Bangladesh Apparel Factory Collapse:
Background in Brief
Mary Jane Bolle
Specialist in International Trade and Finance
January 10, 2014
Congressional Research Service
7-5700
www.crs.gov
R43085

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Bangladesh Apparel Factory Collapse: Background in Brief

Summary
The April 24, 2013, collapse of an eight-story garment factory, called Rana Plaza, in Dhaka,
Bangladesh, resulted in the deaths of more than 1,100 workers. It is reportedly now considered
the deadliest accident in the history of the apparel industry. Congress has had a long-standing
interest in supporting internationally recognized worker rights in developing countries, and the
building collapse has raised concerns about worker conditions in Bangladesh.
Rana Plaza was allegedly structurally unsound and poorly maintained for apparel production.
Apparel production is generally known as an industry under threat of fire, and one where workers
need easy access to rapid escape routes. Issues relating to workers’ inability to effectively
exercise their rights to organize, bargain collectively, and work in a safe workplace may have
contributed to the tragedy. For example, workers reportedly noticed cracks in the building and
resisted entering, and were told that if they did not report to their jobs, they would not be paid.
The factory collapse brought international focus to those parts of global supply chains that may
not meet basic safety and health standards.
The U.S. government supports internationally recognized worker rights through various policies
and programs. These include U.S. trade preference programs, free trade agreements, foreign
assistance, and Department of Labor initiatives.
Congressional and U.S. efforts in this regard are part of an international worker rights support
structure in place to offer technical assistance and support to countries—especially developing
countries. Other major parts of this structure include international organizations, such as the
International Labor Organization (ILO), founded in 1919; and corporate codes of conduct, which
have arisen from a broader movement of corporate social responsibility that gained strength in the
1980s and 1990s.
Early analysis of the causes of the Bangladesh tragedy raises questions about what went wrong
and about what can be done to help Bangladesh to improve working conditions at factories.
Efforts to make changes in Bangladesh are already underway, and developments on this issue are
evolving.
This report provides an overview of the recent tragedy in Bangladesh and the Bangladesh
economic environment and culture. It also notes the responses to the tragedy, to date, from
Congress, the Administration, the ILO, the Bangladesh government, and the private sector.
Finally, it raises some possible issues for Congress.

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Bangladesh Apparel Factory Collapse: Background in Brief

Contents
Background and Overview .............................................................................................................. 1
ILO ............................................................................................................................................ 3
U.S. Trade Preference Programs................................................................................................ 5
Corporate Codes of Conduct ..................................................................................................... 5
U.S. and International Responses to the Bangladesh Tragedy ......................................................... 7
Congress .................................................................................................................................... 7
Executive Branch ....................................................................................................................... 7
Bangladesh Government ........................................................................................................... 9
ILO ............................................................................................................................................ 9
Private Sector........................................................................................................................... 10
Issues for Congress ........................................................................................................................ 11
Proposed Amendment to 2014 National Defense Authorization Act ...................................... 11

Figures
Figure 1. Map of Bangladesh ........................................................................................................... 1
Figure 2. Worker Rights Principles Included in ILO Core Labor Principles, U.S. Trade
Preferences and Agreements, and Some Private Sector Codes of Conduct .................................. 6

Tables
Table A-1. Comparison of Key Provisions of Bangladesh “Accord” and “Alliance” ................... 13

Appendixes
Appendix. ....................................................................................................................................... 13

Contacts
Author Contact Information........................................................................................................... 16
Acknowledgments ......................................................................................................................... 16

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Bangladesh Apparel Factory Collapse: Background in Brief

Background and Overview1
On April 24, 2013, Rana Plaza, an eight-story building, in Dhaka, Bangladesh, collapsed, killing
more than 1,100 garment workers. It brought international focus on portions of the global supply
chain. It also raised the issue of what might be done to improve working conditions, especially for
lower-wage workers in developing countries around the world.
Figure 1. Map of Bangladesh

Source: U.S. Department of State.
Notes: Bangladesh, about the size of Iowa, with a population half that of the United States, is tucked into to the
eastern end of India; it also borders Burma.
According to press reports, the day of the building collapse workers arrived and saw cracks in the
outside of the building where five manufacturing operations were trying to meet production
deadlines on apparel products for the U.S. and European Union (EU) markets.2 Reportedly,
management assured them that the building was safe, and told workers that they would not be
paid if they did not work. An hour later, the building collapsed. It has been labeled the deadliest
disaster in the history of the garment industry.3

