A Comparative Analysis Between the

Bangladesh Labor Law 2006 and 7 General

Codes of Conduct
52-66 minutes

Executive Summary The Readymade Garment (RMG) sector in Bangladesh is a highly export
oriented sector and therefore extremely volatile to requirements of international buyers. Since the
adherence to international social standards has become a mandatory requirement in the
international business arena, the local suppliers have to be compliant to these standards in order
to remain in business. There have been some significant revisions to the Bangladesh Labor Law
in 2006. This newly revised law already covers a lot of the common standards like employment
conditions, occupational health and safety issues as well as the ILO core labor standards.

Besides being complaint to the national labor law, the suppliers must also adhere to the
international standards. These international standards may be defined through their individual
buyers codes of conduct or general codes of the conduct. Compliance to the buyers codes of
conduct is mandatory but compliance to the general codes of conduct is optional unless the buyer
accepts a specific general code as a substitute for its own audits or requirements.

These voluntary monitoring or verification initiatives have taken root since the 1990s to add
legitimacy and credibility to companies social and environmental compliance programs. This
study is a comparative analysis of the Bangladesh Labor Law 2006 with seven internationally
recognized general codes of conducts. The general codes of conduct are: SA8000 of
Social Accountability International (SAI) Base Code of the Ethical Trading Initiative (ETI) Fair
Labor Association (FLA) Fair Wear Foundation (FWF) Business Social Compliance Initiative
(BSCI) Worldwide Responsible Apparel Production (WRAP) Joint Initiative on Corporate
Accountability and Workers Rights (JO-IN).

Besides, the JO-IN code, the other six codes are prevalent in the Bangladeshi RMG sector. The
comparative analysis shows that the Bangladesh Labor Law 2006 significantly covers majority
of the requirements of the different general codes of conduct. This indicates that if a factory is
100% compliant to the national law, it will cover approximately 85% of the requirements of the
other general codes of conduct. Hence RMG factories should be encouraged to improve their
compliance with the national law as a first step towards meeting the compliance demands of the
brands and retailers who they supply to.

The analysis does reveal that a few requirements are not fully or partially covered by the national
labor law. It should be noted that the components which are not fully covered by the Bangladesh
Labor Law are either covered by the Bangladesh Constitution or are not directly applicable in the
Bangladesh context. This study clearly reveals that the revised Bangladesh Labor Law along
with other supporting national legislations such as the Bangladesh Building Code and the
Environmental Conservation Rules as well as the overall constitutional framework of
Bangladesh, provides a comprehensive guideline for factories in the RMG sector to comply with
majority of all international social compliance and environmental standards.

Having good pieces of legislations establishes a solid platform for meeting national laws and
internationally defined working standards. However, one of the main challenges is enforcing the
laws. In order to do so effectively, awareness creation on the laws and standards is of paramount
importance. Campaigns should focus on knowledge dissemination on the content, the
implementation procedures and how to monitor and maintain the implemented status. Another
critical aspect is training personnel such as the governments factory inspectors and the
associations social compliance monitors who are responsible for enforcing the correct
implementation of the legislations and standards.

Table of Contents

A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

Introduction

The program for Promotion of Social, Environmental and Production Standards in the
Readymade Garments Sector, in short referred to as PROGRESS, is funded by the German
Ministry for Economic Development and Cooperation (BMZ). It is jointly implemented by the
Ministry of Commerce (MoC) and the German Agency for Technical Cooperation (GTZ). It
concentrates on increasing competitiveness and adherence to social and environmental standards
in the ready made garment (RMG). One of the issues related to the RMG sector in Bangladesh is
the existences of numerous different codes of conduct which suppliers have to adhere to.

Besides, these codes, the suppliers must also comply with all the requirements of the national
legislations. In 2006, the Bangladesh Labor Law went through some major revisions. The
revisions combined 25 scattered Acts and Ordinances to formulate one updated code.
PROGRESS undertook this in-house study to analyze seven leading codes of conduct which are
prevalent to the Bangladeshi RMG sector and compare the codes with the newly revised national
labor law by highlighting all deviations.

The general codes of conduct for comparison considered for this study are Social Accountability
International (SAI), Fair Wear Foundation (FWF), Fair Labor Association (FLA), Ethical
Trading Initiative (ETI), Jo-In Code, Business for Social Compliance Initiative (BSCI) and
Worldwide Responsible Apparels Program (WRAP). One of the main objectives of PROGRESS
is to do capacity building with the different stakeholders in the RMG sector such as the
government and the business associations so that they can provide better services to the sector
and ensure that majority of factories in the RMG sector are compliant at least to the national
labor law. The findings of this study serve as a basis to reinstate the fact that the revised labor
law is a comprehensive piece of legislation which covers majority of the international
requirements of most general codes of conduct.
By being 100% compliant with the national labor law, a supplier has significantly met majority
of the international requirements. The Bangladesh Labor Law has gone through some majority
revisions in 2006 which has made it into a strong piece of legislation. However, it is not still
100% perfect. There are still few gaps and lackings which need to be adjusted and amended in
the future. As implementation of the revised law is ongoing, numerous other deficiencies might
gradually be identified over time. Since recent revisions just took place, another series of
revisions are not anticipated in the near future.

This comparative analysis of the newly revised Bangladesh Labor Law 2006 and seven general
codes of conduct clearly illustrates where the commonalities and differences are. Overall, the
recent revisions to the Bangladesh Labor Law and other national legislations that are associated
with the RMG sector such as the Bangladesh Building Code and the Environmental
Conservation Rules jointly provide comprehensive guidelines for RMG suppliers to manufacture
and export products under socially and environmentally responsible working conditions which
also meet majority of all prevailing international standards.

