The case of Spectrum Sweaters Dealing with Disasters International Conference 2010

Overview  The Ready Made Garment (RMG) sector for Bangladesh  The Spectrum factory collapse – cause and effect  Multinational responses - Rights vs Relief  Elements of the Scheme and the socalled ‘Purdah’ Project  Some outcomes and initiatives Dealing with Disasters International Conference 2010

Bangladesh in the the Global Apparel Production and Value Chain Raw materials Processing Component Networks Assembly Export Networks Retail Networks Logistics After G. Gereffi 2001 Backward linkageForward Linkage

The RMG Sector – Some indicators  $16.2 Billion export earnings  Ranked 4 th apparel exporter by the WTO  80% of 2 million workforce are female-  Rural migrants  Amongst lowest wage rates in the industry  Worst factory health and safety record  Excessive working hours  Non compliance a major issue  High degree of sub-contracting in the RMG

Dealing with Disasters International Conference 2010

7 th Floor: Sweater operators Dealing with Disasters International Conference 2010

3 rd Floor: Circular Knitting Machines Dealing with Disasters International Conference 2010

Ground floor: Dyeing machines Dealing with Disasters International Conference 2010

The ‘Trigger' Dealing with Disasters International Conference 2010

The Human and Social Cost Dealing with Disasters International Conference 2010  64 dead – 27 married with dependants  80% of wives have no income  118 dependant relatives identified  54 injured – 30 married  125 dependants  2,700 workers unemployed overnight  Wages not collected  Widows are particularly vulnerable

Dealing with Disasters International Conference 2010  Taka state provision  Taka top up by BGMEA Euro 950 Compensation for workplace fatality in Bangladesh in 2005

Company Responses Relief – Friendship Fastrack Initiative Rights- Inditex-ITGLWF Voluntary Relief Scheme  Carrefour  KarstadtQuelle  Cotton Group  Steilmann  Scapino  Inditex  Arcandor (formerly Karstadtquelle  Solo Invest  New Wave Dealing with Disasters International Conference 2010

Relief vs Rights FriendshipInditex/ITGLWF  Immediate Fasttrack relief  Rickshaw vans – sewing machines  Income generation activities - choice controlled by the NGO – e.g. milk cow, land, shop  Replicable Pension Scheme  Enhanced compensation  Plus cover for loss of earnings Dealing with Disasters International Conference 2010

Two Innovations  A Replicable Pension Scheme  A ‘Purdah’ Project Dealing with Disasters International Conference 2010

The Pension Scheme Information Requirements  Personal Data  The Yield Curve  Pension Data  Lump Sum  Exchange Dealing with Disasters International Conference 2010

Personal Data: Fact Finding Mission Dealing with Disasters International Conference 2010

Pension Scheme: Personal Data Dealing with Disasters International Conference 2010

Purdah data Dealing with Disasters International Conference 2010

Calculating the Yield Curve Dealing with Disasters International Conference 2010

Calculating the Pension Dealing with Disasters International Conference 2010

Calculating the Lump Sum Dealing with Disasters International Conference 2010

Converting and allowing for Exchange Rate fluctuations Dealing with Disasters International Conference 2010

Allowing for Bangladesh Inheritance Law Dealing with Disasters International Conference 2010

Some outcomes and initiatives  GLOBAL:  International Framework Agreement between Inditex and the ITGLWF  Potential replicable tool for LDCs Dealing with Disasters International Conference 2010

Some outcomes and initiatives  NATIONAL  Export Promotion Bureau set up a compliance monitoring cell  Worker Welfare Foundation Act 2006 and New Labour Act Dealing with Disasters International Conference 2010

Some outcomes and planned initiatives  Industry wide in the RMG  Insurance premium for member firms  Pension Scheme  Safety Nets Dealing with Disasters International Conference 2010

Some outcomes and planned initiatives New survey on violence against women (VAW) Risk assessment tool for widows and children Dealing with Disasters International Conference 2010

Some outcomes and initiatives  Greater trade union involvement  Fact Finding Mission  Social dialogue with the Government and the BGMEA (employers association) on a compensation scheme for the industry Dealing with Disasters International Conference 2010