1 For background on Bangladesh, see CRS Report R41194, Bangladesh: Political and Strategic Developments and U.S.
Interests, by Bruce Vaughn.
2 According to press reports, European retailers were the primary purchasers. H&M is reportedly the largest producer
of garments in Bangladesh. Source: “Global Retailers join Safety Plan for Bangladesh,” The New York Times, May 14,
2013, p. A1.
3 “17 Days in Darkness, a Cry of ‘Save Me’, and Joy,” The New York Times, Saturday, May 11, 2012, p. A1
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The Rana Plaza collapse took place five months after a December 17, 2012, fire at another
Bangladesh apparel factory, Tazreen Fashions Limited; the Tazreen fire killed 112 workers.4
Survivors reportedly stated that their managers locked one exit route and told workers that the fire
alarms were false, thereby delaying timely evacuation.5 The combined tragedies brought the six-
month total loss of life in Bangladesh in the garment sector to at least 1,200.
After the building collapse, reportedly, thousands of workers took to the streets and vandalized
vehicles and shops before being dispersed by police. Soon after that, the government initially shut
down 18 apparel factories, for safety reasons, as concerns about industrial safety across the
country continued to grow.6
Bangladesh’s major export is apparel, which, along with a small amount of textiles, accounts for
more than 80% of the country’s $23 billion in exports to the world in 2011, or nearly $20 billion.
(See the Text Box, “Bangladesh in Brief.”) As a result of the Rana Plaza building collapse, some
firms, such as Disney,7 have indicated they may no longer source production from Bangladesh,
largely due to concerns over their brand reputation. If this becomes a major trend, one
consequence could be that many women, who constitute 80% of the workers in the apparel sector,
could lose their jobs. These women, mostly Muslim, have found new independence and an
increased standard of living for their families, and have, in many cases, become primary
breadwinners. The effect on the economic structure of Bangladesh could be compounded by an
ongoing struggle between a secular Bangladeshi identity and a more fundamental/religious
Islamic identity.8
A number of factors may have led to the recent building collapse. Bangladesh’s economy is labor-
intensive, which attracts lower-wage and lower-skilled industries such as apparel. Bangladesh is a
densely populated country, where a population half the size of the United States is crowded into a
geographic area the size of Iowa. To meet increasing global demand for apparel production,
primarily by the United States and Europe, certain buildings may have been converted to multi-
story manufacturing operations. In many countries, apparel production is generally carried out in
one- or two-story buildings because of the inherent fire hazards associated with this production.
Three additional floors that reportedly were illegally constructed were added to the Rana Plaza.9
According to press reports, working conditions in Bangladesh were theoretically addressed, at
least in part, by Bangladesh labor laws and building codes, International Labor Organization
(ILO) commitments, codes of conduct held by multinational corporations, and GSP trade
preferences.

4 “Bangladesh Finds Gross Negligence in Factory Fire,” The New York Times, December 17, 2012.
5 U.S. Department of State, Country Reports on Human Rights Practices, Bangladesh, p. 39.
6 “Bangladesh Textile Factories Shut Amid Unrest,” BBC News, May 13, 2013.
7 Disney has announced it will leave Bangladesh and relocate elsewhere. Source: “Bangladesh Fears an Exodus of
Apparel Firms,” The New York Times, May 2, 2013.
8 See CRS Report R41194, Bangladesh: Political and Strategic Developments and U.S. Interests, by Bruce Vaughn.
9 “Western Firms Feel Pressure as Toll Rises in Bangladesh,” The New York Times, April 25, 2013.
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Bangladesh Apparel Factory Collapse: Background in Brief

ILO
Since 1972, Bangladesh has been a member of the International Labor Organization (ILO). The
ILO originated in 1919 as a tripartite organization comprised of workers, employers, and
governments, to promote “decent work” around the world. Under the 1998 ILO Declaration on
Fundamental Principles and Rights at Work, Bangladesh and all ILO members have an obligation
to uphold ILO core labor principles, simply by reason of their status as ILO members, even if
they have not ratified the conventions behind the principles. Bangladesh has, however, ratified
seven of the eight ILO conventions backing and defining the five core labor principles.10 These
principles are very similar to the U.S. list of internationally recognized worker rights.
These rights are the following:
1. freedom of association and the effective recognition of the right to collective
bargaining;
2. the elimination of all forms of forced or compulsory labor;
3. the effective abolition of child labor, including the worst forms of child labor;
and
4. the elimination of discrimination in respect of employment and occupation.11
Whether countries do or do not uphold ILO core labor principles, the ILO has no real
enforcement powers other than technical assistance, reporting requirements, publication of
information, and moral suasion. An example of ILO activities to enhance worker rights is the
Better Work Program, which is currently in place in Haiti and Cambodia. It is a joint program
with the World Bank that works with government officials, factory owners, and labor groups to
ensure safe and decent workplace conditions. It does not currently operate in Bangladesh. (See
section on ILO response.)
Figure 2, below, shows that the concepts of the ILO core labor principles promoted by the ILO-
World Bank Better Work program, plus the ILO occupational safety and health principle, are
included as U.S. internationally recognized worker rights, and are incorporated into some private
sector codes of conduct. Thus, Figure 2 shows graphically the extent to which similar sets of
rights extend through all three parts of the international worker rights support system.


10 Bangladesh approved the following conventions relating to ILO core labor principles: freedom of association and
right to organize: C87, 1972; C98, 1972; elimination of forced labor: C29, 1972; C105, 1972; abolition of child labor:
C138 (not approved by the Bangladeshi government); C182, 2001; and elimination of employment and occupational
discrimination: C100, 1998; C111, 1972.
11 While the ILO does not hold a core labor principle on occupational safety and health, this principle is included in a
larger list of nearly 200 ILO principles. The ILO also publishes background materials on fire risk management. See, for
example, the ILO booklet on Fire Risk Management, and its “Action Checklist Fire Safety,” available on the ILO
website at ilo.org.
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Bangladesh Apparel Factory Collapse: Background in Brief