2 2.1

General Codes of Conduct Definition of Codes

The interest in the social situation of workers in developing countries has increased constantly
over the last years in particular under civil societies and consumers in the industrialized
countries. Social criteria have become an important part of consumer and investment decisions of
individuals and organizations and therefore also big brands and retailers become more aware of
compliance to social standards. Since Bangladesh is part of 1

A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

the global market social compliance is extremely relevant for the export-oriented industry of
Bangladesh, especially for the RMG sector. For competitiveness in the global markets, the
compliance with environmental and social standards is a key point. Through modern information
and communication technologies the economic activity of companies becomes increasingly
transparent and makes it easier for the civil society to uncover and communicate social and
ecological failure of multinational companies.

Companies know about the vulnerability of their brand names and messages concerning bad
working conditions can easily damage their image as well as the market position. A social
responsible management policy is therefore in the long-term interest of the enterprise. However
companies can have a positive influence on the economic development in the target countries
through the introduction of social standards and on the same time improve their image and
market share through social and ecologically responsible behavior.

To address these issues voluntary monitoring or verification initiatives have taken root since the
1990s to add legitimacy and credibility to companies labor compliance programs. They are all
voluntary, meaning that companies opt to participate in them. Each requires member companies
to adopt its respective workplace code of conduct and verifies that they have complied with
organizational requirements. Today, some industries have developed or are developing codes for
the entire industry.

That can be best seen for the apparel and footwear sector. General Codes of Conduct as well as
buyers codes are very common in this industry. These codes of conduct are rules, which
companies impose upon themselves in order to embody social and ecological goals in the
enterprise. Companies formulate these rules mostly for itself and partly also for the suppliers and
orient themselves with the formulation at the international regulations and agreements already
mentioned. Codes of conducts may also be recognized as useful instruments to build on the
companies image.

A lot of companies are participating in this initiatives to show their interests in improving the
working conditions of their business partners/suppliers across the global. Fair trade and buying
practices are a competitive advantage for many businesses. The codes show their commitment to
this process. Codes of conduct may be developed through a multistakeholder approach such as
ETI etc. or companies may have their own codes of conduct which are specific for their suppliers
or codes could be sector specific such as for garments, food, electronics etc.

2.2

Basis of codes

Social compliance can be measured in relation to a certain standard. Concerning environmental

and quality management a multiplicity of standards and certification systems already exist.

The introduction of examinable social standards represents however a new challenge.

Internationally recognized social standards exist, e.g. United Nations Universal Declaration of
Human Rights UN Convention on Children's Rights UN Convention on the Elimination of all
Forms of Discrimination against Women ILO Declaration on Fundamental Principles and
Rights at Work Rio Declaration on Environment and Development However these are
guidelines and recommendations which can be converted voluntarily. Standards that can be
certified only exist to a small extent. Most of the codes refer to these mentioned international
standards, especially the ILO core labor standards.

The ILO formulates international standards in the form of conventions and recommendations
setting minimum standards of basic labor rights: Freedom of association The right to organize 2
A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

Collective bargaining Abolition of forced labor Equality of opportunity and treatment Besides
the above mentioned standards, there are other standards regulating conditions across the entire
spectrum of the work related issues. These principles are concretized in eight ILO conventions,
in each case two for the four fundamental principles mentioned (see table 1). The ILO
conventions are obligatory only if they are ratified by the member states. The entire number of
the ratifications increased in the last years noticeably and varies - depending upon convention -
in the order of magnitude between 148 and 172. Until July 2007, 128 countries had ratified all
eight conventions. Bangladesh has ratified seven out of the eight core conventions.

Table 1: ILO Core-Conventions and ratifications in Bangladesh1 Standard Freedom of

association and bargaining Elimination of forced and compulsory labor Elimination of
discrimination Abolition of child labor Convention Convention 87 (Freedom of association)
Convention 98 (Right to organize& collective bargaining) Convention 29 (Forced labor)
Convention 105 (Abolition of forced labor) Convention 100 (equal remuneration) Convention
111 (employment and occupation) Convention 138 (Minimum age) Convention 182 (worst
forms of child labor) Ratification Yes Yes Yes Yes Yes Yes No Yes

Codes of practice develop frequently from public pressure or are preventively developed. In
addition to the mentioned core labor standards these codes include general working conditions
like occupational health and safety, minimum wages, leave days and working hours. Other
common aspects include womens rights or environmental standards. Also the implementation of
a management system can be a requirement.

2.3

How codes evolved

The overall aim of social standards is to protect the workers. During the industrialization in
Europe they evolved as a reaction to bad working conditions in the newly emerging factories.
The depletion of large parts of the workforce moved child labor, forced labor, freedom of
association and collective bargaining as well as womens rights in the centre of public attention.
Socially responsible behavior - this means also ecologically responsible behavior - has its
starting point predominantly in the developed industrialized countries. The observance of social
standards must be further supervised also in these countries. The by far larger action needs lie
however in developing and emerging countries. Through the increasing world-wide division of
labor large parts of the production chain are located in developing countries which have deficits
with the observance of social standards. While working abroad companies are supposed to be
compliant to the legal regulations. In developing and emerging countries legal regulations do not
always correspond to the domestic standards of the companies.

So it can be difficult for companies to combine national legislation and generally recognized
basic values. Even if the legislation in developing and emerging countries corresponds to the
standards of the industrialized countries there are deficits in monitoring and implementation of
the standards.

