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BANGLADESH: Retailers Must Play a Part in Wage Issue Says ETI

August 16, 2010
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The Ethical Trading Initiative has urged retailers sourcing from Bangladesh to "play their part" to make sure workers aren't the first to suffer when brands squeeze costs, cut prices within contract, reduce orders or make last-minute changes with little warning.

Joining the ongoing debate about the minimum wage paid to workers in Bangladesh, ETI chair Alan Roberts said: "Retailers sourcing from Bangladesh have a critical role to play. They must take urgent steps to ensure they are trading in a way that supports a living wage and decent terms and conditions for workers.

"This must take account of the price they pay to their suppliers, but retailers also need to embed ethical trade into the way they do business with them, including developing close working relationships with factories, making sure they don't place unrealistic demands on them, and supporting them to achieve maximum efficiency."

The ETI, an alliance of retailers, trade unions, charities and campaign groups which sets out basic rights for workers across the supply chain, is also joining trade union calls for the Bangladeshi government to make a further increase in the minimum wage to BDT5,000 (around GBP45) a month.

Workers in and around Dhaka rioted for several days at the end of last month after the government announced its long-delayed decision to raise the minimum wage from BDT1,662 (GBP15) a month to BDT3,000 (GBP27), to come into effect on 1 November.

The new minimum wage falls short of the BDT5,000 that Bangladeshi and international unions - and the ETI - consider a realistic target to work towards in Bangladesh.

"The 2.5m people working in the industry are clearly incredibly frustrated about the government's continuing failure to set a minimum wage that reflects their true cost of living," Roberts notes.

"The government must increase the minimum wage further, and do so swiftly. It must also enforce the rule of law and ensure that workers are free to join a union of their choosing, so that they can collectively bargain with their employers to increase wages.

While companies including M&S and Asda's George have embarked on pilot projects with selected factories to achieve incremental wage rises through efficiency gains, most apparel workers still don't earn enough to cover basic living costs.

Says Roberts: "There is no silver bullet to raising wages in Bangladesh. But there is huge potential to make a lasting difference across the industry if the government, industry, unions and retailers all play their part."