Bangladesh in Brief
History and Government: The United States established diplomatic relations with Bangladesh in 1972, after its
independence from Pakistan through a 1971 war. Its government is a parliamentary democracy. The State
Department describes relations between the two countries as “excel ent,” reflecting “strong bonds of friendship and
shared values.” The CIA Factbook describes Bangladesh as being “poor, overpopulated, and inefficiently governed.”
(Sources: U.S. Department of State, U.S. Relations with Bangladesh, and CIA, The World Factbook.)
Geography and Population: Situated on the Ganges River Delta, on the Bay of Bengal, Bangladesh is mostly
surrounded by India, and is adjacent to Burma. Bangladesh’s population is about 164 million, half that of the United
States, crowded into a land mass slightly smaller than Iowa. Its capital is Dhaka, which has a population of about 14
million. (Source: CIA Factbook.)
Economy: Challenges to Bangladesh’s economy include having “political instability, poor infrastructure, corruption,
insufficient power supplies, and slow implementation of economic reforms.” In 2012, on a purchasing power parity
basis, its GDP was $306 billion, or $2,000 per capita, with nearly one-third of the population living below the poverty
line. Its labor force is divided into 45% in agriculture, 30% in industry, and 25% in services. Its average annual GDP
growth rate since 1996 is 5.8%. Its most important industries are jute, cotton, and garments. (Source: CIA Factbook.)
Trade and Investment: Bangladesh’s major export is apparel, which, along with a small amount of textiles,
accounts for more than 80% of the country’s $23 billion in exports to the world in 2011, or nearly $20 billion. It
represents an apparel export total that is fourth in the world, after China. The United States is Bangladesh’s largest
export market, accounting for nearly 20% of the country’s exports in 2011. In 2012, the United States imported $4.9
billion in goods from Bangladesh, of which $4.5 billion or 92% were textiles and apparel. U.S. exports to Bangladesh in
2012 totaled $502 million, led by cotton, machinery, and iron and steel. In 1989, the United States and Bangladesh
signed a bilateral investment treaty. World foreign direct investment in Bangladesh currently totals about $7.8 billion.
(Sources: CIA Factbook, Global Trade Atlas, and Department of Commerce, Office of Textiles and Apparel
(OTEXA.))
Labor: Bangladesh has a labor force of about 77 million (nearly half of its population), of which about 3.6 million-4.5
mil ion, depending on sources consulted, are apparel workers employed in nearly 4,500 manufacturing operations.
Minimum wages are $37 per month. Wages in export processing zones are typical y higher. The official
unemployment rate is about 5%, but about 40% of the labor force is underemployed. (Sources: State Department:
Country Reports on Human Rights Practices, 2012, and CIA Factbook.)
GSP Status: Bangladesh is listed as a designated “beneficiary developing country” under the Generalized System of
Preferences (GSP), and is therefore eligible for U.S. tariff preferences for certain products as long as it meets country
eligibility requirements, including worker rights criteria that require a country to have taken or be taking steps to
“afford internationally recognized worker rights” to its workers, including any in a designated zone. These core
worker rights are defined in Section 507(4) of the Trade Act of 1974 as (a) the right of association; (b) the right to
organize and bargain col ectively; (c) a prohibition on the use of forced or compulsory labor; (d) a minimum age for
the employment of children; and (e) acceptable conditions of workers with respect to minimum wages, hours of
work, and occupational safety and health. In 2012, U.S. GSP imports from Bangladesh totaled $35.4 mil ion, out of a
total import value of $4.9 billion. Apparel and textile products are largely excluded from GSP tariff-free benefits.
(Sources: Harmonized Tariff Schedule of the United States; Trade Act of 1974, P.L. 93-618 as amended, 19 U.S.C.
2461; and U.S. International Trade Commission (USITC) Trade Database.)
ILO Core Labor Principles: In 1972, a year after its independence from Pakistan, Bangladesh ratified six of the
eight ILO core labor conventions (discussed elsewhere in this report). According to the Department of State, the
most significant human rights problems in Bangladesh included poor working conditions and poor protection of labor
rights. Safety conditions at many workplaces were described as “extremely poor.” Enforcement of acceptable
conditions for workers was reportedly hindered by a lack of labor inspectors. However, because of high
unemployment and inadequate enforcement of laws, workers who demanded redress for dangerous working
conditions or who refused to work under hazardous conditions risked losing their jobs. (Sources: ILO, and State
Department, Country Reports on Human Rights Practices, p. 39.)
Brand Names: Brand name products produced in Bangladesh include H&M, C&A, Nike, Reebok, GAP, JCPenney,
Walmart, Kmart, Wrangler, Dockers, Tommy Hilfiger, Adidas, Eddie Bauer, Eagle, and American Eagle. (Source:
Bangladesh Export Processing Zones Authority.)

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Bangladesh Apparel Factory Collapse: Background in Brief

U.S. Trade Preference Programs12
One area of congressional focus in supporting internationally recognized worker rights has been
through provisions in U.S. trade preference programs. These were first introduced in the
Generalized System of Preferences (GSP) program in 1985.13 GSP provides unilateral U.S. tariff
preferences for certain products exported by developing countries, to support their economic
development. Under GSP, and later introduced in other trade preference programs, the President
or his designee is prohibited from designating certain countries as eligible for GSP benefits, based
on different criteria, including that a country “has not taken or is not taking steps to afford
internationally recognized worker rights.”14 These worker rights are defined as
1. the right of association;
2. the right to organize and bargain collectively;
3. a prohibition on the use of any form of forced or compulsory labor;
4. a minimum wage for the employment of children; and protection against the
worst forms of child labor;15 and
5. acceptable conditions of work with respect to minimum wages, hours of work,
and occupational safety and health.
On the basis of these criteria, effective September 3, 2013, the Obama Administration suspended
GSP status for Bangladesh, with no timeline for its possible reinstatement.16 However, that
decision was followed by the USTR release of a “Bangladesh Action Plan 2013,” outlining a
basis for the eventual reinstatement of GSP status for Bangladesh. (For further discussion of the
GSP suspension, and Action Plan, see the following section on “U.S. and International Responses
to the Bangladesh Tragedy,” under “Executive Branch.”)
Corporate Codes of Conduct17
Since the 1980s and 1990s, when globalization accelerated and various interest groups began to
publicize “bad actors” on worker rights conditions in factories, corporations have increasingly
adopted and publicized corporate codes of conduct. Most, if not all, large multinational
corporations sourcing apparel from Bangladesh have posted such codes on their websites. These
codes may describe the standards to which the business holds its employees, its suppliers under
contract, and sometimes its subcontractors. These codes specify worker rights protections and
structural and fire hazard standards to varying degrees. A concern raised by some groups is that

