[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

                               __________

       Printed for the use of the Committee on Foreign Relations




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


      Available via the World Wide Web: http://www.gpo.gov/fdsys/






                         U.S. GOVERNMENT PRINTING OFFICE 

86-346 PDF                     WASHINGTON : 2013 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Printing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001













                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






                                  


