms of litigation risk and
    liability is a significant one that is absent from that market.
        Senator Kaine. Mr. Lubbe, one question I have is, Are North
    American and specifically American companies--and this picks up
    on your last point--even just based upon other activities in
    this building, the deadlock over things like NLRB appointments,
    do they balk at the notion of signing on to accords that
    encourage organization and association rights of workers in
    Bangladesh?
        Mr. Lubbe. Senator, as far as I know, that was not a
    stumbling block.
        Senator Kaine. Let me ask you finally, and then Senator
    Menendez is back and will resume the chair, but you talked
    about the effort underway in Canadian and American companies to
    find a workable framework going forward. Talk to me a little
    bit about the timing of that effort and when we might be
    expected to know something about it.
        Mr. Lubbe. Senator, this is a work in progress that is
    receiving high priority in the industry. As has been reported,
    the stated goal is to come with a comprehensive plan that will
    have immediate action plans that will provide for long-term
    solutions and have that plan ready by, I understand, early
    July.
        I also understand that, in terms of the actions that have
    been taken, there is already a structure set up through working
    groups to look at various aspects. Everybody is struggling in
    terms of how to prioritize. This is a huge issue, so sometimes
    how do you prioritize what is also an issue. That is all being
    discussed, and there are very regular meetings scheduled
    throughout this month for all the parties to coalesce around
    this and come up with a plan that will work for the industry at
    large, and also get the individual major players involved in
    this effort.
        Senator Kaine. So just in terms of the testimony, Mr.
    Chair, to summarize some testimony that occurred, I think when
    you were out of the room, there is a coincidence of timing
    here, the potential of a recommendation from USTR to the White
    House at the end of June. Now, that is not the same as when the
    President would make a decision, but also a potential decision
    by the North American companies about how they would want to
    proceed to address this problem from the private-sector side in
    early July. So it sounds like in both the governmental and
    private-sector side, it is a little bit of a work in progress,
    and it would be my hope that we would be able to come back
    after those steps are known to consider them and hear pros and
    cons about whether they are sufficient.
        Mr. Chair, with that, I would return the chair to you.
        The Chairman [presiding]. Well, thank you very much. Thank
    you, Senator Kaine, for chairing this important part of the
    hearing.
        Thank you both for your testimony. I have read through it.
        Please help me pronounce your last name. I want to make
    sure to get it right.
        Mr. Lubbe. Senator, it is Lubbe.
        The Chairman. Lubbe.
        Mr. Lubbe. That is correct.
        The Chairman. OK, Mr. Lubbe. I know that you are an
    attorney and you are representing these different industries,
    so I get your role here. But since they sent you as the person,
    let me ask you a couple of questions.
        Number one is, what do the companies that you represent
    believe is their core responsibility in regard to the topic
    that we are talking about?
        Mr. Lubbe. Senator, I think I can best summarize it as
    follows. The issue of corporate social responsibility has taken
    a focus on health and safety of the workers in Bangladesh, and
    that has been catapulted to the top of the list of priorities.
    If you look at companies' corporate social responsibility, it
    has always been over the years, since it has become important
    for companies to recognize and play their role, it has been a
    work in progress. It is a continuing effort of improving.
        What has happened now with these very tragic events in
    Bangladesh is that health and safety, including structural
    soundness of buildings in which their suppliers are operating,
    has come to the forefront. And in that respect, the industry
    understands and wants to play an important role to contribute
    as one of the stakeholders to make certain that that issue is
    addressed. The industry sees itself as one of the stakeholders
    and one of the role players, and it is ready and willing to
    play that role.
        Specifically, the issue of inspections, a number of the
    industry individual companies have stepped up their health and
    safety inspections to make certain that within their scope of
    influence, the providers and suppliers within their global
    supply chain, that they make certain that they accelerate and
    increase those inspections. There has been an increased focus
    on training of workers so that they can help identify the
    shortcomings in health and safety and building structure.
        There is an awareness that there needs to be support to
    employees, workers in Bangladesh, that have been adversely
    impacted by these recent events, be it by loss of a job or
    injury.
        There is a recognition of a contribution to assist the
    factory owners to remedy the health and safety shortcomings in
    their factories.
        And so the role is one of support, providing funding,
    providing training, making certain that competent folks,
    inspectors, are available now while the Bangladeshi Government
    is ramping up its own inspectorate to make certain that
    somebody on the ground immediately does something to review
    health and safety.
        The Chairman. I ask you that question because in reading
    your testimony in which you put a great emphasis on the U.N.
    report entitled ``Guiding Principles on Business and Human
    Rights,'' you referred to the responsibilities there that the
    second is the corporate responsibility to respect human rights,
    which means that business enterprises should act with due
    diligence to avoid infringing on the rights of others and to
    address adverse impacts with which they are involved.
        Now, of course, one can ultimately respect human rights but
    do nothing about it. So, at the end of the day, I get concerned
    when I hear about the industry's unwillingness to join a more
    global standard so that, regardless of whether it is Bangladesh
    today or some other place tomorrow, we have a global standard,
    that we do not have a race to the bottom. I think Rana Plaza
    shows the limits of individual corporate responsibility
    campaigns because multiple brands very often source from the
    same factory.
        So you have a serious free rider problem if different
    retailers are approaching standards differently, and that leads
    some to say, well, unless it is everybody else, I am not going
    to live to a higher standard unless they have a corporate ethos
    that says I want to live to a higher standard, even though it
    may make me somewhat less competitive than the others.
        So I read your comments about liability, and I hope that
    the industry understands that, while I understand their need to
    protect themselves legally, there can be no success at the end
    of the day, no one will want to wear a piece of clothing made
    in Bangladesh if it is on the blood of workers. Those brands
    will go down the tube. It is only a question of time; only a
    question of time.
        So I hope the industry gets their act together, and sooner
    rather than later, because it has been willing--these are not
    all of a sudden. Rana Plaza is only a dramatization,
    unfortunately, of a great tragedy, but it is not because this
    has not existed. The fact that there have been, pending USTR,
    and I just finished with the USTR nominee upstairs--the fact
    that that has been languishing for 6 years gives us an example
    of how everybody turns a blind eye until something happens.
        I can assure you, something is going to happen here. And as
    I have told industries before in good faith, either get your
    act together and establish standards or find yourself with
    standards you may not care for. I hope that is the message that
    you will take back to the industry today.
        Mr. Lubbe. Senator, thank you for those comments. I think
    that you are spot on. It has become an extremely important
    issue for all stakeholders, including the industry, and they
    will take those comments of yours to heart.
        The Chairman. Ms. Drake, I do not have any questions for
    you simply because I largely agree with your testimony. But if
    in the last few seconds here you have heard anything that you
    want to have a view for the record espoused, I am happy to give
    you this opportunity.
        Ms. Drake. Thank you so much, Mr. Chairman. I appreciate
    that.
        I found it interesting--if we take the industry at its word
    that its corporate social responsibility focus right now on
    health and safety is a priority, these firms, or many of them,
    Walmart in particular, has been operating in Bangladesh since
    the 1990s. Mr. Lubbe mentioned the many systemic problems that
    the firms are aware of in Bangladesh, whether it is factories
    being built on unstable ground, whether it is an inconsistent
    electricity supply or water supply. And these problems, as I
    testified to earlier, and the history of building collapses,
    fire collapses, it did not start with Tazreen. It goes back
    many, many years.
        So if they have known about this, and if they care about
    this, there is a true disconnect. Is it one of these situations
    where doing the same thing over and over again and expecting a
    different result is not a prime example of corporate
    management?
        We have a report from the AFL-CIO. I cited it in my
    testimony, and there is a link, but I can leave copies here
    today for Mr. Kaine and Mr. Menendez, if you would like to have
    these. It explains that these voluntary programs that can be
    eliminated at any moment, as soon as the brands think that the
    spotlight is off of them or that they have already contributed
    enough money to factory safety or whatever it is, they simply
    do not work. If a social auditor comes in to a factory like
    Rana Plaza and finds that it is, in fact, unstable, the workers
    in the voluntary programs are never notified. They are not part
    of the system.
        If you want to talk about unilateral, the Accord, we
    disagree strongly with the statement that IndustriALL set it
    out unilaterally. The Accord was being negotiated for more than
    a year, and various brands had taken a look, American brands.
    Walmart and Gap were there at the beginning and chose not to
    deal with it in 2012, and they chose not to deal with it again.
    But it was, in our view, a true negotiation and very different
    than these plans, and that is what we are really afraid of, is
    that this new alternative plan with the Bipartisan Policy
    Center, it sounds good, but if it ends up with more of these
    corporate-directed socially responsible but not giving workers
    the power to speak up for themselves and be monitors of their
    own health and safety, it is simply not going to work.
        And if, in fact, it somehow does create a standard that is
    binding and enforceable, that is terrific. But then you have
    workers who in the morning are working for Walmart and in the
    afternoon are working for HNM, and they have to remember which
    is the standard and what applies and what they can speak up
    about and what they are not allowed to speak up about. That is
    not really a helpful situation when you are talking about 4
    million workers who are impoverished, many of whom are
    illiterate, and they have to keep track of what their rights
    are.
        And I also wanted to point out the irony that firms are
    concerned about arbitration under the Accord, and this might be
    the only time where you get a witness from the business side
    that does not want arbitration and a witness from the labor
    side that says, no, we would like to have arbitration here.
        So we think that the Accord--we have read it. It does not
    create a cause of action in U.S. courts. The Civil Rights Act,
    the Americans With Disabilities Act, the Age Discrimination in
    Employment Act, these create causes of action in American
    courts. It does not. It is not vague. There are things that are
    going to be worked out during this implementation period. But
    with the recent decision on the Alien Tort Claims Act, we just
    do not view it as really being a threat to these brands, and
    neither, in fact, do Abercrombie & Fitch and Sean John and PVH,
    and HNM, which is the European company that operates in the
    United States, or these other companies that have signed it.
        We would really appreciate your support for it and just
    continue to ask you to help us in our efforts to push these
    brands to sign because, as you have said, they will be the
    reputational losers if they do not. Thank you so much.
        The Chairman. Well, thank you. You have made ample use of
    the opportunity I gave you.
        So with that, let me turn to Senator Kaine. And I am going
    to ask, Senator Kaine, if you would close out the hearing
    because I have a meeting. We will keep the record open until
    Friday for questions, and my thanks to both of you. I look
    forward to working with both of you as we move forward.
        Thank you.
        Senator Kaine [presiding]. Thank you, Mr. Chair.
        Just one last question, Ms. Drake. I asked Mr. Lubbe
    whether the decision by North American companies to not sign on
    with the Accord, what were some of the reasons, and he said he
    was speculating to some degree, but one of the things he
    mentioned as a sort of speculative comment was the differing
    comfort levels of European companies in their relationship with
    labor compared to the cultural norm here. And I am just struck
    by that as an issue, and I wanted to ask you your opinion about
    it.
        We are in the midst of a major debate here where there is
    an effort to block appointments to the National Labor Relations
    Board, or to try to find an accord that would allow four out of
    five NLRB members to be appointed so there could be a permanent
    stalemate against the NLRB doing their job. That effort is
    supported by major spokespeople and organizations for broad
    American corporations, like the U.S. Chamber of Commerce.
        Is it your perception in the reaction of North American
    companies to the Accord that arbitration is a point of dispute,
    but that there is a reticence to sign on to an accord that
    encourages labor organizations to form and flourish because
    they are actually, on our own turf, very reticent about labor
    organizations and the right to organize and flourish?
        Ms. Drake. I would say that is the conclusion that one
    would draw from the evidence, and it really is unfortunate that
    the President put up a slate of nominees that represent all
    sides of the issue on labor and that it is being blocked. If
    the United States does not have a functioning National Labor
    Relations Board, that goes all the way down to the site, the
    small-factory level, and will prevent probably most organizing
    efforts from succeeding in the United States because the
    employer side will stop the election, put in a complaint, the
    complaint cannot be decisively resolved, and things will not
    move ahead.
        So it is a very aggressive antiworker stance to not want to
    have a National Labor Relations Board at all.
        Senator Kaine. And with respect to the Accord in
    particular, since I am not familiar with the substance of the
    Accord, does the Accord only address sort of building code
    safety conditions, or does the Accord also address the ability
    of workers to associate and organize in a protected status?
        Ms. Drake. It does, and it particularly gives workers the
    right to refuse to enter and work in a workplace that they feel
    is an immediate threat to their health and safety. Having to
    respect worker rights and having to recognize that workers can
    stand up for themselves and say I am not going to go into that
    death trap today I think is, for some in the industry, they do
    not want workers to have that ability to stand up and speak up
    for themselves to improve their own working conditions and
    their livelihoods.
        Senator Kaine. And so this is a speculative question, but
    take it for what it is worth. If the Accord had just had
    conditions within it about building code and fire safety and
    things like that, but had not had any conditions dealing with
    the protection of workers' rights, is it your opinion that it
    would have been more acceptable to the North American garment
    companies?
        Ms. Drake. I cannot say whether they would have signed. I
    would say I think it would be much more acceptable.
        Senator Kaine. All right. Well, this has been fascinating
    testimony on a very, very challenging topic, and I think both
    of you acknowledge that there is a significant complexity. I do
    think we are maybe on the verge, with the USTR recommendation
    to the White House and the industry effort to come together
    behind some set of principles that they could agree with, both
    of those happening in relatively short order, that we are on
    the verge of being able to come back and say, OK, now that we
    have some more facts on the table about what the response is
    likely to be from the private sector and the U.S. Government,
    it would probably be helpful for us to analyze that again soon.
        I am the junior member on a 19-member committee, but I will
    certainly recommend to the chair that we come back and follow
    up on both of those matters in short order.
        And with that, the committee hearing is adjourned. Thank
    you for your participation.
        [Whereupon, at 12:56 p.m., the hearing was adjourned.]
                                  ----------