Refer to the ILO website: http://www.ilo.org/ilolex/english/docs/declworld.htm.

3
A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

However an internationally defined and recognized social standard does not exist. Thus different
stakeholder came up with the idea of codes of conduct to verify the compliance to international
social standards. Social standards are extremely important in an industrialized world. Nowadays
due to financial benefits, most companies outsource their production to developing countries
where compliance to social standards is not as important.

The problem is that consumers and respective governments ask for socially responsible behavior
and working conditions and often the suppliers and governments of the developing countries
cannot enforce or ensure compliance to these international standards. This issue has become a
concern for the companies located in Europe and the USA and hence the companies came up
with formulating codes of conduct which their suppliers have to adhere to if they want to do
business with them.

Companies started off by developing their own codes of conduct. Then gradually as the codes
evolved, many companies teamed up with NGOs, trade unions, academia etc. to formulate
common codes of conduct. Most general codes of conduct were developed with this
multistakeholder approach.

2.4

Classification of codes depending upon the standards they contain (all codes have similar
requirements but differ in the definitions/design and some have also additional requirements e.g.
waste management or anti-bribery policy); depending upon which organization or institution
introduced the code and who controls the observance (companies, enterprise federations, trade
unions, NGOs, management consultations or testing institutes); depending upon their members
and their prevalence (European companies/market, US-American brands/market); depending
upon the range of application (e.g. the enterprise-own factories or whole supply chain, etc.);
depending upon the covered products (only garment, consumer goods, food, industry-wide);
depending upon the methods for their implementation/control (monitoring, certification, and
certification).

The codes of conduct can be classified: 2

3 3.1

Comparison of the Bangladesh Labor Law and general codes of conduct Selected indicators

The comparative analysis is categorized according to the ILO core labor standards, employment
conditions, occupational health and safety issues and other aspects. Within these four categories
subjects were identified as well as indicators to measure the implementation and coverage of the
subjects. The indicators were selected according to the most common aspects of the general
codes as well as the Bangladesh Labor Law.
2

Please refer to Annex I for a broad overview on the general codes of conduct.

4
A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

Subjects of Codes of Conduct

ILO Core Labor Standards

Employment Conditions

Occupational Health and safety

Other Aspects

Child Labor

Harassment and Abuse

Health

Environment

Forced Labor

Wages

Workplace Conditions

Womens Rights

Freedom of Association

Working Hours

Welfare

Managment

Discrimination

Leave ad Holidays

Safety

Employment Relationship

OHS Management System and Training

Others

5
A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

3.2

Analysis

Please note that the grey colored areas indicate coverage Please note that the light grey areas
indicate indirect coverage Subject Child Labor Indicators No work below the age of 14 Light
work between the age of 12 and 14 Assistance to replaced child workers Identification
system/age records No dangerous work Forced labor Bonded labor Prison labor No confiscated
original documentation Trade unions Labor representatives Company facilitates parallel means
when restricted by law Representatives access to workplace Gender Origin/ethnics Trade union
affiliation Religion Political opinion Physical abuse Sexual harassment Verbal abuse Minimum
wage Overtime pay Leave pay Regular payment No illegal deductions Maximum 8/day-48/week
Overtime 2/day-12/week Overtime voluntary Weekly = 1 day off Annual/casual/sick Festival
holidays

BLL 2006

SAI 15

ETI

BSCI

WRAP

FLA

FWF 15

JO-IN 15

ILO Core Labor Standards

Adolescent

Forced Labor

Freedom of Association

Discrimination

Employment Conditions
Harassment and Abuse

***

Wages

Working Hours Leave and holiday

* limited to female workers 6

A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

Please note that the grey colored areas indicate coverage Please note that the light grey areas
indicate indirect coverage Subject

Indicators First aid appliances Medical facilities Drinking water Sanitary facilities for food
storage Clean dormitories where provided Space Temperature Ventilation Noise Light Restroom
Child room Canteen Fire extinguisher Gates/stairs Emergency exits Building safety Machinery
safety Personal protective equipment (PPE) Management representative for OHS OHS
management system (regulations, system to detect)

Regular health & safety training Waste management Emission or effluents treatment No
discrimination Maternity leave and benefit No dangerous work Implementation of management
system Anti-bribery and anti-corruption policy Legally binding employment relationship Legal
compliance Customs compliance Security procedures for outbound shipments

BLL 2006

SAI

ETI

BSCI

WRAP

FLA

FWF

JO-IN

Health

Occupational Health & Safety

Workplace Conditions

Welfare

Safety

H&S Management Training Environment Womens Rights

** **
Others

Management Employment Relationship Others

** The SAI code of conduct recommends that companies comply by the ISO 14000 series to
meet all environmental requirements.
A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

Main Findings

The comparison matrix shows that the revised Bangladesh Labor Law 2006 covers majority of
the requirements of the general codes of conduct. From the above matrices, it may be seen that
across the board, majority of the general codes and the BLL 2006 state that no work below the
age of 14 is allowed. According to SAI, the definition of a child is an individual below or
equal to the age of 15 but the code states that if the national law sets the minimum age to be 14
(as per ILO Convention 138), the lower age will apply.

The ETI and FLA codes state the same principle. The WRAP codes states that the minimum age
should be at least 14. The BSCI code clearly states that the minimum age should be whatever is
defined by the national labor law. However, the SAI, FWF and Jo-In codes are more strict and
clearly state that the minimum age must be 15 or above. In the case of SAI, since Bangladesh is
not included in the list of countries where ILO Convention 138 applies, the minimum age must
be 15 or above even though the national labor law states that the minimum age is 14.

