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Chairman Menendez Opening Statement at Hearing, “Labor Issues in Bangladesh”

WASHINGTON, DC – U.S. Sen. Robert Menendez, Chairman of the Senate Foreign Affairs Committee, delivered this opening statement, as prepared for delivery, at today’s hearing, “Labor Issues in Bangladesh.”

“It’s not often that the Foreign Relations Committee holds a hearing like this – in fact, the last labor hearing this Committee chaired was the debate giving PNTR status to China in 2000.  So it’s been awhile.

But as I said in an op-ed that was published today, the tragedy at Rana Plaza – the deadliest accident of the global apparel industry – should be a wake-up call for all of us.

We have a range of witnesses in our two panels this morning, from the State Department, the Department of Labor, the Office of the U.S. Trade Representative, the AFL-CIO, and a representative from American retail and apparel manufacturers.

We’ve also received written testimony – from outside groups, and I ask unanimous consent that their testimony be included for the record.

I also want to recognize the Bangladeshi Ambassador to the United States who is with us in the audience today. Welcome, Ambassador Qader and thank you for being here.

Let me say how much the United States values its relationship with Bangladesh, a moderate, Muslim-majority democracy and a trade partner with annual flows topping $6 billion and supporting 10,000 American jobs.

As the world’s seventh most populous country, Bangladesh has made dramatic strides on everything from global food security to gender equality to maternal and child health. But, not unlike other apparel exporters – Bangladesh is a poor, developing country with lots of economic challenges. What sets it apart from other countries is the sheer size of the industry and rate of growth. In my view, what happens in Bangladesh will have a dramatic ripple-effect on the global apparel industry. A change in working conditions there has the potential to change conditions for workers everywhere.

That is one reason why we want global retailers to stay in Bangladesh, work together, and adopt industry-wide standards to do everything possible to improve working conditions and make sure another Rana Plaza never happens again – anywhere in the world.

The fact is, most of us in this room own clothing that was made in Bangladesh – the second largest supplier of clothes. Major American retailers: Target, Gap, Tommy Hilfiger, Calvin Klein, and Walmart – all buy apparel from Bangladesh.

The reasons are clear.  Labor is cheaper in Bangladesh; the regulatory process is more flexible in Bangladesh; hours, working conditions, and building safety concerns clearly are less cumbersome in Bangladesh  and that means products are cheaper and profit margins are higher.

The Bangladeshi apparel industry now employs about 4 million – at least 80 percent of whom are women. It finances the government and influences its politics – it’s no coincidence that numerous Members of Parliament have ties to the garment industry.

The question is: are we seeing a global race to the bottom? Bangladesh offers some of the cheapest labor in the world, with limited workers’ protections and rights.

As a result, global retailers enjoy high profits, and global consumers delight in low costs, so how can we improve conditions without prices going up and manufactures moving on to the next Bangladesh?

Today – with the Rana Plaza collapse that killed at least 1,127 and the Tazreen factory fire in November which killed at least 112 workers in conditions similar to the Triangle Shirtwaist Factory Fire, and 44 more factory fires since -- the brand “Made in Bangladesh” is in jeopardy.

Just as the Triangle Shirtwaist fire galvanized a labor movement in the United States over a hundred years ago, Rana Plaza and Tazreen should be a turning point towards real, systematic change in Bangladesh. We can only hope.

As the son of a seamstress who worked in the textile factories of northern New Jersey – worked hard every day under difficult but far better conditions than in Bangladesh – I know firsthand how difficult that work can be. But it should never be fatal.

Since Rana Plaza, the Bangladesh government has committed to a number of steps to improve conditions, including amending its labor laws, raising the minimum wage for garment workers, registering more trade unions, and increasing the number of building inspectors.

Unfortunately, past promises have gone largely unfulfilled.

Bangladesh has a long way to go in shifting from a culture favoring corruption to one that is friendlier to workers, enforcing pro-labor legislation, allowing for the freedom of association without repercussion, and enforcing building and fire inspection codes.

Factory owners must do their part as well to bring the workplace up to code. A recent survey by Bangladeshi engineers found that 60 percent of the factories it inspected are vulnerable to collapse.  With somewhere between 3,000 and 5,000 factories, the sheer scale of the problem is mind boggling.

Global retailers have a real role to play. Major European retailers have signed a binding building and fire safety agreement, but American retailers and manufacturers now need to cooperate on a similar industry-wide plan that includes workplace safety standards, cost-sharing for improvements and compensation for injured workers. It’s time for collective action if there is going to be any systematic change.

Absent significant collective changes that improve labor conditions and worker safety, the Administration should seriously consider suspending with conditions Generalized System of Preferences benefits to Bangladesh.

While only a small fraction of Bangladesh’s exports would be affected, given ongoing violations of the GSP workers’ rights criteria, GSP suspension would send a strong signal that the United States is serious about protecting workers and improving workplace safety.”