12 Issues in this section are also addressed in U.S. free trade agreements, which are not addressed in this report because
the United States does not have a free trade agreement with Bangladesh.
13 For more information on the GSP program, see CRS Report RL33663, Generalized System of Preferences:
Background and Renewal Debate, by Vivian C. Jones.
14 Among other criteria, there is a waiver of presidential authority based on U.S. national economic interest.
15 These include the employment/use of children for purposes relating to armed conflict, drug trafficking, sex
trafficking, or pornography.
16 Federal Register, Proclamation 8997 to Modify Duty-Free Treatment Under GSP, and for other Purposes, July 2,
2013. However, the entire U.S. GSP program expired July 31, after Congress did not renew it.
17 For an overview of corporate codes of conduct, see CRS Report RS20803, Codes of Conduct for Multinational
Corporations: An Overview, by James K. Jackson.
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corporations may contract directly with suppliers, yet have limited knowledge of the conditions
under which the products are produced by subcontractors. Corporate codes of conduct are
voluntary on the part of corporations.
The Rana Plaza collapse has focused greater attention on the worker conditions and laws in
Bangladesh, and may impact Bangladesh’s continued role as a major supplier of apparel, due to
corporate buyer concerns over branding and reputation. Key issues may include whether firms
will continue to source apparel from Bangladesh, or whether firms will engage more proactively
to improve conditions there, as well as the extent to which corporate codes of conduct have been
helpful.18
A number of interested parties, including parties in Europe and the United States, among them
President Obama, and a number of Members of Congress, are calling for U.S. and European
companies and other stakeholders to work together to solve the problems. (See section below.)
Figure 2. Worker Rights Principles Included in ILO Core Labor Principles,
U.S. Trade Preferences and Agreements, and Some Private Sector Codes of Conduct
Private Sector Codes of
U.S. Trade and
Conduct
Investment Laws
ILO
• ILO Core Labor
• Internationally
Core Labor Principles
Principles
Recognized
• U.S. internationally
Worker Rights:
• Freedom of association and right to
recognized worker
organize
rights
ƒ right to organize,
• Corporate standards
and bargain
• Elimination of forced labor
collectively
ƒ prohibition of
• Abolition of child labor
forced labor
ƒ protections for
• Elimination of employment and
child labor
occupational discrimination
ƒ acceptable
Other
conditions re:
• Acceptable conditions of work pertaining
minimum wages,
to occupational safety and health
hours, and
occupational
safety and
heealth

Source: Graphic prepared by CRS.

18 Disney has announced it will leave Bangladesh and relocate elsewhere. Source: “Bangladesh Fears an Exodus of
Apparel Firms,” The New York Times, May 2, 2013.
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U.S. and International Responses to the
Bangladesh Tragedy
Response to the Bangladesh tragedy has come from Congress, the Administration, the Bangladesh
government, the ILO, and the private sector, and continues to evolve. This section briefly
describes recent, somewhat overlapping, developments.
Congress
Soon after the Rana Plaza collapse, some Members of Congress encouraged businesses and other
stakeholders to work together to improve conditions for workers in Bangladesh. On May 1, 2013,
for example, Representatives Sander Levin, ranking Member of the House Ways and Means
Trade Subcommittee, and George Miller, ranking Member of the House Education and the
Workforce Committee, sent a letter to President Obama, urging the Administration to convene
representatives of European and American retailers, the Bangladesh garment industry (including
their workers and unions), the Bangladeshi government, the ILO, and non-governmental
organizations, to facilitate development of a “concrete action plan” to address the range of issues
relating to working conditions and worker rights in the garment sector.19
In addition, a group of 8 U.S. Senators, led by Senators Harry Reid and Sherrod Brown, and a
group of 10 Representatives, led by House Minority Leader Nancy Pelosi and House Minority
Whip Steny Hoyer, wrote letters to major retailers encouraging them to join efforts to improve
fire and building safety in Bangladesh apparel factories.20 21 Two major stakeholder efforts have
resulted: the “Accord on Fire and building Safety in Bangladesh,” signed predominantly by
European, plus a few U.S. retailers and brands; and the “Alliance for Bangladesh Worker Safety,”
signed predominantly by large North American retailers and brands. (See further discussion
below under “Private Sector”.)
Executive Branch
State Department, USTR, and Labor Department Response: On May 8, 2013, the State
Department, Department of Labor, and USTR convened a conference call with U.S. corporate
“buyers” (retailers and brands sourcing in Bangladesh’s garment industry). In that call, they

