• Monday, March 02, 2015

EPZ investors worried over trade union

Refayet Ullah Mirdha

Foreign investors in the export processing zones (EPZs) do not want trade unionism as any agitation or demonstration in such specialised industrial zones will hamper production and overseas trade.

“We are worried about protecting our investment as the cabinet agreed to amend the EPZ law, which will allow unionism in the EPZs,” said a Japanese investor in Chittagong Export Processing Zone (CEPZ), asking not to be named.

“We do not want any new unionism as we already have a workers' welfare committee (WWC) at every factory in EPZs. This committee is enough to protect the interests of workers.”

The current welfare committees were formed in collaboration with six important stakeholders -- Bangladesh government, World Bank, AFL-CIO (American Federation of Labour-Congress of Industrial Organisations), US Embassy in Dhaka, International Labour Organisation, and Bangladesh Export Processing Zones Authority (Bepza), in 2009.

“So these committees are still well-functioning. We do not need any new unions. Any new union having provisions for agitation and demonstration by the workers will be suicidal for Bangladesh as it will take a toll on foreign investment,” the investor said.

“With changing business conditions, we are already concerned over compliance issues demanded by international retailers,” said a Korean investor in Dhaka Export Processing Zone, also preferring anonymity.

The experiences of the current WWC are good so far, the Korean investor added. The workers are satisfied with the activities of the WWC as no incident of violence took place in the factories located inside the EPZs, he said.

“The inflow of fresh foreign funds in the EPZs will be affected by unionism.”

On amendments to the EPZ law and the state of investment, Mikail Shipar, secretary to the labour and employment ministry, said the proposed law is still at an initial stage as the cabinet approved the amendment on July 7.

“We will have to work a lot to amend the EPZ law,” Shipar told The Daily Star by phone.

“We will give the WWCs the status of collective bargaining agents, instead of using the phrase 'trade unions'.”

“That means the workers will be allowed the freedom of association under the existing WWC. We will not use the term trade union in the amendment to the EPZ law,” Shipar said.

On discrimination in trade unionism between the factories inside the EPZs and outside, he said the government should protect the foreign investors.

“The concept of EPZs was introduced to attract foreign investment with special protection. So, we will have to protect their interests.”

After the Rana Plaza building collapse in April last year, the government amended the labour law in July the same year, allowing full freedom of association in factories outside the EPZs.

With the amendment to the labour law, a total of 203 trade unions have been registered since January to the end of July this year, according to the labour ministry.

The government moved to amend the EPZ law under pressures from the US government as the Obama Administration suspended the generalised system of preferences status, citing serious shortcomings in labour rights and working conditions, on June 27 last year.


With the suspension, United States Trade Representative, the chief trade negotiation body of the American government, slapped 16 conditions on Bangladesh, including amendment to the EPZ law, to gain back the GSP status.

The cabinet approved a draft law protecting EPZ workers' right to freedom of association on July 7 with a provision that at least 30 percent of the workers of a factory within an EPZ will have to apply for registration.

At present, the EPZ Workers' Association and Industrial Relations Act 2009 does not allow trade unions, a term also not mentioned in the draft okayed by the cabinet.

Currently, some 428 operational units in the EPZs invested $402.58 million last fiscal year, while their investments amounted to $328.53 million in fiscal 2012-13, according to Bepza.

Bepza runs eight EPZs and facilitates investments by local and foreign firms to produce goods for exports.

Published: 12:00 am Sunday, August 31, 2014

TAGS: foreign investors Export Processing Zones chittagong export processing zone trade unionism specialised industrial zones overseas trade

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