Although the minimum age to work is 14, the BLL 2006 has a special clause which states that
children between the ages of 12 and 14 may be employed to do light work that does not
endanger his/her health, development or interfere with his/her education. As per section 44, it is
mandatory that the hours of work should be arranged such that it does not interfere with the
childs school attendance. The BLL 2006 defines an adolescent as an individual between the
ages of 16 and 18 years of age. The BLL 2006 states that an adolescent may work for a
maximum of 5 hours a day, that is, 30 hours a week. However, they cannot work between
7:00pm to 7:00am.

The work must be limited to a maximum of 2 shifts and one shift cannot exceed seven and a half
hours of work. In the comparison matrix, it may be clearly seen that the requirements concerning
adolescent labor is the same across the board. The issue of assistance to replaced child workers
is not addresses in the Bangladesh Labor Law and the other 4 codes of conduct which are
WRAP, FLA and FWF. The comparison matrix shows that besides BLL 2006, all the general
codes of conduct cover the requirements under the forced labor category under the ILO Core
Labor Standards.

The rationale behind this is that the issue of forced labor is not that applicable in Bangladesh.
Bonded labor and prison labor are non-existent in Bangladesh. The BLL 2006 does not mention
the forced labor requirements, however, Article 34 of the Bangladesh Constitution prohibits any
form of forced labor. Any law approving forced labor is null and void as per the constitutional
framework of the Bangladesh legislation. Also, Bangladesh has ratified both the ILO
Conventions 29 and 105 which cover all forced labor requirements.

Companies facilitate parallel means when restricted by law requirement under the freedom of
association category is not covered by the BLL 2006, WRAP, FLA or Jo-In codes. However,
section 205 of the BLL 2006 clearly states that when a factory has more than 50 or more
permanent workers are employed, a participation committee needs to be formed taking equal
number of representatives from the workers and factory management. In factories where there
are no trade unions, the workers representatives shall be nominated by the workers.

Section 206 of the BLL 2006 states that the participation committee shall meet at least once
every two months to discuss and exchange views and recommend measures for defined functions
of the participation committee. The proceeding of each such meeting shall be forwarded to the
Directorate of Labor and the conciliator within seven days of meetings. Under the
Discrimination component of the ILO Core Labor Standards, the Bangladesh Labor Law 2006
does not cover the origin/ethics, religion and political opinion. All the 7 8
A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

general codes of conduct cover these aspects. Although these aspects are not covered in the BLL
2006 but Article 28 of the Bangladesh Constitution clearly states that no discrimination against
religion, cast, race, sex or place of birth is allowed. Discrimination on any ground is prohibited
under the constitutional framework of the Bangladesh legislation.

The BLL 2006 does fully cover the gender and trade union affiliation aspects. The Bangladesh
Labor Law 2006 covers the ILOs Harassment and Abuse requirements 100% but the law
restricts all the subcomponents to females only. The remaining 7 codes of conduct do not have
this restriction. Voluntary overtime is not covered by the Bangladesh Labor Law 2006 however
since all forms of forced labor are prohibited according to the Bangladesh Constitution, all
overtime is voluntary.

The BLL 2006 states that overtime payments are double of the basic wages. All other codes state
that they should be at a premium rate which is usually double of the basic wages. The Jo-In Code
states that the overtime payment rate should be one and a half of the regular hourly compensation
rate. The WRAP code of conduct allows excessive overtime (beyond the defined maximum
allowed time period) in case of urgent business needs but the excessive hours should be more
than 12 weeks in a year.

The leave and holidays requirements are fully covered by the BLL 2006 as well as the general
codes of conduct. Sanitary conditions of food storage are not covered by the Bangladesh Labor
Law, WRAP, FLA and FWF. But according to section 92 of the BLL 2006 states that all
factories must have an in-house canteen for every 100 workers. Clean dormitories where
provided are mandatory under all the other codes of conduct except the Bangladesh Labor Law
2006. The rationale behind this is that factories with dormitories are very rare in Bangladesh.

The workers usually live in the vicinity of where they work hence dormitories are not that
applicable in the Bangladesh context. However, nowadays a lot of new, purpose built factories
are having dormitories. In terms of working conditions, issues regarding the noise level are not
stated in the Bangladesh Labor Law 2006 or the Jo-In Code but the Bangladesh Environment
Acts clearly define the exact level noise that factories must adhere to. Besides the noise issue, all
the other working condition requirements of the general codes of conduct are fully covered in the
BLL 2006.

The welfare and safety requirements of the general codes of conduct are also fully covered by the
BLL 2006. The BLL 2006 states very specific requirements regarding the safety aspects. For
example, there must be one fire extinguisher for every 1000 square feet of space. The health and
safety management is not covered by the Bangladesh Labor Law 2006. ETI and WRAP also do
not cover the OHS management system requirements and the FWF does not state that there must
be an OHS management representative.

Management systems are usually additional requirements by some brands and retailers. Regular
health and safety training is not mentioned in the BLL 2006 directly whereas it is thoroughly
covered in the general codes of conduct. The BLL 2006 does state some safety training
requirements. Regarding fire safety issues, if a factory has more than 10 workers on any floor
beyond the ground level, a training of means of escape in case of a fire, is required. Also, if a
factory has more than 50 employees, a fire drill once a year in mandatory and every 6 months is
recommended. 9
A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

Regarding health issues, the BLL 2006 states that for every 150 workers, there must be one first
aid box and there must be one trained person per first aid box. The Bangladesh Labor Law 2006
and the Environment Conservation Rules (ECR) 1997 thoroughly cover the environment aspects
such as waste management, effluent treatments, ETPs etc., whereas some of the general codes of
conduct do not cover the requirements directly. For instance, the waste management
requirements are covered indirectly by SAI, ETI and JO-IN codes.