19 House Ways and Means Committee, “Levin, Miller Urge Action on Bangladeshi Worker Rights, Working
Conditions,” May 1, 2013. The Worker Rights Consortium, a labor rights monitoring group, estimates that it would
cost $600,000, on average, to elevate each of Bangladesh’s nearly 5,000 factories to western safety standards, for a
total of $3 billion. This $3 billion can be compared against a Bangladesh world export market of about $20 billion in
2011. Source: “How to Fix Bangladesh’s Factories,” Bloomberg Businessweek, May 12, 2013.
20 The other signatories of the letter are Senators Harkin, Durbin, Levin, Leahy, Murray, and Rockefeller. The letters
were sent to the following retailers: the Cato Corporation, Walmart, Sears, Kohl’s Target, Macy’s JCPenney, Gap,
Mango, George Westin Limited, VF Corporation, The Children’s Place Stores, and Corte Ingles. Source: “Reid,
Brown, Six Other Senators Call on Retailers to Sign Accord Guaranteeing Worker Safety in Bangladesh,” World Trade
Online, May 16, 2013.
21 “House Dems, Faith Groups join Chorus Calling For U.S. Retailers to Sign Bangladesh Worker Safety Accord:
Letter from 10 House Democrats,” World Trade Online, May 16, 2013. Additional signatories are Representatives
Sander Levin, George Miller, Lewis, Schakowsky, DeLauro, Becerra, Crowley, and Michaud. The U.S. retailers are
The Gap, JC Penney, The Children’s Place, Walmart, Target, Kohl’s, VF Corporation, Macy’s, and Sears/Kmart.
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“strongly urged” these major corporations to coordinate efforts with each other, and with the
government of Bangladesh, the Bangladesh Garment Manufacturers and Exporters Association
(BGMEA), civil society, and labor groups to (a) help pay for independent safety and fire
inspectors; (b) communicate to the Bangladeshi government their concerns about labor
conditions; and (c) urge immediate passage of labor law amendments to lay the basis for the
establishment of an ILO/World Bank Better Work Program for Bangladesh.22
On June 13, 2013, the Department of Labor’s Bureau of International Labor Affairs (ILAB)
announced that a competitive grant of $2.5 million would be awarded to recipient(s) who would
work to (1) strengthen the Bangladesh government’s ability to improve and enforce fire and
building safety standards; and (2) build the capacity of worker organizations to effectively
monitor violations of such standards and abate hazards in the ready-made garment sector.23
GSP Suspension for Bangladesh: The decision to suspend GSP status for Bangladesh, effective
September 3, 2013, with no timeline for restoring it was made after the GSP Trade Policy Staff
Committee held hearings in March of 2013, in response to an AFL-CIO petition first submitted in
2007 and updated in 2012, after the Tazreen fire.
Implications from the GSP suspension are yet to be determined. The GSP program excludes from
eligibility most apparel and textile articles (and other import sensitive products), which constitute
92% of Bangladesh’s exports to the United States. Therefore, the decision has little effect on U.S.
tariffs on apparel imports, which reportedly average about 16%.24 On the other hand, some
businesses might decide to pull out of Bangladesh for fear that their reputation could be damaged
by association with a country that has lost its GSP status for reasons relating to internationally
recognized worker rights. If that were to happen, some argue, it could significantly reduce
Bangladesh’s apparel-making labor force and adversely impact its economy.
The USTR’s “Bangladesh Action Plan 2013,” released to the public on July 19, 2013, outlined a
basis for possible eventual reinstatement of GSP status for Bangladesh.25 Its directives encompass
Bangladesh’s own “National Tripartite Plan of Action (NTPA) on Fire Safety and Structural
Integrity,” for the garment sector of Bangladesh (discussed further below under the “Bangladesh
Government.”) The USTR Action Plan for Bangladesh, among other things, set forth guidelines
for government inspections, labor law reforms, the protection of unions from anti-union
discrimination and reprisal, and the extension of freedom of association and collective bargaining
rights to export processing zones.

22 U.S. Department of State, “State Department Call With U.S. Buyers in Bangladesh Ready-Made Garment Sector,”
May 8, 2013; and “State Department Bureau of International Information Programs, Bangladesh, Private Partners Work
to Improve Worker Safety,” May 9, 2013.
23 “Labor Dept. Offers $2.5 Million in Grants to Improve Will Fund Projects to Improve Bangladeshi Factory
Conditions,” by Niraj Chokshim National Journal, Government Executive, June 13, 2013.
24 Source of data: U.S. International Trade Commission (USITC) Dataweb. While one option might involve oversight
on possible suspension of GSP status for Bangladesh, as the USTR is considering, some experts have suggested
considering, as an alternative, extending tariff-free treatment for apparel, to Bangladesh, perhaps in conjunction with a
proposed ILO Better Work Bangladesh program under consideration. See “How to Avoid Another Bangladesh Factory
Disaster,” by Kimberly Elliot, Center for Global Development, May 7, 2013.
25In the past, the USTR has suspended GSP status for worker rights issues, including for Burma.
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Bangladesh Government
The Bangladesh government response after the tragedy was to work with the ILO on identifying
changes needed. The NTPA, (mentioned in the above paragraph), is the most recent result. It is a
consolidation of two earlier tripartite plans. It focuses on legislation and policy, administration,
and practical activities to improve safety in apparel factories. On July 15, 2013, the Bangladesh
Parliament approved some changes to its labor laws. These changes were designed to (1) make it
easier for workers to form labor unions; (2) increase severance and retirement payments for
workers with longer tenures; and (3) equalize, for all workers, annual payments under a welfare
fund. In addition, the government reportedly plans to add 200 factory inspectors within six
months, and to complete a comprehensive safety assessment (extending to fire and structural
safety) of all export-oriented garment factories.26 The government has also been negotiating a
new minimum wage for garment workers, who have been protesting against low wages in light of
recent inflation. The protesters have sought an increase in the minimum wage from the U.S.
equivalent of $38 to $104 per month.27 Effective December 1, 2013, the Bangladeshi government
raised the minimum wage for the country’s garment workers by 77% to $68 per month.28
ILO
After initial review of the Bangladesh labor law amendments, the ILO stated that the new law
“did address some of the ILO’s specific concerns, while falling short of several important steps
called for by the ILO supervisory system to bring the law into conformity with ratified
international labor standards.” For example, the ILO noted that major areas remaining to be
addressed include (1) a 30% minimum membership requirement to form a union; and (2) the fact
that many collective bargaining rights are not extended to workers in export processing zones,
which reflect heavy foreign investment.29
Additionally, the ILO is participating in (1) a three-year program on “Improving Working
Conditions in the Ready-Made Garment Sector” to support implementation of the NTPA;30 and
(2) the 2013 European Union (EU)-Bangladesh-ILO “Sustainability Compact for Continuous
Improvements in Labor Rights and Factory Safety in the Ready-Made Garment and Knitwear
Industry in Bangladesh.” Previously, in 2012, the ILO and the World Bank International Finance
Committee (IFC) were involved in a nine-month “participatory design phase,” toward
implementation of a “Better Work Program for Bangladesh.”31 However, the ILO/World Bank

