Chapter 4

EPZ’s Workers’ Welfare Association

There is a question about trade union at EPZ, but Bangladesh has WWA, which is
almost similar to trade unions in terms of enjoying workers rights, but we must
adjust with the International Labour Organisation (ILO) rules. It has been discussed
with the delegation.

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Insight Story 7: EPZ Investors Worried Over Trade Union
Foreign investors in the export processing zones (EPZs) do not want trade unionism as any agitation or
demonstration in such specialized 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 Labor-Congress of Industrial Organizations), US Embassy in Dhaka, International Labor
Organization, 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.
Foreign investors in the export processing zones (EPZs) do not want trade unionism as any agitation or
demonstration in such specialized 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 Labor-Congress of Industrial Organizations), US
Embassy in Dhaka, International Labor Organization, 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.

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.

Source: Refayet Ullah Mirdha, The Daily Star, 12:00 AM, August 31, 2014 / LAST MODIFIED: 01:53 AM,
March 08, 2015

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 (1), the Executive Chairman shall verify and be
Learning Objective 1: confirmed that not less than 30% (thirty percent) of
Understand the Concept of EPZ’s the eligible workers have subscribed to the
Workers’ Welfare Association (EWWA) application by signatures or thumb impressions.

4.1 Meaning of EPZ’s Workers’ A form signed by a worker under this section shall
remain valid up to six months from the date of its
Welfare Association (EWWA)
signature.
According to EPZ Workers’ Welfare Association
If ultimately the workers association is not formed
and Industrial Relations Act, 2010 “Workers’
on the basis of the result of the referendum held
Welfare Association” means an association
(discuss in the following section), no employer shall
formed by workers for the purposes of regulating
in any manner discriminate against a worker for
the relations between workers and employers
subscribing to an application and any such
under this Act. EPZ Workers’ Welfare Association
discrimination shall be deemed to be an unfair labor
and Industrial Relations Act, 2010 shall apply to
practice of the employer.
workers and employers in the Export Processing
Zones established under the Bangladesh Export 4.3 Referendum
Processing Zones Authority Act, 1980.
If the Executive Chairman is satisfied that not less
Since November 1st, 2006, the workers engaged than 30% (thirty percent) of the eligible workers
in an industrial unit situated within a Zone shall, have applied in prescribed forms demanding the
subject to the provisions of this Act, rules or formation of association, he shall arrange to hold a
regulations, have the right to form an association referendum of the eligible workers of the industrial
for performing functions relating to industrial unit within the Zone, within a period not later than
relations. five days from the date of receipt of the application
to ascertain the support of the eligible workers in
Learning Objective 2: favor of the formation of Workers’ Welfare
Understand the process of Formation Association.
and Registration of EWWA
If more than 50% (fifty percent) of the eligible
4.2 Formation of EWWA workers do not cast their votes, the referendum
Any employer is registered as a company with a under this section shall be ineffective. If more that
separate certificate of incorporation and 50% (fifty percent) of the workers cast their votes,
operating as such in a Zone, there shall have one and more than 50% (fifty percent) of the votes cast
Workers’ Welfare Association under the are in favor of the formation of a Workers’ Welfare
company in that Zone. Provided that if there are Association, the workers in the said industrial unit
two or more industrial units in a Zone under an shall, thereby, acquire the legitimate right to form a
employer registered as a company, the units shall Workers’ Welfare Association under this Act; and
be deemed to be one industrial unit for the the Executive Chairman shall be required to accord
purposes of this section. registration to that association within 25 (twenty-
five) working days of the date of the referendum.
If the workers in an industrial unit situated within
of a Zone intend to form an association, not less The referendum shall be held through secret ballots
than 30% (thirty percent) of the eligible workers and until any procedure is prescribed, the
of the industrial unit shall apply in a prescribed referendum shall be held according to the
form to the Executive Chairman demanding a procedure determined by the order passed by the
Workers’ Welfare Association to be formed. Executive Chairman. If the workers fail to obtain
Upon receipt of an application under sub-section