The emission or effluents treatments are also covered indirectly by SAI, ETI, FLA, FWF and JO-
IN codes. However, it should be noted that the SAI recommends that the factories comply to the
ISO 14000 series in order to meet all environmental laws and standards. The BLL 2006 covers
the womens rights issues comprehensively. The maternity leave is 1 weeks (8 weeks before and
8 weeks after child birth). However, the worker is not entitled to this benefit if she has worked
for less than 6 months with the employer prior to the notice of requesting maternity leave.

The law states three options for payment of maternity benefits. One option is the employer shall
pay the total benefits for the preceding 8 weeks within 3 days after the worker has submitted the
certificate stating the probability of child birth by a registered physician and shall pay the
remaining amount after 3 working days on submission of the proof of birth. Another option is
that the employer must pay all benefits together with 3 days from submission of the proof of
child birth. The last option is the employer shall pay all the benefits for the preceding 8 weeks
including the day of delivery. This payment must be made within 3 working days of submission
of proof of pregnancy.

The remaining payment may be made within the next 8 weeks after the proof of delivery has
been submitted. The BLL 2006 also states that the wage structure cannot be defined as per the
sex of the worker so any form of discrimination against women is prohibited by the labor law as
well as the overall constitution. Section 109 of the BLL 2006 clearly states that female workers
are not allowed to work between the time period of 10:00pm and 6:00am without consent.

The BLL 2006 also covers the no dangerous work for women component thoroughly. Section
87 of the BLL 2006 states that women workers shall not be allowed to work with running or
dangerous machines, unless they are sufficiently trained to operate such machinery. Also, no
under water or under ground work is permitted for women. Implementation of management
systems is not covered by the Bangladesh Labor Law 2006, ETI, WRAP and FLA. Also, only the
BSCI code covers the anti-bribery and anti-corruption policies. The employment relationship
component is thoroughly covered by the Bangladesh Labor Law as well as all the general codes
of conduct. This component has been further strengthened in the BLL 2006.

Appointment letters, ID cards and service books are mandatory for all employees. The law
defines what information should be included in the appointment letter. Also, the law clearly
states that the service book needs to be signed by both the employer and the worker. The law
provides a list of information which is to be maintained in the service book of each worker. The
issue of legal compliance is covered by the BLL 2006 and all the codes of conduct. Compliance
to all applicable national laws and regulations is mandatory in all countries. The comparison
study also revealed that out of all codes of conduct and the Bangladesh Labor Law 2006, only
the WRAP code had requirements regarding customs compliance and security procedures for
outbound shipments.
A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

Differences between the codes of conduct

The seven codes of conduct that were chosen for this analysis have similar requirements. As the
comparison shows all of the codes include common social and workplace standards:3
Prohibition of child labor Prohibition of forced labor Freedom of association and the right to
collective bargaining Prohibition of discrimination Prohibition of harassment and abuse Wages,
working hours, leave and holidays Workplace health and safety Regular health and safety
trainings Compliance to national legislation

Nevertheless, designs and definitions differ from code to code and some codes also have special
requirements that go above and beyond others as well as the national legislation. Some codes
include also environmental aspects like waste management or the treatment of effluents and
emissions. Other codes require the implementation of a management system to ensure the proper
realization of the code requirements. Certain codes also include customs compliance or
establishment of an anti-bribery/anti-corruption policy.

Social Accountability (SA) 8000 The SA8000 standard has been developed by the USA based
organization, Social Accountability International in 1997. The standard is based on the ILO
conventions, the Universal Declaration of Human Rights and the ILO conventions on the Rights
of the Child. The SAI code of conduct is mostly prevalent in the USA and UK. The SAI code of
conduct covers the whole supply chain of factory/farm/facility. It is not a code which is specific
to the apparels sector.

The SAI has a certification process for companies. The SA8000 standards are very high and well
respected in the business arena. A lot of brands and retailers in the apparels sector tend to forego
their own audits with factories that are SA 8000 certified. The SA8000 certificate is valid for 3
years however, surveillance audits take place every 6 months. The public is informed only of
factories granted certification.

Currently, in Bangladesh, there are only two garment factories that are SA8000 certified. The
costs involved with a SA8000 audit include a registration fee of US$500-650. The independent
audits cost US$500 to US$1500 per day. The costs depend on number of days, size of facility,
scope and location of facility. The total fee for certification services and annual surveillances for
3 year would be around US$4000 to US$6000 per facility.

In addition to the common workplace standards, the SA8000 requires the implementation of a
management system to ensure the proper implementation of the requirements. Among other
things, this includes the definition of the companys policy for social accountability and labor
conditions, planning and implementation aspects, the control of suppliers/subcontractors and
sub-suppliers as well as outside communication and access for verification. Furthermore,
SA8000 requests to establish systems to detect avoid or respond to potential threats to the health
and safety of all personnel.
Business Social Compliance Initiative (BSCI) BSCI is a European industry based initiative for
monitoring social standards in all supplier countries and for all kinds of consumer goods. The
member companies commit themselves

Please refer to Annex II for the detailed contents of the codes of conduct.
A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

to the observance of the BSCI code of conduct. The BSCI code is prevalent among European
brands and retailers. The code applies to direct suppliers as well as subcontractors. The BSCI
code does not offer a certificate but suppliers who are compliant with the BSCI requirements can
apply for a SA8000 certification. A factory is qualified for a period of 3 years but there are
periodic audits in between at random intervals.

