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Cablegate: Bangladesh - Ustr Delegation Finds Some Progress On Labor

VZCZCXRO7260
RR RUEHBI RUEHCI RUEHDE
DE RUEHKA #0512/01 1281050
ZNR UUUUU ZZH
R 071050Z MAY 08
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC 6734
INFO RHEHAAA/WHITE HOUSE WASHINGTON DC
RUEHC/DEPT OF LABOR WASHDC
RUEHAD/AMEMBASSY ABU DHABI 0984
RUEHTA/AMEMBASSY ALMATY 0155
RUEHAM/AMEMBASSY AMMAN 0122
RUEHAH/AMEMBASSY ASHGABAT 0235
RUEHBJ/AMEMBASSY BEIJING 0663
RUEHEK/AMEMBASSY BISHKEK 0125
RUEHLM/AMEMBASSY COLOMBO 8432
RUEHDO/AMEMBASSY DOHA 0223
RUEHDBU/AMEMBASSY DUSHANBE
RUEHIL/AMEMBASSY ISLAMABAD 2160
RUEHKT/AMEMBASSY KATHMANDU 9668
RUEHKL/AMEMBASSY KUALA LUMPUR 0321
RUEHNE/AMEMBASSY NEW DELHI 0634
RUEHMK/AMEMBASSY MANAMA 0213
RUEHMS/AMEMBASSY MUSCAT 0071
RUEHNT/AMEMBASSY TASHKENT 0233
RUEHCI/AMCONSUL KOLKATA 1282
RUEHBI/AMCONSUL MUMBAI 0316
RUEHDE/AMCONSUL DUBAI 0869

UNCLAS SECTION 01 OF 03 DHAKA 000512

SENSITIVE
SIPDIS

WH FOR USTR: CLAUDIO LILIENFELD, AARON ROSENBERG
DEPT FOR: USAID, SCA/RA, SCA/PB, EB, DRL, G, IWI
LABOR FOR TIM WEDDING AND RACHEL RIGBY

E.O. 12958: N/A
TAGS: ELAB PHUM ETRD KWMN SMIG KFRD BG
SUBJECT: BANGLADESH - USTR DELEGATION FINDS SOME PROGRESS ON LABOR
ISSUES

REF: SECSTATE 10011

SUMMARY
-------

1. (SBU) An interagency delegation led by the Office of the U.S.
Trade Representative (USTR) found some progress on labor issues in
Bangladesh during a recent visit but noted areas where further
improvements are needed, particularly in the Ready-Made-Garment
(RMG) sector operating outside Bangladesh's Export Processing Zones.
The visit, which focused on concerns raised in the AFL-CIO's GSP
petition, also highlighted limitations of Bangladesh's Caretaker
Government in addressing labor issues. Representatives of
Bangladesh's shrimp and fish industry explained how they are
attempting to solve problems in the aquaculture sector identified by
the petition. End Summary.

2. (U) A USTR-Department of Labor delegation recently visited Dhaka
to meet government, industry, and labor group representatives to
discuss progress on labor rights issues, pursuant to a review based
on a Generalized System of Preferences (GSP) petition filed by the
AFL-CIO in 2007. Led by Aaron Rosenberg, Deputy Assistant US Trade
Representative for Labor Affairs, the delegation included Timothy
Wedding (Division Chief, Trade Policy and Negotiations, Department
of Labor) and Adina Adler (USTR Director for South Asia). The
delegation also addressed intellectual property rights (IPR) issues
and discussed the current status of the US-Bangladesh Trade and
Investment Framework Agreement (TIFA) which will be reported
SEPTEL.

LABOR AND INDUSTRY STAKEHOLDERS: CONTRASTING PERSPECTIVES
-------------------------- ------------------------------

3. (SBU) In a meeting organized by the American Center for
International Labor Solidarity (ACILS), local labor groups
acknowledged recent progress in Bangladesh's Export Processing Zones
(EPZs). However, labor leaders expressed concerns about continuing
grievances in the ready-made garment (RMG) sector outside the EPZs,
specifically regarding the termination of workers without cause. One
worker estimated that 60 percent of factories outside the EPZs pay
minimum wages, but he was only referring to the least skilled
workers, (different minimum wages apply to workers at other skill
levels, for which compliance data was not available). In a separate
meeting, RMG industry representatives claimed continued progress on
labor issues, citing statistics of 98 percent compliance with
minimum wage laws, a figure at odds with worker claims.

4. (U) The industry representatives described efforts to comply with
customers' compliance programs, including those of U.S. buyers, as
well as initiatives to train factory managers. The participants
expressed concern about how to attract additional investment to
Bangladesh, repeatedly mentioning their interest in securing
duty-free access for RMG exports to the US market through the New
Partnership for Development Act currently pending before Congress.