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mandate for formation of Workers’ Welfare
Association in a referendum held under section 7,
no further referendum shall be held for the same
industrial unit until one year is expired since
thereafter.
4.4 Constitution
After referendum, if the workers agreed upon that
they are interested to form Workers’ Welfare
Association, within 5 days of referendum, the
Executive Chairman shall ask the workers to form a
Constitution Drafting Committee, hereinafter
referred to as the Constitution Committee
consisting of not more than nine representatives
with one of them as the Convener. This committee
has to submit a constitution within a period of 15
days.
Note that, in such constitution, no provision shall
be contrary to any provision of the EPZ Workers’
Welfare Association and Industrial Relations Act,
2010. The constitution must include provision
related General Council - the members of which
shall be the eligible workers registered as members
of the Workers’ Welfare Association, Executive
Council - consisting of maximum 15 (fifteen) and
minimum 5 (five) posts including a President, a
General Secretary and a Treasurer and all its
members shall be elected by the members of the
General Council and if the number of the eligible
workers for casting votes exceeds 500 (five
hundred), the members of the Executive Council
shall increase by one for every 100 (hundred) after
5 (five) members, but the total number of the
members shall not exceed 15 (fifteen).
Such constitute must also include provisions
related with name, address, objectives of the
welfare association, manner to becoming a
member, sources of fund and usage of fund,
member benefits, fine or forfeiture, manner of
maintaining list of members and inspection of such
list by its members, constitution amended, varied
or repealed, safe custody of the fund and annual
audit, manner of de-registered, General Council
Election, want of confidence, meeting of Executives
Council and General Council – at least one in four
months and one in a year respectively.
No Workers’ Welfare Association shall obtain or
receive any fund from any source outside of the
Zone without the prior approval of the Executive
Chairman.
The Executive Chairman, on being satisfied that the
constitution has been framed with due compliance
with the provisions of this Act and dose not
contravene any provision of this Act and rules or
regulations, shall approve the constitution and shall
issue a latter of approval to that effect within 5 (five)
days.
4.5 Registration
The Convener of the Constitution Drafting
Committee shall, in a prescribed form, apply to the
Executive Chairman for registration of the Workers’
Welfare Association formed under the constitution
approved. Every application for registration of
Workers’ Welfare Association shall be made to the
Executive Chairman and shall be accompanied by
the following matters, namely name and address,
date of formation, title, name, age and addresses of
the members, statement of paid membership, and
three copies of approved constitution.
The Executive Chairman, on being satisfied that the
Workers’ Welfare Association has complied with all
the requirements of this Act and has been formed
within the framework of the approved constitution,
shall register the Workers’ Welfare Association in
the prescribed register within a period of 10 days
from the date of receipt of the Application.
If the Executive Chairman finds the application to be
deficient in a material respect or respects, he shall
communicate his objection in writing to the
Workers’ Welfare Association within a period of 10
days from the date of receipt of the application and
the Workers’ Welfare Association shall reply thereto
within a period of 10 days from the date of receipt
of the objections.
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When the objections raised by the Executive order directing the Executive Chairman to register
Chairman are satisfactorily met, the Executive the Workers’ Welfare Association and to issue a
Chairman shall register the Workers’ Welfare certificate of registration, or may reject the
Association and if the objections are not application.
satisfactorily met, the Executive Chairman may
The Executive Chairman, on registering an
reject the application. If the application is rejected
association under section 14, shall issue a certificate
or the Executive Chairman has, after settlement of
of registration in the prescribed form. If a certificate
the objections, delayed disposal of the application
is issued it shall be deemed to be the conclusive
beyond the period of 10 days, the Workers’ Welfare
evidence that the Workers’ Welfare Association has
Association may apply to the Tribunal which, for
been duly registered under this Act.
reasons to be stated in its judgment, may pass an

Application Referendum Constitution Registration

Figure: EPZ Workers’ Welfare Association Formation and Registration

Insight Story 8: Government to Adjust Workers Welfare

Association with ILO Standard
There is a question about trade union at EPZ, but Bangladesh has WWA, which is almost similar to trade unions in
terms of enjoying workers’ rights. Commerce Minister Tofail Ahmed on Tuesday said the government will adjust
Workers Welfare Association (WWA) with the ILO convention to ensure equal rights for workers employed in the
country’s Export Processing Zones and beyond.