                  Additional Material Submitted for the Record

               Response of Lewis Karesh to Question Submitted by
                          Senator Robert P. Casey, Jr.

        Question. As you stated in your written testimony, the United
    States is a key market for Bangladeshi goods, importing $5 billion in
    2012.

       What signal would suspension or termination of Generalized
            System of Preferences (GSP) benefits send to the government and
            factory owners in Bangladesh as well as U.S. brands and
            consumers? Is this an effective tool?
       Why has it taken the U.S. Government 6 years to review
            Bangladesh's GSP eligibility, following acceptance of the AFL-
            CIO's petition in 2007?

        Answer. On June 27, 2013, President Obama decided to suspend GSP
    trade benefits for Bangladesh based on a determination that Bangladesh
    ``has not taken or is not taking steps to afford internationally
    recognized worker rights to workers in the country.'' The
    administration hopes that the GSP action will give further impetus to
    the Government of Bangladesh's efforts to address longstanding issues
    related to worker rights and worker safety.
        The experience of the last 30 years suggests that GSP can be an
    effective mechanism for advancing worker rights. Over the years, the
    U.S. Government has used GSP reviews of worker rights with many
    beneficiary countries to bolster our dialogue with these countries on
    worker rights and effect meaningful change.
        One of the objectives of a GSP worker rights review is to encourage
    the relevant country to undertake measures to address the key concerns
    that led to the review. Over the last several years, the U.S.
    Government worked with the Government of Bangladesh to identify such
    measures and to urge that these measures be implemented. In late 2012,
    the administration came to the conclusion that the worker rights
    situation in Bangladesh had deteriorated and that suspension of
    benefits might be warranted absent significant near-term progress in
    improving worker rights and worker safety. While the Government of
    Bangladesh has taken some actions to address the situation, the
    progress was insufficient to meet the statutory criterion to continue
    its GSP benefits.
                                     ______

          Responses of Assistant Secretary Robert Blake to Questions
                   Submitted by Senator Robert P. Casey, Jr.

        Question. Do you assess that the Government of Bangladesh has the
    capacity and will to enforce its labor standards and building codes?
    What is the U.S. Government doing to assist the Government of
    Bangladesh to fight corruption and improve enforcement capacity in this
    sector?

        Answer. The recent tragedies in Bangladesh underscore the urgent
    need for the Government of Bangladesh, factory owners, international
    buyers, and workers to come together to strengthen respect for workers'
    rights and ensure safe and healthy working conditions. We are
    encouraged by recent initial efforts on the part of the Government the
    Bangladesh and the Bangladeshi exporters' associations to improve labor
    standards and inspect and enforce the fire and building codes. We are
    encouraging the Bangladeshi Government to take additional steps to
    improve worker rights, including the right to freely associate and
    engage in collective bargaining, so workers can effectively negotiate
    improved working conditions and wages.
        We actively engage with the highest levels of the Government of
    Bangladesh, factory owners, international buyers, and civil society on
    these issues. We are already supporting capacity-building for trade
    unions in Bangladesh and help fund International Labor Organization
    (ILO) programs targeting the garment and shrimp sectors. The Department
    of Labor is currently seeking project proposals to improve fire and
    building safety in the garment industry in Bangladesh. The United
    States strongly supports Bangladesh's tripartite national action plan
    on fire safety, and the joint statement by tripartite partners issued
    at the end of the ILO's high-level mission on May 4. The U.S.
    Government is also discussing a joint effort with the European Union,
    the Government of Bangladesh, and the International Labor Organization
    to assist Bangladesh in bringing working conditions and respect for
    workers' rights in the garment sector in Bangladesh in line with
    international labor standards.

        Question. I am concerned that proceedings before the International
    Crimes Tribunal in Dhaka, Bangladesh, have provoked violent protests
    and created a volatile political situation in the country. While the
    U.S. Government should fully support the prosecution of the most
    serious crimes of international concern and the ending of impunity, we
    should also ensure that criminal justice is carried out in a manner
    that is consistent with international human rights obligations,
    including procedure, fairness, and transparency.

       Do you assess that the ICT trials meet international
            standards of procedure, fairness, and transparency?
       What are the U.S. Government and the international community
            doing to ensure that witnesses are protected from retaliation?
       What is the status of Shukho Ranjan Bali, a prosecution
            witness who was allegedly abducted before he could testify?
       What is your assessment of how the confirmation of death
            sentences and the expected issuance of additional verdicts will
            affect the political situation in the country?