The audit results are placed in the BSCI databank which can only be accessed by BSCI member
companies. The audit results are also provided to respective retailers/brands and factories
undergoing the audit. The BSCI refers to the ILO conventions other relevant international
regulations as well as to national and local regulations.

The producers are responsible for the implementation of the code in their supplying factories.
Similar to SA8000, the BSCI standard requires the implementation of a management system and
the setting up of systems to detect avoid or respond to potential threats to the health and safety of
all personnel In addition to that, the BSCI code requests to establish and follow an anti-
bribery/anti-corruption policy in all of their business activities. Some particular elements of the
BSCI code are environmental and safety issues. The BSCI code requires the implementation of
procedures and standards for handling and disposure of chemicals and other dangerous materials.
Moreover, the treatment of emissions and effluent must meet or exceed minimum legal
requirements.

Ethical Trading Initiative (ETI) The ETI was established in 1998 and is a UK based organization
with members from sourcing companies, trade union organizations and NGOs. It is a
multistakeholder initiative. The ETI code of conduct covers the whole supply chain of garment,
food and horticulture products. The code is mostly applicable to suppliers exporting to the UK.
The ETI base code addresses the common labor standards and is based on ILO conventions.

The ETI does not issue ethical trade certificates or labels to any company. Members are
encouraged to implement the code and are committed to monitor the process. The audit results
are not public. The ETI publishes annual reports that summarize the progress of code
implementation. The costs of conducting an ETI audit is less that 1000.

Worldwide Responsible Apparel Production (WRAP) WRAP is an industry-based initiative that

was launched by American Apparel Manufacturing Association which is currently known as the
American Apparel and Footwear Association. Similar to SA8000, WRAP allows for a
certification of individual workplace facilities. The audits are conducted by WRAP-accredited
independent monitors. WRAP is a very popular code especially within US-American brands but
is also endorsed by manufacturers associations in Latin America, Asia, Africa and the
Caribbean. The WRAP principles are based on national regulations of countries where
manufacturing is taking place. Only few requirements of the WRAP code goes beyond the
requirements of the national laws.
The code also addresses all common labor standards. But contrary to all other codes, WRAP
does not specify the maximum working hours or defines forced labor, discrimination and
harassment and abuse as detailed as the other codes. These may be some reasons why the
initiative has received criticism by trade unions and NGOs.

Additional requirements of the WRAP code include the compliance with environmental rules,
regulations and standards as well as the compliance with customs laws especially regarding
illegal transshipment of sewn products. Another point is to maintain facility security procedures
to guard against the introduction of non-manifested cargo into outbound shipment (i.e. drugs,
explosives, biohazards and/or other contraband). After 9/11, the United 12
A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

States increased their security requirements and made it mandatory for the garment suppliers to
abide by some specific requirements in order to export to the USA.

Fair Labor Association (FLA) The FLA developed from the Apparel Industry Partnership (AIP),
an initiative established by USA President, Bill Clinton, in 1996 to address social standards in
the apparel industry. In addition to renowned international brands, participating organizations
include about 190 USA based colleges and universities. Organizations accredited by FLA act as
monitors and audit adherence to the FLA codes. The FLA codes cover the entire supply chain of
garments including contractors, subcontractors, suppliers and licensees.

The FLA does not have a certification process for factories. But FLA does certify brands and
retailers. The audit reports are made public. The FLA Code covers all international labor
standards but does not refer directly to the ILO conventions. It is based on national legislation
and in case of difference between the FLA code and the national legislation, the higher standard
applies. There are no special requirements in addition to the common standards.

Fair Wear Foundation (FWF) The FWF is a Netherlands based organization founded in 1999.
The member companies produce mainly for the Dutch market but recently it has broaden the
scope to include the European market as well. The member companies are responsible for the
implementation of the code requirements in their own company as well as for their whole supply
chain of garments including suppliers, subcontractors and licensees. The FWF member
companies are responsible for internal verification and FWF performs external verification
through random checks.

The FWF is not a certification body. It verifies that member companies are correctly
implementing the code of conduct. The FWF audit results are made public. The FWF code refers
explicitly to ILO conventions and the Universal Declaration on Human Rights but also to the
national legislation and regulations. Compliance requirements include all common labor
standards.

Additional requirements are the implementation of a management system and the

implementation of effective regulations to prevent accidents and minimize health risks.
Compared to the other codes, the FWF is stricter with the minimum age requirement. The FWF
requires that worker should be at a minimum age of 15 years before she/he starts to work.

