Know Your Supplier (Continued): United States Suspends Bangladesh’s GSP Benefits

Last Thursday, the White House issued a proclamation declaring that “it is appropriate to suspend Bangladesh’s designation as a GSP beneficiary developing country because it has not taken or is not taking steps to afford internationally recognized worker rights to workers in the country.”

 

The decision means that many of Bangladesh’s exports will be denied beneficial tariff rates under the Generalized System of Preferences.  However, the GSP program does not affect duty rates on shrimp imports and reaction in the seafood industry press has emphasized that the suspension has no practical impact on shrimp trade.

  

 This is true.  But dismissing the decision as practically irrelevant misses a larger, more fundamental point.  In addition to the garment industry, working conditions in the shrimp farming and processing sector of Bangladesh have become a focal point in the evaluation of labor rights in the country.  And these conditions have not significantly improved.

 

Through April of this year, the United States imported over $16 million worth of shrimp from Bangladesh, making the country the tenth most significant supplier of shrimp to this market.

 

Bangladesh’s economy will be adversely impacted by the suspension.  Lifting the suspension will be a top priority.  And there are indications that the industry is taking the issue seriously.  Discussing a recent initiative to improve conditions for shrimp processor workers, a Bangladeshi news report highlighted the circumstances at Kuilarchar Sea Foods Ltd., a significant supplier of shrimp to the U.S. market:

 

Female workers are the majority of workforce engaged in post-harvest shrimp processing industry in Cox’s Bazar zone and have not ever been trained adequately on social compliance or other skill training to improve their performance.

 

Unlike the male workers, most of the female workers are working as casual worker for years together at lower wage without being absorbed as permanent worker under the factory.  This was stated by Miss Fatema Begum (23), a female worker engaged for last five years in Kuliarchar Sea Foods Ltd., Cox’s Bazar under a labor contractor during the closing session of 2-day long training course on Labour Laws for the shrimp processing workers.  United Nation Industrial Development Organisation (UNIDO) has been working for preaching of labor rights and labor rules to raise awareness around the country’s shrimp processing industries, the second largest source of export earnings for Bangladesh.

 

A total of 64 workers including 33 female were trained for two days in two batches from 25 to 28 December 2012 at factory premises of Kuliarchar Sea Foods Ltd and Meenhar Fisheries Ltd, the two leading shrimp processing industry in Cox’s Bazar.  The participants were allowed to speak in front of the management about their demands and problems. Group work, individual presentation and quiz competition was the special feature for better learning and to make the training participatory.

 

Directly and openly addressing problems, particularly the vulnerability of female workers in the shrimp processing sector, is an important step in eliminating labor abuse.  But the problems should not be underestimated.  Commenting on the same group of trainings, an in-country expert on the industry explained the substantial role played by labor contractors in the processing sector and how this segment of workers escaped the review of most audits:

Contract labors under Labor Contractor have been the most neglected in terms of benefits where 80% of them are female.  The wage paid to the Labor Contractors against work done by casual contract workers is not under any audit.  It is unclear how much of the wage is paid to labor and how much is deducted for contractor’s commission.

The existence of labor contractors – whether in Bangladesh or Thailand or anywhere else in South or Southeast Asia – means that third-party audits are  insufficient responses to labor abuse.  Meaningfully addressing the problem will require purchasers who demand that their shrimp suppliers do more than tout weak industry certifications, but instead meet meaningful standards established by organizations without obvious conflicting interests.  Going forward, it will be vital for those sourcing shrimp from Bangladesh to insist upon objective metrics, such as reduced reliance on contract workers and an increase in the number of female permanent workers, to ensure that commitments to improve are more than lip service.

It is long past time to get serious about ridding the shrimp supply chain of labor abuses.  The consequences of continuing to ignore or, worse, papering over the problem will become increasingly severe.  On the other hand, fixing the problem should not be all that hard.  It is just a question of priorities.

 

John Williams

Read the “Technical Trade Proclamation to Congress Regarding Bangladesh” (June 27, 2013):

http://www.whitehouse.gov/the-press-office/2013/06/27/technical-trade-proclamation-congress-regarding-bangladesh 

Review the United States Trade Representative Michael Froman’s Comments on the Technical Trade Proclamation:  http://www.ustr.gov/about-us/press-office/press-releases/2013/june/michael-froman-gsp-bangladesh 

Review the public record of comments regarding Bangladesh’s GSP status:   http://www.regulations.gov/#!docketDetail;D=USTR-2012-0036

Read The New Nation’s “Gender Focused Training on Labour Laws at Cox’s Bazar”:  http://www.thenewnationbd.com/newsdetails.aspx?newsid=61776

Read Md. Nuruzzaman’s “Gender Focused Training on Labor Laws in the Shrimp Processing Industry:  A New Approach of Preaching Labor Rights in Bangladesh,” Shrimp & Fish News (Jan.-Apr. 2013):

https://www.shrimpalliance.com/wp-content/uploads/2013/07/Kuliarchar-Training.pdf:

Read the Southern Shrimp Alliance’s report Know Your Supplier: Labor Abuses in Bangladesh’s Farmed-Shrimp Industry: https://www.shrimpalliance.com/wp-content/uploads/2013/03/SSA-BG-worker-rights-paper1.pdf

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