        Answer. The United States supports bringing to justice those who
    committed atrocities during Bangladesh's Liberation War. We believe
    that any such trials must be free, fair, and transparent, and in
    accordance with international obligations. Bangladesh has agreed to
    uphold these requirements through its ratification of international
    agreements, including the International Covenant on Civil and Political
    Rights. As Bangladesh addresses the legacy of atrocities committed
    during the Liberation War, and as we await further verdicts by the
    Bangladesh International Crimes Tribunal (ICT), the United States
    continues to urge the Government of Bangladesh to adhere to its treaty
    obligations, including through a fair and public hearing by a
    competent, independent, and impartial tribunal, and by fully respecting
    the rule of law. Although we have seen some progress, there remain
    significant concerns regarding the law, rules, and procedures used by
    the tribunals and we believe that further improvements to the ICT
    process are needed to ensure these proceedings meet international
    standards. The Shukho Ranjan Bali situation directly relates to our
    concerns about adequate protection for witnesses in Tribunal
    proceedings. Although the Government of Bangladesh has denied any role
    in his alleged abduction, we continue to encourage the government to
    ensure the safety of all its citizens, including trial witnesses. Human
    Rights Watch has called for the Government of Bangladesh to conduct a
    credible investigation into the alleged abduction.

        Question. On May 5-6, 2013, protests led by Hefazat-e-Islam
    resulted in numerous deaths. Both Amnesty International and Human
    Rights Watch have called for independent investigations into the
    deaths.

       Will the State Department also call for an investigation?

        Answer. The Government of Bangladesh gave permission to Hefazat to
    demonstrate peacefully. However, upon close review of the evidence, it
    appears that Hefazat violated these terms through clashes with police,
    violence, and looting. To prevent further violence, the Government
    dispersed the protestors. Independent sources estimate the number of
    dead closer to 12, far fewer than the hundreds alleged. Nonetheless, we
    have consistently counseled the Government to use nonlethal methods of
    crowd control and have expressed our concern about the recent rise in
    violence in Bangladesh in the wake of a series of general strikes
    (hartals) that have significantly disrupted and endangered the daily
    lives of Bangladeshis throughout the country. These disruptions incur
    direct costs on Bangladeshis, including by preventing ordinary citizens
    from doing their jobs, and end up hurting the Bangladeshi economy. The
    Embassy continues to closely engage with all parties to urge calm,
    encourage dialogue, and ensure that protests are peaceful. Freedom of
    expression is one of the hallmarks of a democracy, and we encourage all
    Bangladeshis to peacefully express their views.

        Question. Some Bangladeshi Islamist groups, including Hefazat-e-
    Islam, have demanded the imposition of antiblasphemy laws, similar to
    those in place in Pakistan.

       What is your assessment of how such laws could affect
            religious freedom in Bangladesh?
       What is the State Department doing to support legal and
            constitutional reforms that increase protections for religious
            minorities and women in Bangladesh?

        Answer. We are encouraged by the Bangladeshi Government's strong
    support for the country's tradition of tolerance, secularism, and
    women's empowerment in response to recent demands for the imposition of
    antiblasphemy laws by some Bangladeshi Islamist groups, including
    Hefazat-e-Islam. In addition, the Government of Bangladesh has rejected
    the call for new antiblasphemy laws as unnecessary. We support the
    right of freedom of expression, set forth in the International Covenant
    on Civil and Political Rights, to which Bangladesh is party, and
    continue to press the government to improve protections for women,
    girls, and members of religious minorities. We continue to work with
    the Government of Bangladesh to advance the rights of women and
    marginalized populations. We also continue to support the NGO community
    and civil societies' efforts to do the same.
                                     ______

              Responses of Lewis Karesh to Questions Submitted by
                             Senator Jeanne Shaheen

        Question. Mr. Karesh, it is my understanding that the Office of the
    U.S. Trade Representative is leading the administration's review of
    Bangladesh's Generalized System of Preferences (GSP) trade benefits. In
    your testimony, you mentioned that through the GSP program, Bangladesh
    has made some progress, but that USTR has become increasingly concerned
    by serious backsliding on worker rights and conditions in the last year
    alone.
        During the second panel of the Senate Foreign Relations Hearing on
    labor issues in Bangladesh, it was mentioned that suspending GSP trade
    benefits for Bangladesh would inhibit future U.S. Overseas Private
    Investment Corporation (OPIC) projects.

       Can you speak to the impact on OPIC projects in Bangladesh
            if the President were to decide to remove GSP trade benefits?

        Answer. On June 27, 2013, President Obama suspended GSP trade
    benefits for Bangladesh based on a determination that Bangladesh ``has
    not taken or is not taking steps to afford internationally recognized
    worker rights to workers in the country.'' The suspension will take
    effect 60 days after the President's proclamation taking this action is
    published in the Federal Register. Since OPIC must also take into
    account worker rights criteria in assessing its country-level program
    eligibility, the President's action will also affect OPIC programs. It
    is USTR's understanding that, once the suspension of Bangladesh's GSP
    trade benefits takes effect, OPIC will be prohibited from supporting
    future investments in Bangladesh. However, suspension of GSP benefits
    will not affect existing projects to which OPIC has already made a
    legally binding commitment.
        OPIC's existing portfolio in Bangladesh, which will not be affected
    by the suspension, amounts to $13.3 million and is focused on
    telecommunications and humanitarian and development services.

        Question. In your assessment, what would be the other possible
    outcomes of removing GSP benefits?

        Answer. USTR is not aware of other impacts on U.S. programs of the
    suspension of GSP benefits.

        Question. We are hearing the right words from the Government of
    Bangladesh, but are we really seeing the necessary actions to address
    the serious shortcomings in worker rights and labor conditions in the
    country?

        Answer. The President's decision to suspend GSP trade benefits for
    Bangladesh was based on a determination that the Government of
    Bangladesh is not taking the necessary steps with respect to worker
    rights.
        In a statement released shortly after the President's action was
    announced, Ambassador Froman said, ``Our GSP statute requires certain
    basic standards for worker rights and worker safety as a condition of
    eligibility. Over the past few years, the U.S. Government has worked
    closely with the Government of Bangladesh to encourage the reforms
    needed to meet those basic standards. Despite our close engagement and
    our clear, repeated expressions of concern, the U.S. Government has not
    seen sufficient progress toward those reforms. The recent tragedies
    that needlessly took the lives of over 1,200 Bangladeshi garment
    factory workers have served to highlight some of the serious
    shortcomings in worker rights and workplace safety standards in
    Bangladesh. While taking this action today, the administration is also
    initiating new discussions with the Government of Bangladesh regarding
    steps to improve the worker rights environment in Bangladesh so that
    GSP benefits can be restored and tragedies like the Rana Plaza building
    collapse and Tazreen Fashion factory fire can be prevented. The Obama
    administration is committed to reflecting American values in our trade
    policy, including with regard to the rights of workers worldwide.''
                                     ______

          Responses of Assistant Secretary Robert Blake to Questions
                      Submitted by Senator Jeanne Shaheen

        Question. Assistant Secretary Blake, in response to the deadly
    collapse of Rana Plaza, we've seen some American companies express a
    willingness to work to improve labor conditions in Bangladesh and
    others have decided that it is simply too risky and too damaging to
    their brand and reputation to continue to source from apparel
    Bangladesh.
        It is my understanding that roughly 80 percent of the garment
    workers in Bangladesh are women.

       How real is the possibility of a mass exodus from Bangladesh
            by some of the other big name brands and how would such a move
            impact these women who have gained new independence and
            improved the lives of their families as a result of this work?

        Answer. The growth of Bangladesh's ready-made garment industry has
    contributed to impressive gains in employment, particularly for women,
    and development successes over the past few decades. Of the over 4
    million garment workers in Bangladesh, approximately 80 percent (3.2
    million) are women. The State Department continues to actively engage
    with U.S. companies on worker rights and safety in Bangladesh,
    especially in light of the Rana Plaza and Tazreen Fashions' tragedies.
    We understand that some U.S. companies are taking individual actions to
    remedy the immediate situation, but we also continue to encourage U.S.
    brands to take collective action that leverages these efforts and
    involves all the key stakeholders in Bangladesh, including the
    government, factory owners, and civil society. While a few brands have
    made the choice to source products from other countries, there are many
    others committed to working with Bangladesh to resolve challenges to
    fire and building safety and worker rights.

        Question. In your assessment, would a decision to suspend the
    Generalized System of Preferences (GSP) trade benefits for Bangladesh
    change the calculus of some retailers and apparel companies who are
    currently undecided on how best to proceed?

        Answer. The United States has been considering for some time
    options regarding GSP benefits for Bangladesh. The current review of
    the GSP program signals the United States' strong interest in
    Bangladesh's ability to meet international labor standards,
    particularly in the area of worker rights. Our decision is imminent.
    Regardless of the decision, we are preparing a roadmap of the types of
    changes we see as needed to improve worker rights and fire and building
    safety in Bangladesh. It should be noted that U.S. imports from
    Bangladesh under GSP are modest. In 2012, Bangladesh's exports under
    the GSP program totaled only $34.7 million--
    or less than 1 percent of Bangladesh's $4.92 billion in exports to the
    United States for that year. The GSP program does not include apparel
    or other ready-made garments.