26 “Bangladesh to Reform Labour Laws After Tragedy,” Financial Times, May 6, 2013, p. 4; “Bangladesh Factory Toll
Passes 800—Government Shuts 18 Sites for Safety Improvements, but No Big Outflow of U.S. Companies Seen,”
The Wall Street Journal, May 9, 2013; and “Global Retailers Join Safety Plan for Bangladesh; Will Pay for Changes,”
The New York Times, May 14, 2013.
27 “Bangladesh Garment Protests Enter Fourth Day,” by Arun Devanth, Bloomberg, September 24, 2013.
28 “Bangladesh Raises Minimum Wage for Garment Workers After Unrest,” by Arun Devnath, Bloomberg.com,
November 14, 2013, and “Bangladesh Factory Owners Wary of Wage Increase,” Wall Street Journal, December 4,
2013.
29 ILO, “ILO Statement on Reform of Bangladesh Labor Law, July 22, 2013”.
30 Ibid. See also, “Conclusions of the I LO’s High Level Mission to Bangladesh.” May 4, 2013. The original effort to
assist Bangladesh after the Rana Plaza collapse was jointly sponsored by the ILO and the International Finance
Committee (IFC), a member of the World Bank Group.
31 This program unites the expertise of the I LO in labor standards with that of the World Bank’s IFC in private sector
development.
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ultimately declined to permit Bangladesh to join the textile industry-monitoring program until the
country overhauled its labor laws, and conditions for unions improved.32
Private Sector
Private sector responses to the Bangladesh tragedy have varied. According to press reports,
retailers and some apparel firms have acknowledged their links to unsafe Bangladesh factories,
while others have hedged.33 Another private sector response has been for businesses to debate
whether to leave Bangladesh and relocate to countries with fewer high-visibility labor issues, or
stay and help solve them in Bangladesh. Some companies, including Disney, as previously
mentioned, are considering not sourcing from Bangladesh for a number of reasons, including
concerns about their business reputation.34
A broader response from many corporations, particularly in Europe, has been to join forces to
support change in Bangladesh. After the building collapse, officials from two dozen retailers and
apparel companies met with representatives from the German government to try to negotiate a
plan to ensure safety at roughly 4,500 garment factories in Bangladesh.35 On May 13, 2013,
several of the world’s largest apparel companies agreed to a legally binding “Accord on Fire and
Building Safety in Bangladesh” to help pay for fire safety and building improvements there.36 It
requires a five-year commitment from participating retailers to conduct independent safety
inspections of factories, and pay up to $500,000 per year toward safety improvements. More than
100 mostly European corporations have signed onto the accord, including Swedish retail giant
H&M (the largest producer of apparel in Bangladesh); Inditex, headquartered in Spain; C&A, a
Dutch retailer; and Primark and Tesco (British retailers). U.S. signatories include PVH, the parent
company of Calvin Klein, Tommy Hilfiger, and Izod, which has signed on to the five-year plan,
contributing $2.5 million; and Abercrombie and Fitch.37
Other U.S. companies that resisted signing, objecting to the agreement’s legally binding nature,
have formed a separate group, the “Alliance for Bangladesh Worker Safety.” The alliance was
organized under the Bipartisan Policy Center (BPC), by former Senate Majority Leader George
Mitchell and former Senator Olympia Snowe. Corporate members of the Alliance have pledged
over $100 million in capital to support remediation of factories. In addition, $42 million raised for
the Worker Safety Fund reflects a tiered fee structure for members based on exports of apparel
products from Bangladesh. The group was founded by 17 North American apparel retailers and

