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P 101040Z NOV 09
FM AMEMBASSY DHAKA
TO SECSTATE WASHDC PRIORITY 9645
INFO ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
AMEMBASSY RANGOON PRIORITY 
CDR USPACOM HONOLULU HI PRIORITY
DEPT OF LABOR WASHDC PRIORITY
USCINCPAC HONOLULU HI PRIORITY

UNCLAS DHAKA 001030 
 
 
SIPDIS 
 
DEPT FOR: USAID, SCA/RA, SCA/INSB, EB, DRL, G, IWI 
LABOR FOR TIM WEDDING, ANNE ZOLLNER AND RACHEL RIGBY 
 
E.O. 12958: N/A 
TAGS: ELAB ECON ETRD PHUM PREL BG
SUBJECT: VIOLENCE LEADS TO CALLS FOR GREATER TRADE UNIONISM 
IN BANGLADESH'S GARMENT'S SECTOR 
 
REF: A. DHAKA 1005 
     ¶B. DHAKA 405 
 
 
Summary 
-------- 
 
¶1.  (SBU) Three individuals died and over 100 were injured 
following unrest at a garments factory outside Dhaka in late 
October, leading to renewed moves by the Government of 
Bangladesh to develop and strengthen trade unions in the 
sector.  Disgruntled workers allege that a factory owner had 
suddenly announced closure of the factory without paying 
three months back wages.  The owner claimed, however, that he 
had shut down the factory because of falling work orders and 
that all wages would be paid in full.  The factory owner and 
the President of the Bangladesh Knitwear Manufacturers and 
Exporters Association (BKMEA), suggested that local political 
interests were likely to have had a hand in the rioting. 
This recent spate of violence demonstrates the fragility of 
labor-management relations in the garments sector. 
 
Sudden closure provokes rioting 
------------------------------- 
 
¶2.  (SBU) On October 31, a large group broke into the Nippon 
Garments Factory outside Dhaka after the owner announced that 
the factory was closing.  Rioters clashed with the police who 
were posted around the premises to prevent damage to the 
property.  Three bystanders were killed and over 100 were 
injured in the subsequent rioting.  Workers argue that the 
owner had failed to provide any advance warning about the 
factory's closure and pay back wages.  Worker's rights 
organizations concur, alleging that the factory owner had 
failed to pay overtime to his employees and that he had a 
history of late payment of salaries.  The owner disputes this 
claim, saying that he was current in his payments and that he 
was due to give the workers their final salaries in a matter 
of days. 
 
Rivalries and political interests may have a hand 
--------------------------------------------- ---- 
 
¶3.  (C) The owner of Nippon Garments Factory alleges that 
rival businessmen backed by local leaders of the ruling Awami 
League (AL) had been pressuring him to sell his factory's 
machinery and offer other concessions at a discounted rate. 
He suggests that "outsiders" rather than his own employees 
were behind the violence and destruction.  He also pointed 
out that temporary factory closures were not uncommon in the 
industry, especially in the current economic climate, and 
that the employee association had accepted his decision to 
shut down the factory for an unspecified period of time. 
 
¶4.  (C) The President of the BKMEA speculated that business 
rivals might have capitalized on the workers, sense of 
insecurity following the closure, to foment unrest.  He added 
that in many similar cases, such groups often elicit 
support from local members of the ruling party. 
 
Trade unions as the solution? 
----------------------------- 
 
¶5.  (SBU) Following the violence, the Prime Minister 
instructed the Home Secretary to take necessary action 
against the factory owner.  The Ministry of Labor announced 
the formation of a 12 member committee to formulate measures 
designed to increase the prevalence of factory-based trade 
unions in the garments sector.  While the country,s labor 
law permits full freedom of association, levels of union 
activity in the garments sector are extremely low.  According 
to the American Center for International Labor Solidarity 
(ACILS), large union federations are loosely connected with 
workers in approximately 30 - 40 percent of garment 
factories.  In those factories they provide assistance to 
workers but have no formal presence.  ACILS estimates that 
only 5 - 10 percent of factories in the garments sector are 
unionized.  The garments industry employs roughly 2 million 
workers over 75 percent of whom 
are women. 
 
¶6.  (C) The BKMEA President questioned the government's 
decision to promote trade unionism and asserted that workers 
were generally not interested in forming unions in the 
garment sector.  He added that workers often did not 
remain at their places of employment for long periods of time 
and were therefore focused more on short term gains rather 
than collective bargaining for long term gains.  He admitted 
that employers disliked labor unions, viewing 
organized labor as excessively "militant" and vulnerable to 
manipulation by the political parties for partisan purposes. 
 
Comment 
------- 
 
¶7.  (C) Bangladesh's garments sector continues to suffer 
growing pains despite being the engine of the country's 
economic growth.  Many factory owners routinely underpay 
their workers or pay salaries late.  Relations between labor 
and management remain fraught with tension.  Strife from one 
factory has the potential to spread and affect others.  Given 
the presence of local rivalries and political interests, the 
problems defy any easy solution.  The GOB has correctly 
identified improving workers rights as a priority.  In this 
regard, the Government,s measures are a step in the right 
direction.  The trick will be to develop non politicized 
trade unions in the garments sector.  In a recent visit to 
Bangladesh, Assistant U.S. Trade Representative, Michael 
Delaney, tied progress on labor issues to trade preferences 
(Reftel A).  Post will continue to urge all parties to work 
together to achieve additional progress. 
 
 
MORIARTY