The minister came up with the comment while addressing journalists after a meeting with the European Union (EU)
parliamentary delegation led by Arne Lietz, a member of the European Parliament at his office on Tuesday. “There
is a question about trade union at EPZ, but Bangladesh has WWA, which is almost similar to trade unions in terms
of enjoying workers’ rights,” the minister said. “But we must adjust with the International Labor Organization (ILO)
rules. It has been discussed with the delegation.”

The delegation will meet the Ministry of Labor and Employment and Prime Minister Sheikh Hasina to discuss the
issue. Bangladesh will give importance to the issues, which the EU is concerned with, since benefits come from them,
said Tofail. There will not be any problem between EU and Bangladesh, and if any, they would be resolved through
discussion, the minister said, adding that all issues would be discussed in the meeting on Sustainability Compact to
be held in May.

Talking on the EPZ workers’ rights issues, Arne Lietz, a member of the European Parliament said EPZ Law needs to
be rethought. He urged the authorities concerned to come up with the standard of UN convention and ILO standard
in terms of workers’ rights inside and outside EPZs. Replying to a question on Ashulia labor unrest that took place in
December last year, Arne said it has been discussed with the international partners like H&M, C&A and others
working here.

The workers are fighting for better wages system and it is very logical. “We are experiencing such demonstration
everywhere in our countries and sometimes we see street blockade. It is a part of trade union to fight for the right,”
according to the head of delegation.

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He hopes that a strong result might come from tripartite agreement and it is a good start to develop new rules and
pathways to deal with the issues. The EU delegates also talked on the amendment to Labor Act to address the issue
relating to freedom of association and collective bargain, to introduce same standards and equal labor rights in and
outside EPZs factories and simplify the trade union registration process.

“We feel there is a need for amendment to some provisions of Labor Act and we will sit with the national tripartite
consultation committee on the amendment,” said Mujibul Haque, state minister for labor.

Source: Ibrahim Hossain Ovi, Dhaka Tribune, Published at 11:57 PM March 28, 2017

Case Study 4: ‘Welfare Associations’ to Negotiate for Rights

at Bangladesh EPZ
The Government of Bangladesh today approved, in principle, draft of a labor law for Export Processing Zones (EPZ)
with the provision to allow workers to form welfare organizations to bargain for their rights. The approval of the
draft law was given at a regular meeting of cabinet held at Secretariat with Prime Minister in the chair. A special
committee formed by the Prime Minister’s Office prepared the draft after discussing with the owners, workers and
other stakeholders in EPZs, the Cabinet Secretary told reporters after the meeting.

He further clarified that the association approved in the new draft law was a “Welfare Association” and not a “Trade
Union.” Currently, the EPZ Workers’ Association and Industrial Relations Act 2009 does not allow trade unions, a
term not mentioned also in the draft endorsed by the cabinet. As per the proposed law, at least 30 percent workers
of a factory within an export processing zone will have to apply for registration with the Bangladesh Export
Processing Zone Authority (BEPZA) to form an association. After registration, the association’s executive committee
will be elected for one year. One candidate or a panel will need at least 50 percent votes to be declared a winner
and there will be a fresh election in case of fewer votes.

A Trade Union must be registered with the Directorate of Labor under the Ministry of Labor in order to be legally
recognized whereas the EPZ Workers’ Welfare Associations can be registered with the BEPZA only. Thus, it remains
an association and not a trade union legally. The associations or societies do not have collective bargaining rights
but could negotiate with the employer on working conditions, remuneration or payment for productivity
enhancements and worker education programs.

Special legislation on unionization has prohibited the formation of unions in the country’s eight Export Processing
Zones (EPZs) which are exempt from the application of the Labor Act and the Factories Act, thereby excluding
workers in the zones from the coverage of laws governing trade union rights, wages, hours and safety and health
standards. Instead, the government enacted the EPZ Workers’ Association and Industrial Relations Act in 2004
(amended in 2009) that allows only for limited freedom of association in the EPZs. The law initially envisaged the
establishment of ‘Workers Associations’ in the EPZs. A 2010 amendment renamed the ‘Workers Associations’ as
‘Workers’ Welfare Societies’ but essentially did not change anything.