32 ILO, “Better Work Bangladesh – Design Phase,” January 5, 2012; and “Bangladesh is Barred from Textile Safety
Group,” The Washington Post, May 18, 2013.
33 “After Disaster, PR Tactics Vary; Some Clothing Firms Quickly Concede Links to Unsafe Bangladesh Factory.
Others Hedge,” Los Angeles Times, May 9, 2013.
34 “Bangladesh Fears an Exodus of Apparel Firms,” The New York Times, May 2, 2013.
35 “Some Retailers Rethink Their Role in Bangladesh,” The New York Times, May 1, 2013.
36 The Accord was created by the IndustriALL Global Union and the UNI Global Union together with non-
governmental organizations the Clean Clothes Campaign and the Worker Rights Consortium
37 “Global Retailers Join Safety Plan for Bangladesh,” The New York Times, May14, 2013, p. A1. Bangladesh Factory
Safety Accord: At Least 14 Major North American Retailers Decline to Sign, The Huffington Post, May 17, 2013. See
also “H&M, Primark, Others Sign Legally Binding Agreement on Building, Fire Safety In Bangladesh: Reactions:
Walmart; The Gap,” Inside U.S. Trade, May 14, 2013.
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brands, including Gap, J.C. Penney, Jones, Kohl’s, L.L. Bean, Macy’s Nordstrom, Sears, Target,
VF Corporation, and Wal-Mart.38 (See Appendix Table A-1 for a comparison of the two plans.)
Issues for Congress
Congressional options relating to the Rana Plaza collapse may cover a range of issues, including
allowing the situation to resolve itself. Broadly speaking, Congress may wish to conduct
oversight and examine a comprehensive effort by the international community to support change
in Bangladesh.
Key questions for Congress include the following:
• Is the ILO/World Bank Better Work program an effective approach, and has it
been implemented successfully in other countries? Can it be expedited for
Bangladesh?
• Should GSP eligibility for Bangladesh be reconsidered? Conversely, should tariff
benefits for apparel be extended to Bangladesh to support it in improving the
safety conditions of its workers?39 Are there other steps the U.S. government
should take?
• Have corporate codes of conduct been helpful?
• Will the Bangladesh Parliament approve the proposed changes that the ILO has
recommended, and if so, will the ILO monitor their implementation?
• What are possible unintended consequences for Bangladeshi apparel workers if
action leads to a decline in the apparel industry?
Proposed Amendment to 2014 National Defense Authorization Act
Leading up to passage of the 2014 National Defense Authorization Act,40 the House bill contained
a provision (§ 634) that would have required the defense commissary system and the exchange
store system to (a) comply with requirements of the Bangladesh Accord; and (b) in its purchases,
give preferences to signatories of the Accord. In addition, the Department of Defense would have
been required to notify Congress of garments sold in defense commissaries or exchanges that did
not comply with these requirements (i.e., were manufactured by non-signatories). The final
agreement did not include these provisions.41

38 Bipartisan Policy Center, “Alliance of Leading Retailers in North America Join Forces in Comprehensive, Five-Year
Commitment to Improve Factory Safety Conditions for Workers in Bangladesh,” July 10, 2013.
39 While one option might involve possible suspension of GSP status for Bangladesh, as the USTR is considering, some
experts have also suggested as an alternative extending tariff-free treatment for apparel to Bangladesh, perhaps in
conjunction with a proposed ILO Better Work Bangladesh program under consideration. See “How to Avoid Another
Bangladesh Factory Disaster,” by Kimberly Elliot, Center for Global Development, May 7, 2013.
40 H.R. 3304, P.L. 113-66, December 26, 2013.
41 World Trade Online, “2014 Senate Version NDAA Includes Provision for New Export Strategies to Africa, Excludes
House Bangladesh Amendment,” December 18, 2013.
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The House sponsors42 of the amendment noted in a joint statement that garments and documents
with U.S. Marine insignia were found in the rubble in the November 2012 Bangladesh Tazreen
Fire. Data indicated that the Army-Air Force Exchange, a military retailer, imported 124,000
pounds of garments from several factories in Bangladesh. The sponsors argued that “as a huge
purchaser of garments, the U.S. military should not be complicit” in putting the lives of
Bangladesh workers at risk.43

42 House sponsors were Rep. George Miller, ranking member of the House Education and the Workforce Committee,
and Rep. Jan Schakowsky.
43 Ibid. See also, World Trade Online, “Amendment Pressures Military Retailers to Back Bangladesh Accord,” June 20,
2013.
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Appendix.
Table A-1. Comparison of Key Provisions of Bangladesh “Accord” and “Alliance”
(See table notes for definitions of source abbreviations.)
Alliance for Bangladesh Worker
Accord on Fire and Building
Safety:
Subject
Safety in Bangladesh: “Accord”
“Alliance”
Overview
Signatories
At least 100 signatories including the
At least 26 signatory companies
fol owing unions: IndustriALL Global
including Gap, Wal-Mart, Target,
Union and UNI Global Union; NGOs: Sears, Macy’s Nordstrom, J.C.
Clean Clothes Campaign, and
Penney, L.L. Bean, VF Corporation,
Worker Rights Consortium;
and Costco. These 20 companies
European corporations; and at least
account for the “overwhelming
four U.S. corporations, which include
majority of ready-made garments in
PVH Corp., parent company of
the U.S. imports from Bangladesh”
Calvin Klein, Tommy Hilfiger, and
(Overview, p. 3).
Izod; Abercrombie and Fitch; Sean
Jean Clothing; and American Eagle
Outfitters.
General Commitment
To establish a fire and building safety
A “binding, five-year undertaking to
program in Bangladesh for a period of share knowledge, experiences, and
five years—a program that will
best practices” (with exceptions
finance and implement a number of
below).
elements (p. 1).
(Alliance Members’ Agreement
(MA), p. 14, ¶9.1),

Signatories may resign from certain
Members may resign from the
sourcing relationships after two years program after two years with no
under certain conditions (Accord,
financial penalty (MA, p. 14, ¶9.1).
p.6, ¶23).
Governance
The program is governed by the 7-
The program is run by the 9-
member Steering Committee (SC):
member Board of Directors:
-3 seats chosen by trade union
-4 company representatives;
signatories;
-4 stakeholder representatives with
-3 seats chosen by businesses;
qualifications in: worker safety,
-plus a neutral chair chosen by and
human rights, anti-corruption, labor,
representing the International Labor
development, international
Organization (ILO).
diplomacy, governance, or supplier
interests in Bangladesh, and
-an elected Board chair (Overview,
p. 4).

