USAID Gives Another $18 Million to Assist Bangladesh Factories

USAID has provided an additional $18 million in funding to provide low-cost loans to apparel producers in Bangladesh to enable them to make structural, fire and electrical safety improvements.

The funding was revealed at a press briefing at the Pan Pacific Sonargaon Hotel in Dhaka on Thursday by the Alliance for Bangladesh Worker Safety, which unveiled its second annual report on the sector. Over the last year, the focus has been on remediation — fixing the structural, fire and electrical safety problems in Bangladesh factories — as well as on training workers. More than 1.1 million workers have been trained in fire safety procedures.

James F. Moriarty, the Alliance’s executive director, told WWD that while the logistics would be made clearer shortly, the $18 million from USAID was intended for factories producing for Alliance members, while an additional $4 million is expected to be made available to other factories. This amount would be essentially for smaller and medium-size factories.

The agreement is expected to be signed by the end of the month.

Factory owners in Bangladesh have been complaining that the costs of remediation — ranging from $250,000 to $350,000 — have put a lot of pressure on them, especially given the targets to complete a variety of tasks. Fire doors and sprinklers are among the additional requirements for safety, neither of which is produced in Bangladesh and must be imported.

Moriarty said that six factories have fully completed the process of remediation and fulfilled all the requirements listed for safety after inspection. These factories include Green Textiles, Kwun Tong Apparels, Laundry Industries, Lenny Apparels and Univogh Limited.

The annual report by the Alliance shared some key statistics:

There are 662 active factories working with the Alliance, and an estimated 1.2 million workers in the Alliance factories;
591 corrective action plans have been approved;
22 factories have been sent to the review panel, with eight fully closed, 12 partially closed and two working with a load reduction;
6,177 payments have been made to displaced workers;
21,010 calls have been made to the help line set up by the Alliance for workers to reach out, with 414 factories having access to the help line.

“The work we do — inspecting factories, developing corrective action plans and remediating factories — is hard, but important,” noted Ellen O’Kane Tauscher, independent chair of the Alliance, in the report. “These efforts have helped transform the garment industry in Bangladesh and focus attention on the need to ensure factories are safe and workers are provided with a safe and secure work environment. Where possible, we have collaborated with The Accord on Fire and Building Safety in Bangladesh to make progress on important policy issues.”

Some of the key achievements in the last two years have included creating corrective action plans for each factory, helping remediation with the low-interest financing options; implementing a new training program targeted at factory security guards and launching an occupational safety and health committee pilot in 12 Alliance factories.

While factory owners have made clear their intentions to improve factories — and pointed out the paucity of funds to do so — there has been greater concern about the issue of worker committees.

As a Bangladesh minister, as well as factory owners, have voiced displeasure over what is regarded as interference, the issue of forming worker groups to help maintain safety is being seen as a key way forward.

“The new Bangladesh labor law requires factories to establish occupational safety and health committees. In year two, the Alliance took an important step toward these requirements, beginning a pilot safety committee program. The Alliance partnered with the ILO’s Better Work program to launch pilot safety committees in 12 Alliance factories. The goal of this program is to begin building the foundation for effective and sustainable worker representative structures,” the report noted.

“One challenge has been the prolonged delay by the government of Bangladesh to finalize critical regulations for the new labor law, which has delayed the launch of the Alliance’s pilot program. We have joined with the Accord to ask the government of Bangladesh to finalize and circulate these regulations as soon as possible,” it said.

There were other initiatives, including the appointment of chief safety officer Mark Chubb in March. He is a certified chief fire officer and fire service health and safety officer with more than 30 years of experience in fire safety and emergency management. The group also organized the International Trade Expo for Fire and Building Safety in December in partnership with other organizations.

Along with issues of accessing equipment and engineers to help improve factories, there have been other hurdles, such as the need to eliminate unauthorized subcontracting, an ongoing problem in Bangladesh’s garment sector.

Looking ahead, the Alliance expects to have trained workers in all its member factories on the help line and to hold refresher courses in fire safety training. The process of transferring the work to the government of Bangladesh and other stakeholders to ensure sustainability will also be a key focus.

The Alliance is a platform of 26 North American retailers and brands including Wal-Mart, Target and Gap Inc. that was formed after the collapse of the eight-story Rana Plaza building in April 2013.

In the last two years, the Alliance has identified and inspected 622 factories from which its members source from Bangladesh.