        Question. From the testimony received by the Senate Foreign
    Relations Committee, it would appear that there are differing opinions
    on how best to address the serious issue of worker rights in
    Bangladesh.

       What is the State Department doing to build consensus with
            all stakeholders and especially the private sector retailers
            and apparel companies?

        Answer. Improving labor rights and working conditions--as well as
    all human rights--is one of our key foreign policy objectives
    worldwide. The recent tragedies at factories in Bangladesh underscore
    the urgent need for the Government of Bangladesh, factory owners,
    international buyers, and workers to come together to strengthen
    respect for workers' rights, including ensuring safe and healthy
    working conditions. The United States actively engages with the highest
    levels of the Government of Bangladesh, Bangladeshi exporters, and
    international buyers on these issues, as well as with the International
    Labor Organization. We regularly cite our concerns about labor rights
    in Bangladesh, including factory conditions, in our annual Human Rights
    Report and in our bilateral consultations, including during the recent
    U.S.-Bangladesh Partnership Dialogue in Dhaka. Additionally,
    discussions of worker rights and safe working conditions are part of
    the current review of Bangladesh's trade benefits under the GSP
    program. We also have an ongoing high-level dialogue with U.S. buyers
    that source from Bangladesh about workplace safety and the role that
    buyers can play in strengthening respect for the rights of workers,
    including ensuring safe and healthy working conditions. In March, and
    again in May, we reviewed our expectations of U.S. companies'
    engagement in Bangladesh and shared a ``Best Practices for Companies
    Operating in Bangladesh'' document (please see attached). The U.S.
    Government is currently discussing a joint effort with the European
    Union, the Government of Bangladesh, and the International Labor
    Organization to bring working conditions and respect for workers rights
    in the garment sector in Bangladesh in line with international labor
    standards.

    ATTACHMENT

        United States Government Recommendations on Best Practices for
    Companies with Operations in Bangladesh--U.S. Department of State (Mar.
                                   11, 2013)

        On Tuesday, March 5, 2013, Assistant Secretary of State for
    Democracy, Human Rights, and Labor Michael Posner and Assistant
    Secretary of State for South and Central Asia Robert Blake hosted a
    conference call with over 70 U.S. brands and civil society groups to
    discuss fire safety issues in manufacturing facilities in Bangladesh.
    On the call, Assistant Secretary Posner and Assistant Secretary Blake
    summarized important labor rights issues, including the status of the
    Aminul Islam case, union registrations, and legal reforms. They also
    outlined what the U.S. government views as best practices for companies
    with operations in Bangladesh. Eric Biel, Acting Associate Deputy
    Undersecretary for International Affairs at the Department of Labor,
    discussed his recent trip to Bangladesh, including numerous meetings on
    fire safety and labor law reform, and possible areas for bilateral
    technical assistance.
        Unsafe working conditions in Bangladesh were brought into the
    international spotlight by the Tazreen factory fire of November 2012,
    the worst of many deadly manufacturing fires in the country in recent
    years. The ILO has been engaged with the Government of Bangladesh on a
    Tripartite National Action Plan on Fire Safety to address this issue,
    and as of today the Plan is being finalized by the Ministry of Labor
    and Employment. They also have worked with the Government to identify
    necessary steps, including reforms to labor law and an improved and
    more transparent union registration process, to create an ``enabling
    environment'' for the establishment of a Better Work program.
        The National Action Plan and Better Work program both offer
    opportunities to sustainably improve labor standards in Bangladesh and
    could both benefit from the support and cooperation of international
    buyers, including in coordination with buyers' own initiatives. The
    practices outlined below are recommendations from the U.S. government
    to U.S. brands as they promote respect for human rights and
    international labor standards, as well as encourage engagement with the
    Government of Bangladesh and other stakeholders on these issues.

        1. Act Collectively: Companies should work together to figure out
    how they can make a difference collectively. And it's important that
    responses meet three criteria: they're credible; they're relevant; and
    they're effective. There are several ongoing collaborative initiatives
    in various stages of development. We encourage companies to link
    efforts on labor and human rights with collaborative work being done
    through multi-stakeholder initiatives, third-party auditors, industry
    associations, and cooperative agreements. The Tripartite National
    Action Plan on fire safety may offer entry points for buyers and civil
    society to support and enhance a Bangladesh-owned process to improve
    fire safety.
        2. Develop Broad Principles and Policies and Procedures for
    Implementation: Companies should have clearly defined labor and human
    rights principles, policies and procedures that guide their behavior
    and that of their suppliers and subcontractors. Such policies should be
    based on internationally recognized human rights and international
    labor standards and there should be effective and transparent means of
    monitoring compliance. Senior leadership of the companies should
    visibly support such efforts and encourage implementation throughout
    the entire supply chain.
        3. Develop Credible Internal Benchmarks: In order to assess
    progress and effectiveness, companies should have internal metrics to
    manage and measure performance on labor and human rights.
        4. Conduct Independent Third-Party Verification: Third-party
    verifiers should assess performance of company policies and procedures.
    Inspections by verifiers should be thorough, timely, unannounced,
    independent, and include confidential interviews and consultations with
    workers about workplace conditions. Inspections should look at serious
    and common hazards, implementation of the local law and respect for
    internationally recognized human rights and international labor
    standards, and mechanisms for tracking noncompliance with company
    policies and procedures.
        5. Corrective Actions and Penalties: Corrective action may be
    necessary to address non-compliance with company policies and
    procedures at any point in the supply chain. When suppliers are found
    to be in non-compliance, there should be timely identification and
    financial or technical assistance to help address hazards in factories.
    There should be contractual penalties for non-compliance that are clear
    and meaningful. Also, when non-compliance is discovered, corrective
    actions should be shared with stakeholders to the extent possible and
    appropriate to disseminate lessons learned and best practices for
    avoiding or mitigating future incidents.
        6. Cultivate Worker Voice and Education: In manufacturing
    facilities within a company's supply chain, buyers should seek to
    engage with workers to (a) promote education; (b) prevent retaliation
    against those reporting hazards; and (c) compensate workers, including
    those put out of work during corrective actions. Companies should
    communicate with workers through legitimate representatives selected by
    the workers themselves, and should avoid factories where no such
    representative mechanism exists.
        7. Share Information: Companies should share information with each
    other, stakeholders, and relevant host government officials about
    factories that fail to comply with policies and procedures or
    corrective measures, so as to bring the greatest leverage to bear with
    the greatest effect, and to avoid undercutting each other's efforts.
    Information-sharing will ensure maximum coordination and knowledge.
        8. Work with Stakeholders: Draw on the expertise and experiences of
    other companies, NGOs, unions, the ILO, the Government of Bangladesh,
    and others to develop sophisticated responses to the current human
    rights challenges.
                                     ______

       Responses of Acting Associate Deputy Undersecretary Eric Biel to
                 Questions Submitted by Senator Jeanne Shaheen

        Mr. Biel, while we have heard that positive steps are being taken
    in Bangladesh in response to the tragic Rana Plaza collapse that
    resulted in the deaths of over 1,100 garment workers, I am concerned
    about the enforcement and oversight side of this issue, especially
    given the shocking statistic stating that at least 60 percent of the
    garment factories in Bangladesh are currently at risk of collapse.
        In your testimony, you mentioned that, given the size of the
    garment industry in Bangladesh, the government's inspection capacity is
    grossly inadequate, despite recent plans to increase the number of
    inspectors. The Government of Bangladesh needs to do more.

        Question. In your view, can we rely on the Bangladeshi Government
    to ensure the adequate enforcement of oversight at this point for its
    garment industry? Is this truly an issue of capacity for the
    government?

        Answer. The Government of Bangladesh has the primary responsibility
    for the enforcement of national labor law with respect to worker rights
    and workplace safety in the ready-made garment sector. At the same
    time, and as noted in my testimony before the committee on June 6, the
    U.S. Government recognizes that, at present, Bangladesh's Ministry of
    Labour and Employment does not have a sufficient number of labor
    inspectors to satisfy this substantial responsibility, and many of the
    current labor inspectors also lack adequate training and resources.
        Addressing these significant shortcomings so that the Government
    can fulfill its responsibility is a great challenge for the Government
    and other stakeholders. We are encouraged that, as part of the joint
    statement issued on May 4 following the high-level visit of the
    International Labor Organization led by Deputy Director General
    Houngbo, the Government of Bangladesh committed to hire an additional
    200 labor inspectors within 6 months, and to provide budgetary
    authority for a minimum of 800 new inspectors.
        Donor countries, including the United States, can play a role
    through technical assistance and other funding programs. To that end,
    on June 13 the U.S. Department of Labor's Bureau of International Labor
    Affairs, where I serve, announced a $2.5 million competitive grant
    solicitation to fund improvements in the enforcement and monitoring of
    fire and building safety standards in the ready-made garment sector in
    Bangladesh. This technical assistance, one part of the broader strategy
    to address labor enforcement issues, will fund one or more recipients
    to: (1) strengthen the Bangladesh Government's ability to improve its
    enforcement of fire and building safety standards, and (2) build the
    capacity of worker organizations to effectively monitor violations of
    fire and building safety standards and abate related hazards in the
    ready-made garment sector.
        The two-part program design recognizes the lead responsibility of
    the Government of Bangladesh, while at the same time acknowledging the
    central role that workers and their representatives must play in
    improving conditions in the workplace, especially given existing
    capacity issues of the Government.
        In addition, as noted in my testimony before the committee, the
    powerful Bangladeshi garment industry, as well as the international
    buyers and retailers that source products from Bangladesh, must do more
    to address worker rights and workplace safety issues in the sector.
    While the responsibility of the Government remains paramount, the
    private sector also has a clear role to play, such as through financing
    safety improvements or training management in appropriate fire safety
    responses--and by ensuring that workers' rights to advocate on behalf
    of their interests in the workplace are respected.