Ensuring the Right to Organize and Collective Bargaining through formation of trade union in the (military run) Export
Processing Zones (EPZ) is one of the major requirements of the U.S.A. for the reinstatement of Generalized System
of Preferences (GSP) trade benefits which was suspended in June 2013. The EPZs are governed by a separate agency,
the Bangladesh Export Processing Zones Authority, and by separate laws. By tradition, the authority has been run
by a military officer, active duty or retired, and many factories have hired retired soldiers to oversee security.

A recent interagency review of the GSP Action Plan for Bangladesh led by the Office of the U.S. Trade Representative
(USTR) found that more needs to be done to improve worker rights and worker safety in Bangladesh. The review
also found that the Government of Bangladesh has not yet implemented substantial parts of the Action Plan. The
government is behind schedule in carrying out many hundreds of critical safety inspections in garment factories, as
well as meeting its commitments to hire additional inspectors.

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The government has also been slow to respond to continuing reports of harassment and violence against labor
activists. The review concluded that the government needs to develop a credible and effective mechanism for
responding to and addressing allegations of unfair labor practices. Since the suspension of GSP, the government has
also not advanced the labor law reforms called for in the Action Plan, including changes to ensure that workers are
afforded the same rights and protections in Export Processing Zones (EPZ) as in the rest of the country, the USTR
said.

The European Union (EU) called for substantial progress on labor issues for Bangladesh’s continued Generalized
System of Preferences (GSP) trade privileges. Currently, Bangladesh enjoys the GSP facilities that provide quota and
duty free access to the EU member states all items from Bangladesh but arms. The EU Trade Commissioner Karel De
Gucht repeatedly warned about improvements in labor rights, most notably in the Export Processing Zones
of Bangladesh. “Of course, the reality is that there’s still much more to do. Most urgently, implementing regulations
on labor reform must be enacted soon. Improvements in labor rights must be extended to the Export Processing
Zones,” De Gucht said while addressing an informal ministerial meeting of the Organization for Economic
Cooperation and Development (OECD) in Paris on 26th June 2014. The Commissioner further said all the enabling
conditions must be in place, not only in law but in practice, for workers to organize into trade unions and make their
voice heard at the factory level.

“Over the coming weeks, the European Commission will be working on a full assessment of where we stand today.
Once that is done we hope to call a meeting this autumn of all parties to the Compact as well as other stakeholders
to get their perspective and set the agenda going forward,” Gutcht said. He said the European Union had an
obligation to act because it grants duty-free and quota-free tariff preferences to Bangladesh which have been a boon
to the country’s export performance.

From the Bangladesh perspective the “in principle” approval of the “draft” Bangladesh EPZ Labor Act 2014 allowing
“Welfare Association” and not a “Trade Union.” may seem to be a step in the right direction defusing tension
between Bangladesh and the major trading partners, the EU and USA. However, the full content and detail
explanations of the “yet to be in force” law may not offer enough substances to fully convince the largest client of
Bangladesh’s garment business, the EU, which imported over 9 billion euros worth in 2013 and other stakeholders.

Bangladesh’s failure to live up-to its specific and time-bound commitment to improve levels of occupational safety
and health and promote responsible business conduct and greater respect of labor rights, with a particular focus on
freedom of association and the right to collective bargaining may leave the EU no option but to take “appropriate
action”, such as limitation, temporary suspension or cancellation of the GSP in order to remain credible, most
importantly to their citizens across Europe.

Following the Rana Plaza disaster on the 24th April, the EU Trade Commissioner De Gucht and High Representative
Ashton made joint statements on the 30th April 2013, expressing their concerns about the labor conditions, including
health and safety provisions, for workers in factories across the country. According to the statement, “The EU is
presently considering appropriate action, including through the Generalized System of Preferences (GSP) in order to
incentivize responsible management of supply chains involving developing countries”.

Source: Ivonne Stein, http://bhuiyan.com/insight/welfare-associations-to-negotiate-for-rights-at-bangladesh-

epz-386, March 3, 2016 at 9:45 p.m.

Requirement:
1. State the differences between Trade Union and Workers’ Welfare Association.
2. Identify the reasons for approving “The EPZ Workers’ Welfare Association and Industrial Relations Act, 2010”.
3. Do you think Workers’ Welfare Association is the solution to solve the labor unrest problem in EPZ of Bangladesh?
Justify your answer.