EU Considers Trade Action After Bangladesh Factory Collapse

Rescuers at the scene after the Bangladesh building collapse in April.
Munir Uz Zaman | AFP | Getty Images
Rescuers at the scene after the Bangladesh building collapse in April.

The European Union voiced strong concern over labor conditions in Bangladesh after a building collapse there killed hundreds of factory workers, and said it was considering action to encourage improvements, including the use of its trade preference system.

Anger has been growing since the illegally built structure collapsed last week, killing at least 390 people. Hundreds remain unaccounted for but rescue officials said on Tuesday they had given up hope of finding any more survivors.

It was the third deadly incident in six months to raise questions about worker safety and labor conditions in the poor South Asian country, which relies on garments for 80 percent of its exports.

(Read More: Bangladesh Factory Owner Arrested at Border)

Representatives of major international garment buyers - some facing sharp criticism in home markets for doing too little to safeguard the mostly female workers making their clothes - met industry representatives in Dhaka on Monday and agreed to form a joint panel to put together a new safety plan.

Clothes made in five factories inside the Rana Plaza building on the outskirts of the capital, Dhaka, were produced for retailers in Europe and Canada.

Late on Tuesday, the EU issued a brief statement expressing concern and suggested it would look at Bangladesh's preferential trade access to the EU market in considering taking action to encourage better safety standards and labor conditions.

"The EU is presently considering appropriate action, including through the Generalized System of Preferences (GSP) - through which Bangladesh currently receives duty-free and quota-free access to the EU market under the 'Everything But Arms' scheme - in order to incentivise responsible management of supply chains involving developing countries," said the statement, issued by EU foreign policy chief Catherine Ashton and Trade Commissioner Karel de Gucht.

About 3.6 million people work in Bangladesh's garment industry, making it the world's second-largest apparel exporter. The bulk of exports - 60 percent -go to Europe.

Ashton and de Gucht said they were deeply saddened by the "terrible loss of life", particularly because it followed a fire in the Tazreen Fashion factory in a Dhaka suburb in November that killed 112 people.

"The sheer scale of this disaster and the alleged criminality around the building's construction is finally becoming clear to the world," Ashton and de Gucht said.

(Read More: Big Brands Face Scrutiny Over Factory Safety After Bangladesh Collapse)

Also on Tuesday, following a private emergency meeting of Canadian retailers, the Retail Council of Canada said it would develop a new set of guidelines.

That emergency meeting brought together retailers including Loblaw, Sears Canada and Wal-Mart Canada, to discuss how they would deal with the tragedy.

Representatives of some 45 companies, including Gap, H&M, J.C. Penney, Nike, Wal-Mart, Britain's Primark, Marks & Spencer and Tesco, and Li & Fung, also met officials from the Bangladesh Garment Manufacturers and Exporters Association in Dhaka on Monday to discuss safety.

The Retail Council of Canada, which represents operators of more than 43,000 stores in Canada, said it would work with international organisations, the Bangladeshi government and others to find ways to address safety in the Bangladesh garment industry.

Primark and Loblaw have promised to compensate the families of garment workers killed while making their clothes.

Agonizing Wait

With no hope left of finding survivors, heavy machinery is being used to clear concrete and debris from the site in the commercial suburb of Savar, about 30 km (20 miles) from Dhaka.

It was still an agonizingly slow process for families waiting for news on loved ones who worked in the Rana Plaza, which collapsed with about 3,000 people inside. About 2,500 people have been rescued so far, many of them injured.

With angry protests continuing daily since Bangladesh's worst industrial accident, the building's owner was brought before a court in Dhaka on Monday, where lawyers and protesters chanted "hang him, hang him".

About 20 people were injured on Tuesday as police fired teargas, rubber bullets and water cannon to disperse protesters in Savar calling for the death penalty for the owners of the building and factories.

(Read More: ECB Says Ditching Austerity Would Not Help Euro Zone)

Officials in Bangladesh have said the eight-story complex had been built on swampy ground without the correct permits, and more than 3,000 workers entered the building last Wednesday despite warnings it was structurally unsafe.

Eight people have been arrested - four factory bosses, two engineers, building owner Mohammed Sohel Rana and his father, Abdul Khalek. Police are looking for a fifth factory boss, Spanish citizen David Mayor, although it was unclear whether he was in Bangladesh at the time of the accident.

The garment industry employs mostly women, some of whom earn as little as $38 a month.