        Question. During your testimony, you mentioned that ``legal gaps''
    exist in the export processing zones of Bangladesh. Can you elaborate
    on this important point? Can the U.S. Government play a more
    constructive role in this regard?

        Answer. Industrial relations in the export processing zones (EPZs)
    of Bangladesh are governed by a different labor law than the law that
    generally governs industrial relations in Bangladeash. While most labor
    issues in the private sector are subject to the Bangladesh Labour Act
    2006, administered by the Ministry of Labour and Employment, the
    administration of the EPZs (where approximately 250,000 workers are
    employed) and enforcement of EPZ-specific labor law is the
    responsibility of the Bangladesh EPZ Authority (BEPZA). When the
    Government of Bangladesh adopted the EPZ Workers Association and
    Industrial Relations Act (EWAIRA) in 2004, it was intended as a phased
    approach and an interim measure. EWAIRA expired in 2008, but instead of
    completing the transition to full coverage of the national labor law,
    the separate EPZ law was reauthorized in 2010 as the EPZ Workers'
    Welfare Society and Industrial Relations Act (EWWSIRA)--with additional
    restrictions rather than expanded rights for workers. The U.S.
    Government has noted these concerns publicly, including specific cases,
    in the 2012 Human Rights Report on Bangladesh.
        As reflected in the detailed comments of the International Labor
    Organization's Committee of Experts on the Application of Conventions
    and Recommendations, the EPZ law falls short of international standards
    in a number of fundamental ways. For example, since 2004, the EPZ labor
    law has provided for a blanket prohibition against strikes in any EPZ.
    That provision of the law is scheduled to sunset at the end of 2013; if
    that sunset does take effect, it would provide for a legal right to
    strike beginning in 2014. However, given continuing restrictions on the
    right to strike, such as a 15-day limit, a ``public interest''
    exception, and a 75-percent voting threshold requirement, the U.S.
    Government believes it unlikely that strikes will be permitted in
    practice within EPZs, even with the expiration of the full prohibition.
        Other areas of concern identified with respect to EPZ law and
    governance include:

       The law constrains the establishment of ``Workers' Welfare
            Societies'' (the term used for the strictly limited form of
            worker organizations within EPZs) through burdensome membership
            and referendum requirements.
       It prohibits the affiliation of such associations between
            zones or with any political or nongovernmental entity.
       It provides for unfettered BEPZA discretion (exercised by
            the BEPZA Executive Chair, a position that has been filled by
            the Office of the Prime Minister with senior military
            officials) in the cancellation of a Society's registration.
       It prohibits Societies from obtaining or receiving any funds
            from any outside source without the BEPZA Executive Chair's
            prior approval.
       It permits elected leaders of the Societies to be terminated
            by employers with the concurrence of the BEPZA Executive Chair.
       In addition to such gaps in the law, worker organizations
            have reported that BEPZA fails to enforce even the limited
            protections of the law, and has actively created additional
            obstacles to the registration of societies and to the limited
            associational rights of workers.

        The U.S. Government continues to engage with the Government of
    Bangladesh regarding these and other concerns about lack of freedom of
    association in the EPZs. The issue has been and remains an important
    part of the continuing review of Bangladesh's eligibility for benefits
    under the Generalized System of Preferences (GSP) trade program. We
    also encourage the Government of Bangladesh to take the measures
    recommended by the ILO's Committee of Experts to bring its law and
    practice into full conformity with international labor standards.
                                     ______

