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