Joint Initiative on Corporate Accountability and Workers Rights (JO-IN) The JO-IN code was
developed to address the battle of the codes, that is, which code prevails. Due to the existence
of multiple general codes of conduct, the buyers individual codes and the national legislation of
the manufacturing country, suppliers are exposed to numerous audits per year. To streamline this
process, it was decided that maybe having one common code, which meets majority of the
requirements of the all other codes, would be a possible solution to this problem. JO-IN is a joint
project of six organizations involved in improving working conditions in the global supply chain.
Members involved include Ethical Trading Initiative (ETI), Clean Clothes Campaign (CCC),
Fair Wear Foundation (FWF), Fair Labor Association (FLA), Social Accountability International
(SAI) and Workers Rights Consortium (WRC). Seven multinational buyers joined the initiative
in order to conduct the trial project in Turkey and test what practices can deliver improvements
for the workers in the Turkish supply factories. A draft JO-IN Code of Labor Practice has been
agreed and approved and the project is expected to run until the end of 2007.
A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

The JO-IN code refers explicitly to ILO conventions, the Universal Declaration on Human
Rights, the UN Conventions on the Rights of the Child and the UN Convention to Eliminate All
Forms of Discrimination against Women. The JO-IN code has special emphasis on three priority
areas since these are considered to be the focal areas in the garment sector. The areas are: i. ii. iii.
Freedom of association and the right to collective bargaining Wages Hours of work

The code addresses the whole supply chain of garment products and is a combination of all codes
of the participating organizations. Therefore it covers all common labor standards. Additional
requirements are the setting up of systems to detect avoid or respond to potential threats to the
health and safety of all personnel as well as the formation of a safety and health cooperation
committee with worker representative participation. Similar to the FWF, the JO-IN Code is
stricter with the minimum age requirement. It requires that worker should be at a minimum age
of 15 years before she/he starts to work, even if the national legislation states that 14 years of age
is acceptable. JO-IN does not have a certification process and the audit results are not made
public.

Practical problems of implementation

Codes of conducts are just regulations and need to be enforced effectively to ensure social
compliance. After implementing the codes, effective monitoring mechanisms should be in place
to ensure that the standards are maintained. These rules also apply to the national labor law.
Unless enforced and monitored properly, the law does not serve its purpose.

Proper implementation and monitoring of the labor law and codes is extremely challenging. In
order to ensure effective results, most buyers reply on their own codes of conduct rather than the
labor law. Although, it should be noted that in every country, the law of the land prevails. But at
times, the requirements of the codes are higher than the national labor laws and then, whatever
standard is highly prevails.

These issues are clearly stated in all codes of conduct. The buyers preferences to their own
codes of conduct becomes challenging for the suppliers. One supplier usually has more than one
buyer. If each buyer has a different set of requirements, it becomes difficult for the suppliers to
implement all the requirements simultaneously. Also, as a monitoring measure, the supplier has
to undergo several audits per year for each buyer. The small and medium size factories which
usually include the subcontractors specially need support regarding compliance to codes.

The direct suppliers are better equipped to comply with codes whereas subcontractors find it
more challenging from both a financial perspective as well as lack of knowledge regarding
implementation. The costs associated with implementation and maintenance of compliance
standards is pretty high and at times, factories find it difficult to sustain themselves in such
environments. The trend shows that in the last few years the CM prices have a downward trend
hence buyers should consider the aspects of sustainable pricing so that their suppliers can comply
with their requirements.
Also, suppliers should be aware that compliance to the national labor law is mandatory. Hence to
stay in business legally, they must abide by the law. Full compliance to the labor law helps the
suppliers to become compliant to general and specific buyers codes of conduct. The comparison
matrix clearly shows that if the suppliers comply 100% with the national labor law, then they
tentatively cover 85% to 90% of the leading general codes of conduct. The buyers codes of
conduct are not that different from the general codes of 14
A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

conduct. Hence suppliers should aim to comply by the national labor law and then maybe by just
adding a few more aspects, they can also fully comply with their specific buyers codes or the
general codes of conduct. The government encounters several hurdles when monitoring the
implementation of the national labor law mainly due to resource constraints. Currently, the
government only has 53 factory inspectors who are responsible for all sectors.

There are no specific inspectors assigned for the RMG sector. Fortunately, both the business
associations have strong, inhouse social compliance monitoring teams who compliment the work
of the government factory inspectors and carry out inspections at the member factories of the
respective associations. However, social compliance monitoring data from the associations is
often criticized regarding its authenticity.

Hence, nowadays, especially in monitoring the implementation of the points in the tripartite
MoU, the government and associations have teamed up to do joint inspections. This results in
optimal use of resources and also provides neutral data. Compliance to the national law and
codes of conduct is a tedious and long term process. However, there are a lot of tools and
expertise available through business associations and other service provider which facilitate the
suppliers to become compliant. Suppliers should take advantage of the available resources and
start the process so that they can continue their business in a competitive environment.

Conclusion

Our aim through piece of research was to highlight the importance of the revised national labor
law in Bangladesh and how it meets majority of the requirements of the leading general codes of
conduct. The comparison study provides a succinct matrix which illustrates the commonalities as
well as the difference between the revised Bangladesh Labor Law 2006 and the seven leading
general codes of conduct. Suppliers must comply with the national labor law to do business in
Bangladesh.

Simultaneously, they must comply with their buyers codes of conduct to supply to their
customers. The endless compliance requirements become extremely challenging for the
suppliers, both in terms of costs as well as implementation. Numerous audits are also a challenge
which suppliers are encountering. It is extremely difficult to have different setups on the same
factory floor because of the minor differences in the national labor law as well as among the
different buyers codes of conducts. In order to avoid numerous audits, many buyers are now
accepting the audits done by the general codes of conduct.

For example, if a factory is SA8000 certified or passes a BSCI audit the some buyers may forego
their own audits. This does simply the process of numerous audits. Out of the seven leading
general codes of conduct covered in this research, only two have a formal certification
procedure, SAI and WRAP. Certifications to the leading codes of conduct may act as a
competitive advantage for suppliers. However, here are significant amount of costs associated
with obtaining and maintaining these certifications. So, not all factories can sustain these costs.