                Written Testimony Submitted by Peter J. Kaufman

        It is a great honor to be asked to make a statement regarding labor
    in Bangladesh. I would like to acknowledge the critical importance of
    this committee and this hearing. Two catastrophic events in Bangladesh
    over the last several months have focused worldwide attention on
    egregious labor, safety, and human rights violations that exist in
    Bangladesh today. First, the terrible fire in November that killed
    almost 200 people and then the recent building collapse that killed
    upwards of 1,200 people and both disasters occurred in garment
    factories. Since then, there has been intense media scrutiny of
    Bangladeshi labor as well as uproar and protests from numerous human
    rights groups and the public at large. Therefore, the committee's focus
    on ``Labor in Bangladesh'' could not be more urgent and timely.
        As an observer of labor and the industrialization of Bangladesh in
    the fashion industry for some 30 years, I have witnessed notable
    progress in terms of growth and development. Yet Bangladesh is unique
    and can be frustrating. Despite progress in some sectors, Bangladesh
    remains an underdeveloped country. Per capita wages make it one of the
    poorest countries on earth.
                                   bangladesh
        The fashion industry is usually the first industry to invest in
    developing countries because it is an industry that requires minimal
    labor skills. I use the term ``fashion industry'' rather than
    exclusively the ``garment industry'' because the range of product is
    more inclusive: garments, home products such as bedding, decorative
    pillows, handbags, jewelry, shoes, hosiery and other accessories.
    Especially in the case of accessories, hand work is often required.
    Post-World-War-II Japan was considered a developing country. U.S.
    consumers in the 1950s and 1960s were flooded with imports with a
    ``Made in Japan'' label. Hard goods gradually replaced soft goods as
    Japan became a more sophisticated manufacturing country. As countries
    progress in this manner, labor becomes prohibitively expensive and the
    cost of fashion items is no longer competitive. In addition, since hard
    goods have a higher price tag so their manufacturing is encouraged.
    This helped Japan's trade deficits and increased their GDP. Therefore,
    the fashion industry moved in to countries such as South Korea, Taiwan,
    Hong Kong, the Philippines, etc. These countries were ripe for
    development. Today, ``Made in China'' is on almost every type of
    product. This is largely due to two factors: our ``free market''
    environment and China's remarkable success story of industrialization.
    Observing these trends over many years, Bangladesh has not accelerated
    at the same rate as the other countries mentioned here. Indeed, it has
    unusual burdens that keep it back from more rapid growth. Unemployment
    is already rampant. Only by virtue of trade legislation does a very
    poor country like Bangladesh have the ability to compete with China.
    Without this tariff relief, the entire Bangladeshi economy would be in
    chaos.
        In order for a developing country to attract investment it must
    have: (a) political stability; (b) a reliable infrastructure that
    includes roads, reliable shipping via sea and air; and (c) a motivated
    and reliable labor force. When I first visited the country in the early
    1980s, Bangladesh had only (c) a reliable labor force. Doing business
    there was out of the question. The factories that did exist had
    appalling working conditions. Excluded were the most basic amenities
    such as proper lighting, sanitation, and safe housing. The Port of
    Chittagong, nearest to the capital city of Dhaka, was primitive. In
    fact, it was famously unreliable due to the fairly regular sinking of
    cargo ships as a result of typhoons and other natural disasters. Not
    only was the quality of the merchandise unreliable, there was also a
    lack of on-time delivery. Additionally, the lead times for
    manufacturing were excessively long--often more than 6 months--because
    basic materials such as fabrics, findings, and thread, had to be
    imported from South Korea or Taiwan. It is a tribute to the great
    spirit and work ethic of the Bangladeshi people that some progress has
    been achieved.
        Today, 30 years later, Bangladesh remains basically an agricultural
    country. Men still work primarily in the fields. Women often work in
    the factories. Thus women are most vulnerable to the vicissitudes of
    working in factories with substandard conditions. Yet significant
    progress has been made in some areas.
        After 30 years, Bangladesh still lags behind in heavy and medium-
    level industries while other countries in central and east Asia are key
    players in the automobile industry. Although infrastructure has
    improved significantly in some areas, other areas of the country still
    lack reliable power, telecommunication, transportation, water and gas.
    Continuing governmental instability coupled with an entrenched
    bureaucracy puts additional burden on the existing manufacturers and
    inhibits investment. Due to its long colonial rule, economic
    discrimination and government nationalization of this industry, growth
    has been slow. While we can place much of the blame on these economic
    and geopolitical factors, the fact remains that too many factories have
    existed in the same conditions for the last 30 years. Indeed a very
    large percentage the employees working in fashion products still have
    no expectation of safety, hygiene, fair pay, and human rights.
        On the positive side new, state-of-the-art factories have been
    built including some in heavy industries. These private enterprises
    area making a remarkable contribution to the national economy. In the
    garment business, for instance, I visited vertical sweater and knitwear
    facilities. Yet historically Bangladesh had only specialized in woven
    fabrics. These factories met every international standard of safety,
    fair wages, and human rights. Today, the combined tally of the so-
    called ``ready-made garments'' along with the entire textile sector not
    only make an enormous contribution to this country's GDP, it is also,
    by far, its largest export.
                               beyond bangladesh
        In September, just prior to the November fire in Bangladesh, there
    was another catastrophic incident. The New York Times reported that
    ``Fire ravaged a textile factory complex in the commercial hub of
    Karachi early Wednesday, killing almost 300 workers trapped behind
    locked doors and raising questions about the woeful lack of regulation
    in a vital sector of Pakistan's faltering economy. It was Pakistan's
    worst industrial accident, officials said, and it came just hours after
    another fire, at a shoe factory . . . had killed at least 25.'' The
    Times goes on to report: ``every exit but one had been locked . . . and
    the windows were mostly barred. In desperation, some flung themselves
    from the top floors of the four-story building, sustaining serious
    injuries or worse, witnesses said. But many others failed to make it
    that far, trapped by an inferno that advanced mercilessly through a
    building that officials later described as a death trap.'' Indeed, the
    Pakistan Institute of Labor Education and Research, a labor rights
    group, said that ``151 workers died in similar accidents in 2011.''
    According to the Institute: ``The state was partly responsible for the
    deaths . . . because its civil servants silently and criminally allow
    violation of laws and regulations established to ensure health and
    safety provisions at work.'' There are striking parallels to
    Bangladesh. While I applaud the committee's focus on Bangladesh in
    these hearings, I respectively point out that sweatshops such as these,
    often equally dangerous, exist all over the world. I have personally
    been witness to horrific examples in Africa, in China, Guam, Central
    America, and Indonesia to name a few. Even in the United States there
    have existed clandestine factories in Queens, Brooklyn, and Long
    Island, not to mention in border towns from Texas through southern
    California.
        Labor Behind the Label, a human rights organization, reported about
    the incident in Pakistan: ``the fire follows a pattern of negligence
    occurring not just in Pakistan but throughout the garment industry.
    Brand and retailers must therefore take more action to address the root
    causes of such disasters.''
                       a culture of cheap leads to greed
        The culture of ``cheap'' in the United States (and elsewhere) takes
    a terrible toll on human beings at the other end. As consumers, we are
    offered the ``$17'' dress--at full price--in trendy stores. As
    retailers, brands, and importers squeeze for higher profits, their
    ``sourcing executives'' that place the orders on the ground must
    squeeze at the other end. A result of this is subcontracting, which
    occurs despite official contracts and ``Letters of Credit''
    specifically prohibiting it. At the local factory level, owners and
    management also press for profitability. When the retail price becomes
    impossibly cheap while the cost of labor and materials remain the same,
    someone must pay the price. Those at the lowest end of the food chain
    are the ones who pay. The factory laborers are forced to endure
    horrendous conditions. Since there is already rampant unemployment in
    many of these countries, workers have no choice but to work in
    horrendous conditions for $50 a month. While it is true that some
    retailers and brands did have direct knowledge of factory conditions,
    the reality is that ``subcontracting'' or ``outsourcing'' can and does
    occur everywhere in the world.
        As we examine the supply chain, from consumer to laborer, there is
    yet another human factor beyond mere profitability: greed. Surely this
    is a motivating factor when factory managers and supervisors block fire
    escapes due to overcrowded conditions. Surely this must be a motivation
    when fire extinguishers are intentionally removed or misplaced. Loading
    far too many sewing machines into electrical outlets incapable of
    handling them is yet another example. Imposing long working hours in
    order to maintain profits is another example. It is also well
    documented that factory supervisors will beat their employees into
    working ``harder'' and 'better.'' Surely there exists a ``culture'' in
    Bangladesh that allows such horrific violations to perpetuate. It is
    not only appalling and inhumane but illegal.
                                   summation
        Internationally, garment production on behalf of U.S. companies in
    factories with exploitative policies and hazardous working conditions
    has fueled anti-Western sentiment. Recent Islamist riots in Bangladesh
    have added to the country's striking death toll and increased pressure
    on its endangered fashion industry. Given that a large percentage of
    fashion industry manufacturing wordwide is located in the Muslim world,
    Islamist radicals use these catastrophic incidents as propaganda tools
    undermining public opinion of the West, but also potentially
    undermining the stability of already faltering regimes. By demanding
    ethical, humane garment production we can better the U.S. fashion
    industry's reputation and prevent some of the violence and instability
    that hinders workers from making a proper livelihood.
        I know that this committee will be considering powerful and well-
    intentioned efforts to improve factory conditions for laborers in
    Bangladesh. One approach could be along the lines of threatening with
    removing tariff relief if conditions are not improved ``soon enough.''
    But this is not the correct approach. If such legislation is imposed,
    Bangladesh will no longer be competitive in the fashion-related
    products that make up the bulk of their GDP and their exportation. If
    this should pass, I do entirely agree that the industrialists, factory
    owners, management and supervisors will be punished. These terrible
    factories will finally close. However, along with them, the many good
    factories that already observe human rights and international guide
    lines will close as well. The ``good'' factories make up a large
    percentage of the total volume. Most significantly, the ripple effect
    of such legislation is that it will most profoundly affect the tens of
    thousands of innocent laborers who are already victimized. Surely, it
    is preferable that workers can have a choice whether or not to work
    under current conditions and in improving conditions rather than
    joining the millions who are already unemployed. I believe that there
    is an alternative strategy: Allowing retailers, brands, and
    manufacturers to take responsibility for business on the ground.
    Without orders, there is no business and therefore there can be no
    factories. Collectively, they should take responsibility for improving
    conditions, enforcing international labor standards and as well as
    working in tandem with local representatives to address safety issues
    in every country they source from.
        I see that significant progress is already in work. There are too
    many to list. For instance, Phillips-Van Heusen recently announced that
    they had signed an important agreement: ``the Clean Clothes Campaign
    (CCC) together with Bangladeshi and international human rights
    organizations worked with PVH (owner of Tommy Hilfiger and Calvin
    Klein) concerning Bangladesh, whose industry has suffered from a spate
    of . . . fires involving brands such as H&M, Zara, and GAP. The
    agreement provides for independent inspections, training, and worker's
    committees on health and safety issues.'' Indeed there are all kinds of
    announcements by a variety of retailers and brands who are investing to
    improve the infrastructure in Bangladesh. Both Walmart Stores and Gap
    Inc. are meeting with ``industry associations and the Bipartisan Policy
    Center to develop a plan to improve fire and safety regulation in
    Bangladesh factories.''
        However, no one yet has ever brought all these important retailers,
    brands, and manufactures to the table to collectively use their
    enormous buying power to change conditions on the ground. Inspired by
    recent experiences I had at the United Nations including such
    initiatives as Fashion4Development, Every Woman Every Child and the
    Millennium Development Goals (MDGs), I founded a nonprofit called Fair
    FashionTM. The primary directive of Fair
    FashionTM is to bring industry to the table--for the first
    time--to collectively use their buying power to improve conditions on
    the ground. If orders en masse are withheld, conditions will change. We
    suggest a symposium in the very near future to address this very issue.
    Eventually a consortium or coalition would be formed consisting of the
    most important retailers, brands, and manufacturers to address such
    issues as working conditions on the ground in addition to strategizing
    how to help developing countries create sustainable factories for the
    future. This process would be ongoing.
        I truly believe that harnessing the collective buying power of the
    most important retailers, brands and manufacturers will not only make
    the necessary changes but will also enable the people of Bangladesh to
    stay employed during this period of transition. An agreement has been
    signed in the EU spearheaded by H&M that includes all their major
    retailer and brands. Thus far most U.S. companies have refused to sign
    on fearing liability. The symposium will enable their U.S. counterparts
    to draft something analogous, but in language that is more practical.
    Using the EU agreement as a pro forma, their American counterparts will
    put their enormous collective buying power behind this agreement. The
    effect will have not only immediate change, but the right kind of
    change in the future.
        Finally, once again, I would respectfully like to point out to the
    committee that Bangladesh is not alone. The September fire in Pakistan
    that occurred just preceding the two disasters in Bangladesh is only
    one of many such incidents that occur far too frequently. Perhaps the
    only difference is that these occur ``under the radar.'' This problem
    is not just about Bangladesh. Indeed, sweatshops exist in many
    countries throughout the world. This is a global problem and should be
    addressed as such and as soon as possible.
        I would like to thank the committee again for allowing me to submit
    this statement and my point of view as part of the official record.
                                     ______

       Written Testimony Submitted by Kalpona Akter, Executive Director,
                 Bangladesh Center for Worker Solidarity (BCWS)