5. (SBU) Shrimp and frozen fish industry representatives
acknowledged U.S. labor concerns as valid and outlined the ways in
which they are trying to address the problem. They claimed that
child labor was largely absent from processing and packaging
factories but conceded that at the farm level (lower in the supply
chain) child labor existed. (Note: This is consistent with general
trends in Bangladesh's informal and agricultural sector, End Note).
The industry leaders said they expected further growth in exports
and appeared eager to improve social compliance efforts, as well as

DHAKA 00000512 002.2 OF 003


to address labor issues lower in the supply chain.

VISIT TO THE DHAKA EXPORT PROCESSING ZONE
-----------------------------------------

6. (SBU) The delegation had a frank discussion with then Executive
Chairman of the Bangladesh Export Processing Zones Authority (BEPZA)
Brigadier General Abdullah Ashraf Yussuf. Yussuf recounted his
efforts to implement the EPZ Workers' Association and Industrial
Relations Act (EWAIRA). Although the establishment of labor
tribunals - a critical unimplemented measure of EWAIRA highlighted
in the GSP petition - was not within his authority, he said he
expected it could occur within the next few months. Alternatively,
existing labor courts could be authorized to take on the labor
tribunal function. He agreed that full implementation of EWAIRA was
required and was positive about the long-term possibility for
harmonizing labor laws, i.e. the application of the national labor
laws to the EPZ.

7. (SBU) Regarding labor unrest in the EPZs, the Executive Chairman
conceded that initially (over a year ago) there was a credible basis
for worker unrest - non payment of wages was a problem, and 90% of
the factories were not paying on time, or according to minimum
wages. During his tenure, however, he said he had worked to ensure
compliance with applicable laws.

8. (SBU) During a tour of the Dhaka EPZ, the delegation observed
workers association elections. It was clear that the EPZ authority
had actively facilitated formation of workers associations through
provision of election assistants, ballot boxes, etc. The delegation
also met with the EPZ's labor counselors, who discussed complaints
they received from workers, many of which concerned holiday and
maternity leave.

9. (SBU) An unresolved issue was whether NGOs and organizations like
the Solidarity Center are permitted to work with EPZ workers.
Representatives of a Korean investor and the Ministry of Commerce
said outside groups (including the Solidarity Center) were not
allowed to work with (e.g., assist in unionizing) EPZ workers.
Conversely, the BEPZA Executive Chairman said outside NGOs were free
to work with the EPZ workers, pointing to his own productive working
relationship with the Solidarity Center.

10. (U) During his meeting with the delegation, the BEPZA Executive
Chairman hinted he would soon be replaced. Days later the GOB
announced that Brigadier General Jamil Ahmed Khan would replace
Yussuf.

GOVERNMENT OF BANGLADESH: REPRESENTATION WITHOUT COORDINATION
----------------------------- -------------------------------

11. (SBU) Bangladesh's Commerce Secretary convened an
inter-ministerial meeting with the USTR delegation that included
representatives from the Ministry of Labor, Home Ministry, Ministry
of Foreign Affairs, and the Bangladesh Export Processing Zone
Authority. The GOB representatives presented general statements of
progress regarding the issues laid out in the GSP petition.
Overall, there was nothing significant to report and, at times,
speakers contradicted each other. For example, when a Ministry of
Commerce official stated there was no incidence of the worst forms
of child labor in Bangladesh, a Labor Ministry official corrected
him and noted that according to GOB estimates, there were
approximately 1.2 million children employed in conditions deemed
hazardous or which prevented them from attending school.


DHAKA 00000512 003 OF 003


12. (U) The U.S. delegation discussed the purpose of the GSP review,
emphasizing that the review provided Bangladesh an opportunity to
improve labor conditions. The delegation said the GOB needed to
address the specific concerns outlined in the recent GSP demarche
(REFTEL). The delegation also underscored its hope that the GOB
would phase out EWAIRA in favor a single, consistent national labor
regime. The USTR also presented a recent analysis of Bangladesh's
utilization of the GSP facility that highlighted opportunities for
Bangladesh to further diversify its exports to the United States and
identified specific ways in which to claim additional duty-free
treatment for exports.

COMMENT
-------

13. (SBU) Bangladesh's RMG sector continues to lack credible
statistics on implementation of its minimum wage laws and overall
labor compliance regime. Although there has been progress in the
EPZ, the replacement of BEPZA Executive Chairman Brigadier General
Abdullah Ashraf Yussuf is a setback, at least until the new
Executive Chairman finds his feet. Initial meetings with Brigadier
General Jamil Ahmed Khan suggest that he is personally committed to
progress on labor issues, but the proof will be action on the
ground. Despite a recent negative report regarding labor conditions
in the shrimp industry, the Shrimp Processors Association in
Bangladesh appeared to understand GSP petition concerns on child
labor and promised to work with USAID to address them. While labor
groups and the private sector seemed attuned to the GSP review
process and issues, the Caretaker Government's capacity to
coordinate a national response remains limited.

14. (U) USTR and DOL cleared this cable.

MORIARTY

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