The FLA does not certify individual factories but they certify brands and retailers. Compliance to
international codes and standards is an extremely vital tool to build on the image of the
Bangladeshi RMG sector. Since the 1970s, Bangladesh has been one of the main sourcing
destinations for the major international brands, retailers and buyers. The industry thrived in the
last three decades primarily by taking advantage of the trade quotas that were in place in the
global textile and apparel industry.

Also, low labor costs have always been one of the competitive advantages for Bangladesh
garments in the global sourcing market. The Bangladesh RMG sector has always had a
sweatshop image which still prevails although there have been drastic improvements in
working conditions at the factories. Currently, Bangladesh has many world class factories which
are 100% compliant and which can compete with any leading factory across the globe. 15

A comparative analysis between the Bangladesh Labor Law 2006 and seven general codes of
conduct

There are approximately 4,500 RMG factories in Bangladesh and only a certain fraction fall into
the world class category. The other factories must strive to improve their compliance status so
that the overall image of the Bangladeshi industry is improved. By simply complying with the
national labor law, all factories can cover majority of the international requirements. The
Bangladesh Labor Law 2006 is a strong piece of legislation which covers majority of the
international standards. By complying with this law, suppliers are only a few steps away from
achieving the international standards. Suppliers should capitalize on this point.

As mentioned above, the government and associations have many tools to assist suppliers in
improving their compliance status. Strong monitoring procedures are also in place to assist the
suppliers in maintaining their compliance status. In the quota free apparels market, Bangladesh
must compete with all the major players to sustain its existing share as well as expand into new
territories. Compliance is a key requirement for all global buyers hence Bangladeshi suppliers
must equip themselves with these tools and continue the successful legacy of this dynamic
industry.
Annex I - Classification of general codes of conduct

Annexures

Annex I: Classification of general codes of conduct

Complete Name Social Accountability Int. (SA8000) Website Initiative/ Year of Foundation
Members and Stakeholders www.sa-intl.org US-American consumer organization CEP 1997

Ethical Trading Initiative (ETI) www.ethicaltrade.org Various NGOs 1998

Fair Labor Association (FLA) www.fairlabor.org Grew out of the Apparel Industry Partnership
(AIP), an initiative of US President Clinton in 1996. 22 Apparel and footwear companies, 194
Colleges/universities 33 NGO's

Fair Wear Foundation (FWF) www.fairwear.nl Dutch CCC and FNV 1999

Business Social Compliance Initiative (BSCI) www.bsci-eu.org 2003 (emerged from AVE)

Worldwide Responsible Apparel Production (WRAP) www.wrapapparel.org American Apparel

Manufactures Association (now American Apparel and Footwear Association) 1998
Participating Organizations are 20 apparel associations around the world

Joint Initiative on Corporate Accountability and Workers Rights (JOIN) www.JO-IN.org Joint
initiative of CCC, ETI, FLA, FWF, SAI, WRC. Working on a pilot project in Turkey since 2003
6 international organizations 7 multinational buyers and facilities in Turkey producing for these
buyers Trade unions NGOs Industry and employer associations Pilot project in Turkey with 7
international buyers exporting to Europe ad US

11 companies, 2 trade unions, 7 NGOs

39 Companies, 4 trade unions, 17 NGOs

37 Companies, 2 Associations, 2 trade unions, 4 NGOs

78 retail and trade companies, 4 associations

Regional Distribution of members Reach

Mainly US and Europe

Companies exporting to the UK

Mainly US and Europe

Primarily intended for the Dutch market. Also EU

Mainly Europe

Mainly US, South America. Also in Asia and Africa

Emphasis on factory/farm/facility, but also recommendations for supply chain industry wide

The whole supply chain of garment, food and horticulture products including contractors,
subcontractors, suppliers and licensees

The whole supply chain of garment products including contractors, subcontractors, suppliers and
licensees, with the exception of minimal facilities (shortterm suppliers and small volumes)

The whole supply chain of garment products including suppliers, sub-contracted suppliers,
licensees and sub-contracted supplier to licensees

Whole supply chain of consumer goods. Suppliers must ensure that the code of conduct is also
observed by all subcontractors involved in the production processes of final manufacturing
stages, for example confection and assembly activities, carried out on behalf of BSCI members.

All sewn product Whole supply chain of manufacturing facilities garment products anywhere in
the world, including direct sewn product production facilities, independent sewn product
manufacturing suppliers, licensees, and subcontractors
Annex I - Classification of general codes of conduct

Complete Name Internal Structure

Social Accountability Int. (SA8000) Head Quarter based in New York Board of Directors: 2
NGOs, 1 lawyer, 1 consultant, 2 businessmen, 1 president Advisory Board: NGO's, 2 unions, 11
companies. Both have equal representation between business and nonbusiness representatives.
Meets 3 times a year. Every year SAI holds an international conference (around 150 participants)

Ethical Trading Initiative (ETI) Head Quarter based in London Board: 9 voting directors
(corporate, trade union and NGO) and one non-voting director from DFID; meets 4 times a year
4 caucus groups: trade union, NGO, food and general merchandise caucus, meet 4 times a year
different working groups for projects every two years ETI holds an international conference for
all stakeholders Roundtables for members (4-8 a year)

Fair Labor Association (FLA) Head Quarter based in Washington Board of Directors is
composed by representatives of 6 companies, 6 NGOs, 3 universities as well as the chair

Fair Wear Foundation (FWF) Head Quarter based in Amsterdam Board: comprises
Organizations representing the garment suppliers, the garment retailers, trade unions, NGOs.
Each with equal voting rights. Committee of Experts from the above mentioned groups supports
staff and board