Administrative activities of the SC
Administrative activities include
include management, and oversight of support for third-party training,
financing, and the work of the Safety
inspections, worker empowerment,
Inspector and the Training
and for workers temporarily
Coordinator (p. 2, ¶4).
displaced due to factory remediation
activities. (MA, p. 3, ¶2.2).
Dispute Settlement
Three steps:
Members agree to the financial
(1) Any dispute between parties
commitments and components of
under this agreement shall be decided the worker safety program.
by a majority vote of the Steering
Committee;
Noncompliance for delinquent
(2) Decisions may be appealed to a
companies can result in binding
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Alliance for Bangladesh Worker
Accord on Fire and Building
Safety:
Subject
Safety in Bangladesh: “Accord”
“Alliance”
final and binding arbitration process;
arbitration. Possible action for non-
(3) The arbitration decision is
compliance includes termination of
enforceable in a court of law in the
membership in the Alliance
domicile of the signatory against
(Overview, p. 5).
whom enforcement is sought.
Specific Commitments
Financing
Signatories contribute to two basic
Signatories contribute to two funds:
funds:
-The “Worker Safety Fund” for
-For administrative activities through
administrative activities including
share contributions based on annual
inspections, training, worker
volumes of garment production in
empowerment, and assistance to
Bangladesh, subject to a maximum
temporarily displaced workers,
contribution of $500,000 per year (p. through a tiered fee structure.
6, ¶24).
Maximum contribution $1million per
year. The fund is currently valued at
over $42 million (MA, p. 2, ¶2.2).

-For financing remediation required
-The “Affordable Capital for Building
of their suppliers in Tier 1 and Tier 2
Safety,” fund is designed to provide
factories (covering 65% of their
suppliers with access to affordable
production in Bangladesh) through
loans to finance needed factory
joint investments, loans, accessing
repairs and/or improvements (MA,
donor or government support,
p.4, ¶2.3.1).
business incentives, or direct
payment (p. 6, ¶22).
The Alliance reports that it currently
has pledges of at least $100 million.

Signatories are committed to
Signatory members may resign from
continue business at Tier 1 and Tier
the Alliance program after two years
2 factories for the first two years,
without financial penalty (MA, p. 14,
generally speaking. After that, they
¶9.1-9.4).
may resign from these sourcing
relationships without penalty (p.6
¶23).
Inspections
Each signatory company shall require
Members have self-imposed
that its suppliers in Bangladesh
deadlines for meeting inspection
participate fully in the inspection and
requirements (Alliance Overview, p.
remediation, activities. If a supplier
5).
fails to do so, the signatory will
promptly implement a notice and
Inspections are to be carried out by
warning process leading to
members or their representatives
termination of the business
and/or by independent qualified
relationship if these efforts do not
inspectors (MA, p. 9, ¶6.1).
succeed (p. 5, ¶21).

Signatories shall require factories to
Each member will be responsible for
implement corrective actions
developing its own approach to
identified by the Safety Inspector (p.
addressing its relationship with
1).
factories deemed “At-Risk” (MA p
10, ¶6.2(1))
Training
Signatory companies shall require
Members commit to providing safety
their suppliers to provide factory
and empowerment training for 100%
access to safety training teams
of factories in the members’
designated by the Training
respective supply chains (MA, p. 1).
Coordinator. Such teams shall include
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Alliance for Bangladesh Worker
Accord on Fire and Building
Safety:
Subject
Safety in Bangladesh: “Accord”
“Alliance”
safety training experts as wel as
qualified union representatives (p. 4,
¶16).
Worker Protections
Maintain employment relationship
10% of the worker safety fund will
and income: Signatories shall require
be reserved to support temporarily
supplier factories to maintain
displaced workers due to factory
workers’ employment relationship
remediation (MA, p. 3, ¶2.2).
and regular income while the factory
is closed for such renovations for up
to six months. If the supplier fails to
do so, the signatory shall implement a
notice and warning process that may
lead to termination of the business
relationship (p. 4, ¶16 and p. 5, ¶21).

Offer of employment: Signatory
In the event of a fire or safety
companies shall make reasonable
emergency, the Executive Director
efforts to ensure that any workers
(of the Board) will convene affected
whose employment is terminated as a members to coordinate a response
result of loss of factory orders are
on the transition for such displaced
offered employment with safe
workers and/or aid to victims of
suppliers (p. 4, ¶14).
such an emergency, (MA, p. 3,
2.2(b)(i )).

Right to refuse work: Signatories shall Members are committed to
require their supplier factories to
empower workers to communicate
respect the right of a worker to
their factory fire and building safety
refuse work, or to refuse to enter or
concerns, without risk of retaliation,
remain in a building, under conditions to the Alliance or to an independent
they justifiably believe are unsafe,
third party acting on behalf of the
without suffering loss of pay, (p. 4,
Alliance, through face-to-face
¶15).
interaction, or hotlines, and
indirectly through random sampling.
(Overview, p. 3; MA, p. 1 and p. 6,
¶3.2(a)).

Signatory companies shall require
Worker participation committees
worker/management health and
will be created at every Alliance
safety committees in all Bangladeshi
member factory, subject to
factories and they shall function in
Bangladeshi law. (Overview, p. 6).
accordance with Bangladeshi law (p.
4, ¶17).
Sources: Accord on Fire and Building Safety in Bangladesh; The Alliance for Bangladesh Worker Safety, “Statement of
Purpose and Action Plan” and “Overview”, and “Members Agreement” (MA).




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Author Contact Information
Mary Jane Bolle
Specialist in International Trade and Finance
mjbolle@crs.loc.gov, 7-7753

Acknowledgments
Special thanks to the following for assistance in this report: Cortney E. Dell, Shayerah Ilias Akhtar, Mary
A. Irace, J. F. Hornbeck, Wayne M. Morrison, Ronald O’Rourke, Bruce Vaughn, Mallary A. Stouffer, and
Sandra Edwards.

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