                                i. introduction
        Chairman Menendez and Ranking Member Corker, thank you for the
    opportunity to submit written testimony on the struggle of garment
    workers to secure basic labor rights in my home country of Bangladesh.
    Given the thousands of workers who have recently lost their lives or
    been severely injured working in Bangladesh's apparel export sector,
    this hearing could not be more timely.
        My name is Kalpona Akter. I went to work in a garment factory in
    Bangladesh when I was 12 years old. I went to work because my father
    had a stroke and the family needed money to cover basic living
    expenses. My mother and I started working in the factory together, but
    my mother had a 2-month-old infant and so had to quit, so my 10-year-
    old brother and I were the ones who had to sustain the family. I was
    paid $6 a month back then for working up to 450 hours per month in
    sweatshop conditions. I worked for 8 years at that factory, but I was
    fired because I began organizing my coworkers to form a union so we
    could have better wages and conditions. I went to work for another
    union and then in 2000 I cofounded the Bangladesh Center for Worker
    Solidarity, a labor rights advocacy organization that conducts
    research, offers worker training, and works closely with trade unions,
    such as the Bangladesh Garment Industry Worker Federation, to help
    workers know how to claim their rights.
                                 ii. background
        The garment export industry is a major employer in Bangladesh, with
    over 4 million workers, more than 80 percent of whom are women, mostly
    from poor, rural backgrounds. They make clothing for export, mostly to
    the U.S. and European brands and retailers who have flocked to the
    country to take advantage of rock-bottom wages. Bangladesh's garment
    workers are the lowest-paid in the world, with an industry minimum wage
    of about $38 a month--due to inflation; this cannot buy any more than
    the $6 that I used to earn.
    Dangerous Factories
        Aside from long hours and low wages, apparel sector workers often
    work in factories with chronic safety problems. Since 2005, over 1,800
    workers have died and thousands more were severely injured in garment
    factory fires and building collapses. These deaths and injuries could
    have been prevented had basic safety measures been in place and had
    workers' right to refuse dangerous work been respected.
        While the recent tragedies at Tazreen Fashions and Rana Plaza, in
    which at least 1,239 workers died making clothing for export, have
    understandably attracted international attention and condemnation, the
    fact is that most of the 5,000 garment factories in Bangladesh are not
    up to fire and building safety code--they are death traps. Any day more
    workers could be burned alive or crushed when a building collapses. In
    fact, since Tazreen, and not counting Rana, there have been at least 44
    incidents in the Bangladesh garment industry in which a total of 16
    workers were killed and at least 691 workers were injured.\1\
    Widespread union and worker repression
        On paper, Bangladeshi workers do have the legal right to form
    unions and collectively bargain with factory owners. In reality,
    attempts to unionize the country's garment workers are ruthlessly
    suppressed, with activist workers harassed, blacklisted, or worse, with
    tacit government approval.
        Last year, my friend and colleague Aminul Islam, a garment worker-
    turned-labor-organizer who worked for the Bangladesh Garment &
    Industrial Workers Federation and the Bangladesh Center for Worker
    Solidarity, was killed, his body--bearing marks of torture--dumped on a
    highway. The government has failed to find or prosecute his killers,
    but we believe his murder was intended to create a climate of fear
    among other labor activists. He had been detained, tortured and jailed
    on previous occasions by security forces in the 2 years prior to his
    disappearance.
                iii. beyond the numbers: stories from survivors
        While the statistics of death and injury in recent months are
    astounding and have broken records, the numbers alone may not capture
    the pain and suffering of families who lost their loved ones and of all
    the severely injured workers who lost arms and legs, many amputated on
    site at Rana Plaza in rescue missions to pull workers from the rubble.
    Let me share just a few stories from workers who survived:
    Tazreen Fashions--Fire on November 24, 2012 \2\
       Rehana jumped from the 4th floor window of Tazreen Fashions
            and was knocked unconscious. She broke her leg. Doctors told
            her she will need to be on crutches for the rest of her life.
       Reba was the breadwinner in her home. She jumped from the
            3rd floor of Tazreen Fashions. She cannot work because of the
            pain. Her husband is sick. She has two sons, one of whom just
            qualified to get into the military college. She doesn't know
            how she can afford it.
       Rowshanara jumped from the 3rd floor and still has severe
            pain in her back and legs. She was visibly in pain after
            sitting too long with us. She is single and gets by on loans.
            She has two teenage children in school she doesn't want to
            force to go to work, but she worries how she'll get by.
       Deepa worked on the 3rd floor. She saw the fire and tried to
            escape to the 2nd floor. The factory manager padlocked the door
            and told everyone to keep working. Workers were crying and
            searching for a way out. A mechanic yelled to come to the east
            side of the building where he had created an exit. She jumped
            from the 3rd floor and fell unconscious, breaking her leg.
            Deepa was 4 months pregnant and lost her baby.
       Sumi decided to jump from the 3rd floor rather than perish
            in the factory because she wanted her family to be able to
            identify her body. She broke her leg and arm and could not
            move. Her family borrowed money to pay for medical bills before
            the Association funds arrived. Two weeks before Rana Plaza, she
            came to the U.S. to urge retailers and brands to join the
            enforceable and binding Accord on Fire and Building Safety.
       Nazma said she would have died had she waited 10 minutes
            more to jump. She saw the manager locking the gate to the
            second set of stairs and grabbed him by the collar to stop him,
            but he ignored her. She cut her arms trying to get through a
            window to reach a bamboo scaffolding. She broke her backbone.
            Now, she can't carry anything or do household work. She has
            three children. Her stipend was spent on medical care and her
            children's education. Her 14-year-old son had to leave school
            to go to work.
    Rana Plaza--Building Collapse on April 24, 2013 \3\
       Rabeya was working at New Wave Style Ltd. in Rana Plaza the
            day it collapsed. She has two sons and two daughters--and works
            because her husband's income is not sufficient to support the
            family. ``I did not want to go to work. But we were threatened
            by the owner that we would not get our salary if we didn't show
            up,'' she said.
          Describing what happened when the building collapsed, she said:
            ``Upstairs, suddenly I saw some workers running. I also tried
            to save myself. But I could not and fell down. A part of
            ceiling had fallen on me and my legs were stuck between metal
            rods. Meanwhile a big wall had fallen on my chest, breaking my
            sternum. It took 2 hours to free myself from the trapped
            condition. After that I could move a little bit. I fell down
            and screamed, `` `Father . . . save me!' People rescued me when
            they heard my scream.''
          Still in the hospital, Rabeya is facing a long recovery and an
            insecure future. Her face and nose have been crushed, her two
            legs broken, and her chest bones broken. ``Now, this is the
            outcome of my decision to support my family. I have become a
            burden on my husband and my children,'' she said.
       Moriom, 28 years old, lost her right hand in the Rana Plaza
            building collapse and today fumes in anger and concern about
            her bleak future: ``None of us wanted to go to the factory that
            day. They forced us to go there. It was end of the month; we
            would not get paid for that day if we were absent. We are very
            poor, and we cannot bear that loss,'' she said. Moriom has a
            daughter and a son living with her mother in a village. Her
            husband left her long time ago. They were going to school. She
            is now uncertain about their future: ``I am the only earning
            family member. How I will work now?'' she said very sadly.
                        iv. the bangladesh safety accord
        The Accord on Fire and Building Safety in Bangladesh is a legally
    binding, enforceable agreement between companies and unions, created to
    improve safety in the Bangladesh garment industry.\4\ Negotiations for
    the Accord began in the months following a fire on December 14, 2010,
    which killed 29 workers who were trapped inside a factory supplying
    several U.S. companies: Abercrombie & Fitch, Carters, Gap Inc, Kohl's,
    PVH, Target, and VF Corporation. Since then, Abercrombie & Fitch and
    PVH have signed onto the Accord. All told, the Accord now has 41
    companies as signatories including brands and retailers from a dozen
    countries,\5\ two global unions--UNI and IndustriALL, and Bangladeshi
    unions.
        The Accord includes independent safety inspections with public
    reports; mandatory repairs and renovations to address all identified
    hazards; and a central role for workers and unions, including worker-
    led safety committees in all factories and access to factories for
    unions to educate workers on how they can protect their rights and
    their safety, including their right to refuse unsafe work. The heart of
    the Accord is the commitment by companies to work with their suppliers
    to secure financing, maintain orders, and ensure renovations and
    repairs are completed to make factory buildings in Bangladesh safe.
    How the Accord will save lives
        I am confident that had the Accord been operational in the
    factories before the disasters, workers' lives would have been spared
    at Tazreen and Rana Plaza.
                Mandatory renovations, with brands ensuring financing
        First of all, if the Tazreen and Rana factories had been covered by
    the Accord, the inspections would have revealed major safety problems
    and resulted in the U.S. and European brands and retailers being
    required to ensure financing for mandatory renovations. Tazreen would
    have undergone renovations to make the staircases fireproof, add
    additional exit doors, and upgrade electrical wiring. Rana Plaza would
    probably have been closed down due to the illegal construction of the
    building on top of unstable swampy ground, which was then worsened by
    the illegal additions of several floors beyond the five permitted
    floors. The warning signs of a safety hazard had been evident for a
    long time: workers told me that the building would shake on a regular
    basis as a result of the three heavy industrial generators in the
    building. While Rana Plaza would have been closed, under the Accord,
    the brands would have been required to ensure that the factories
    continued to pay workers their regular wage or helped them to find
    employment at neighboring factories, while the factories were either
    renovated or relocated to safer buildings.
                Right to refuse illegal work
        Garment workers in my country live in such poverty that they cannot
    afford to lose even a day of work. So when workers at Rana Plaza were
    told they would not receive their salary if they didn't show up--some
    were even told they would lose a month's salary for not returning the
    day after the cracks appeared--they returned to work. Perhaps some of
    the workers believed what they heard on the loudspeaker on the morning
    of April 24, ``All the workers of Rana Plaza, go to work. The factory
    has already been repaired.'' \6\ Others, while likely skeptical about
    the safety of the building, perhaps felt at a loss of other options for
    putting food on the table for their children, and so decided to
    prioritize their family's survival over concern for their own safety
    that tragic day. The behavior of management in this case is a blatant
    denial of workers' right to refuse dangerous work. Under the Accord,
    workers would not have to choose between such stark options: starve or
    risk your life. Instead, there is a third way, a path of reason, where
    workers' are not discriminated against for refusing dangerous work and
    they receive their regular pay while safety measures are put into place
    at their worksite, whether that means major building renovations or
    moving the factory to a new site.
        At Tazreen, when the fire started, for workers on some floors their
    usual sweatshop job became a circumstance of forced labor. Sumi Abedin,
    a garment worker who worked on the fourth floor, said that when the
    first person on her floor smelled smoke, and she and her coworkers
    started to move for the stairs, her supervisor said it was a false
    alarm and ordered them back to work, locking the collapsible metal gate
    between the floor and the main staircase. The supervisor said to ignore
    the fire alarm--that it was just a false alarm--and told them to keep
    working. The factories in my country are under such high production
    quotas and tight turnaround deadlines from U.S. and European brands
    that supervisors will sometimes ignore a fire alarm in order to not
    lose precious production time. This circumstance would have been
    avoided under the Accord, which requires respect for workers' right to
    refuse dangerous work and prohibits brands from cutting orders from a
    supplier that makes repairs or upgrades necessary to protect workers'
    lives.
        Workers in my country are afraid to organize; their legal right to
    freedom of association and collective bargaining is not guaranteed.
    Under the Accord, companies are required to allow union access. If
    workers' at Rana had bargaining rights, perhaps they could have
    exercised collective action and refused to return to work the day after
    cracks appeared in the walls.
                Public reporting of audit results
        After the September 11, 2012, fire at Ali Enterprises factory in
    Karachi, Pakistan, killed 259 workers who were trapped inside, Social
    Accountability International (SAI)--a New York-based group--came under
    intense scrutiny by labor rights advocates and the media.\7\ The root
    of the concern was twofold: first, auditors accredited under SAI's
    system had given the factory a clean bill of health only weeks before
    the fire, and second, SAI refused to disclose any reporting from the
    audit, citing confidentiality agreements. I ask: how is it that SAI can
    justify keeping their knowledge of the factory confidential when the
    case involves the largest factory fire in known history in the global
    garment industry?
        Another auditing firm, the Business Social Compliance Initiative
    (BSCI), had certified two factories in Rana Plaza, New Wave Style and
    Phantom Apparel. The Web site of another factory in the building, Ether
    Tex Ltd, advertised a BSCI audit as well, and that it had also passed
    inspection for the Service Organization for Compliance Audit Management
    (SOCAM). Clearly, we can't count on these auditing firms to ensure
    safety for our workers, particularly when BSCI (despite having health
    and safety requirements in its code) disclaims any responsibility for
    worker deaths in the premises it had certified by saying: ``The reasons
    for the collapse of the factories seem to be related to the poor
    infrastructure of the Rana Plaza building. BSCI focuses on monitoring
    and improving labour issues within factories and relies on local
    authorities to ensure the construction and infrastructure is secure.''
    \8\
        In my country, where the majority of garment factories are not in
    compliance with fire and building safety code, it is unacceptable for
    an auditor to ignore construction and infrastructure issues. Under the
    Accord, independent inspections will be conducted by experts in fire
    and building safety, and compiled audit results will be made publicly
    accessible as well as available to the union signatories, which can in
    turn inform workers on any hazards identified. At the same time, as
    signatories to a legally binding agreement, the companies that are part
    of the Accord must ensure that the factory buildings are brought up to
    code.
    Why industry alternatives won't help
        Facing mounting international criticism for refusing to join the
    Bangladesh Safety Accord, a group of North American brands, led by Gap
    and Walmart, have indicated they will launch their own scheme
    purporting to address fire and building safety issues in the Bangladesh
    garment industry.
        While the full details have yet to be released, the companies
    haven't given us any reason to believe that their program will include
    the core elements of the Accord which are so essential to preventing
    more tragic deaths: transparency of audit results, union involvement,
    and real respect for workers' right to refuse dangerous work--all in a
    legally binding and enforceable agreement in which brands ensure that
    factories have the financial wherewithal to carry out needed fire and
    building safety repairs. And it's telling that Gap and Walmart didn't
    even bother to meet with workers' representatives while developing this
    new public relations stunt.
        There is no credible reason why retailers like Gap and Walmart
    should not join the 41 companies that have already signed the Accord on
    Fire and Building Safety in Bangladesh and make a real commitment to
    worker safety. Instead, they continue to barrage the public with new
    programs and initiatives that simply repackage the failed programs of
    the past that led to the deaths and injuries of workers in hundreds of
    incidents in Bangladesh's garment industry in recent years.
        Under the Gap/Walmart scheme, even if companies agree to remediate
    and finance repairs, we have no guarantee that they will actually do so
    and we cannot hold them accountable because they refuse to make
    contractual commitments to worker safety.
        Walmart routinely violates their voluntary, nonbinding code of
    conduct and breaks their promises to workers for safe and decent
    working conditions. Why should workers trust any new voluntary,
    nonbinding commitment by Walmart?
                   v. recommendations to the u.s. government
        In order to improve safety conditions in factories in my country
    supplying the U.S. market, and to protect workers lives, with this
    testimony I urge the U.S. Government to:

        (1) Urge all U.S. brands and retailers whose clothing was made at
    Tazreen and Rana Plaza to pay the full and fair compensation they owe
    to the injured workers and to the families of the workers who were
    killed.
        (2) Call on all U.S. brands and retailers that source clothing from
    Bangladesh to sign onto the Bangladesh Safety Accord, joining with 41
    other companies, including three U.S. companies: Abercrombie & Fitch,
    PVH, and Sean John Apparel.
        (3) Mandate the U.S. Joint Military Exchanges to join the
    Bangladesh Safety Accord, and to mandate all other apparel brands sold
    in the Exchanges to do the same.
        (4) Require all U.S. brands and retailers to publicly disclose the
    locations of their supplier factories as well as make available a copy
    of all current and future audit reports.
        (5) Call on U.S. companies to provide fair commercial terms,
    including adequate prices and delivery schedules, to make possible
    factory investment in safe conditions and higher wages, and urge the
    Bangladesh Government to respect workers' right to freedom of
    association so it is possible for garment workers to negotiate for
    higher wages.
        (6) Help provide support for mental health services for garment
    workers dealing with long-term trauma as a result of factory fires and
    building collapses.
        (7) Join with the United Kingdom in taking a new approach to
    export-led development programs by not only providing significant
    financing to ensure the Bangladeshi apparel industry is made safe and
    decent for workers, but also publicly acknowledging, as Minister Duncan
    did this week, the responsibility U.S. brands and retailers have to
    workers making the products they sell.\9\

    ----------------
    End Notes

        \1\ As catalogued by the Solidarity Center, during November 24,
    2012, to May 31, 2013; on file with the International Labor Rights
    Forum.
        \2\ As incorporated in U.S. House of Representatives floor
    statement submitted for the record of June 5, 2013, by U.S.
    Representative George Miller, Ranking Member of House Committee on
    Education and the Workforce.
        \3\ These worker stories were collected by an outreach committee
    that the Solidarity Center office in Dhaka organized with its partners,
    including BCWS.
        \4\ A copy of the Accord is available at http://laborrights.org/
    safetymou.
        \5\ As of June 4, 2013, the companies in the Accord include
    Abercrombie & Fitch, Aldi, Benetton, Bonmarche, C&A, Carrefour, Charles
    Vogele, Comtex, El Corte Ingles, Esprit, Fat Cat, G-Star, H&M, Helly
    Hansen, HEMA, Hess Natur, Inditex (Zara), JBC, John Lewis, KIK, LIDL,
    Loblaw, Mango, Marks & Spencer, Mothercare, N. Brown group (SimplyBe,
    High&Mighty, etc.), New Look, Next, Otto Group, Primark, PVH, Rewe,
    Sainsbury's, Sean John Apparel, s.Oliver, Stockmann, Switcher, Tchibo,
    Tesco, V&D, and WE Group.
        \6\ As reported by Pintu, 18, and Shilpi, 21, workers at New Wave
    Bottom Ltd, one of the factories in the Rana Plaza building, recalling
    the loudspeaker announcement they heard the morning of November 24,
    2013. This testimony was collected by an outreach committee that the
    Solidarity Center office in Dhaka organized with its partners,
    including BCWS.
        \7\ See for example, this December 7, 2012, New York Times article:
    http://www.nytimes.com/2012/12/08/world/asia/pakistan-factory-fire-
    shows-flaws-in-monitoring.html.
        \8\ As printed on BSCI Web site; retrieved on June 5, 2013: http://
    www.bsci-intl.org/news-events/news.
        \9\ As reported on June 4, 2013, by the BBC: http://www.bbc.co.uk/
    news/uk-22777071.
                                     ______

    Written Testimony Submitted by Akramul Qader, Ambassador of Bangladesh
                              to the United States