Legal Report

Research Report

Submitted in Partial Fulfillment of the Requirement Course

MBA 515: Legal and Ethical Issues in Business

“Bangladesh Scrambles to Meet US Deadline onTrade Unions ”

Submitted by Ahmed Sayed Jamal (0421035)

Submitted to Dr. Tanvir A. Khan School of Business

Independent University, Bangladesh

ACKNOWLEDGEMENT

This is my humble attempt to present gratitude in preparing this report. This project would not have been possible without the dedication and contribution of a number of individuals.

First and foremost, I would like to express my gratitude to Mr. Dr. Tanvir A. Khan for his support for the preparation of this report. His eagerness helps me in every step of the way and encouraged me to propel myself higher.

Than I want to show my gratefulness to Mr. Kazi Habibur Rahman (Deputy General Manager, Western Fashion House) for his continuous and cordial support during my research.

Finally,

I

thank

to

Independent

University

Bangladesh

for

providing me such opportunities to work and gain experience in the professional field.

Executive summary The purpose of trade union is to establish the right of the workers in the organization. In the developed countries trade unions create a favorable impact among the employees and the organization. But unfortunately in our country we are unable to establish a positive image of trade union.

Our

trade

union

decision

is

not

solely

depend

on

our

policymakers. There is a huge impact on the preference of the other countries in our trade union decision. USA is in a strong favor of establishing trade union in our country. The two biggest investors in our EPZ Japan and South Korea are against the decision.

The international politics make it more difficult for our workers to get their right.

Hypothesis of the research

“Our trade Union establishment decision is largely depend on the Trading countries“

Methodology

Methods of Data Collection

The report is composed of both primary and secondary sources of data.

Primary Data: Primary data may be collected by the following two tools.

1. Direct Interview Method.

Primary data have been collected by informal interview with the officers. Some information regarding my report objects has been collected through discussion with different executives.

Secondary Data:

The secondary data have been collected from some journals. Also some important information is collected form Internet for the analysis.

Survey period

The survey is being conducted from March 10th to March 20th 2009.

Limitations:

Some barriers and limitations were faced while gathering information. These are as follows:

 Short period of time.  Some important respondent may be missing during the

interview.

 Because of the limitation of information, some assumption was made. So, there may be some mistake in the report.

Introduction Export is a very important variable in the overall trade balance of a country. Over a long period of time our Government facing a trade deficit in the international business. That’s why it’s becoming so important for the Government to increase the amount of export. Our international business is highly depending on some countries. USA is one of them. Almost half of the total export

is accounting in USA. Other major investors in our EPZ’s are Japan and South Korea. These countries not only contribute in our total export also in the employment in our country. That’s why our government has to take policy that serves the interest of these countries. Bangladesh and the USA have signed a GSP (generalized system of preference) in the year 1991. This system helped Bangladesh in garments exports. The initial period of this contract was 10 years. After it ended in 2001 USA offer an extension of the contract for another three years. But they have imposed some condition. The condition impose Bangladesh allows trade union. Otherwise it will no longer get GSP facilities. The policymakers in Bangladesh are looking for a devise ways to make both USA and foreign investors happy. Foreign investor’s threats are clearly make an impact on the Government mind. As they are facilitate a huge employment in the country.

Analysis of the Major Issues There are some important factors to think regarding these issues. Establishment of trade union is becoming more a political issue rather than providing employee rights. There are some hidden factors that need to be analyzed to understand the depth of these issues. Why Government are in dilemma in Establishing Trade Union Our export is largely depending on the trade with some specific countries. As mention earlier USA, Japan and South Korea are the major countries. But there is a significant difference in the preference regarding trade union among these countries. USA is the larger buyer of Bangladeshi product. 44 percent of the total export is traded on USA. That’s why it become very difficult for our policy makers to take a decision that hurt their interest. On the other hand Japan and South Korea is the

major investor in our country. Two of the major EPZ’s in our country are running with the help of these investors. In every year they are creating more than 10,000 employments in our country. Reduction in the unemployment rate is a huge factor in the overall performance of the economy. USA is in strong favor of establishing trade union in our country. US have threatened to cancel trade concessions to Bangladesh if it doesn’t allow workers to form labor unions. On the other hand Japan and South Korea are not in favor of forming trade union in Bangladesh. Restrictions on trade union are one of the many incentives investors enjoy at the EPZs. Different opinion of the major trade countries make it difficult for the policymakers of Bangladesh to bring a solution of these problems.

Cost Benefit Analysis in Establishing Trade union

USA threatened to cancel the GSP if our Government does not allow the workers to establish trade union. GSP contributes a small portion of the total export. Under GSP Bangladesh export to the US fetch some US $40 million annually. But export from the US $ 1.2 billion that’s one fifth of the countries total exports. From monitory value GSP has a lower economic value compare to the other factors. On the other side Japan and South Korea is the major investor in Bangladeshi EPZ. Every year they have contributed in the employment of more than 10000 workers. Employment opportunity is a huge factor in poor country like Bangladesh. Our Government fined it difficult to establish trade union for the survival of GSP. It will create dissatisfaction among the major investors. Other issues in Establishment of Trade union  Past experience Bangladesh has a very forgettable experience regarding trade union issues in the past. Several hundred state owned enterprises have closed after incurring billions of dollar losses while others are awash in red ink. Militant trade unionism and theft by union leaders are mostly responsible for the failure of trade union in Bangladesh.

Some of the leaders earn so much money during the period.



Many workers are not in favor of Trade Union Not only Government is feel hesitate to establish trade union. Many workers are not in favor of Trade Union. From the past experience they were not receiving any significant benefit from trade union. Instead of establishing trade union they just wanted to work in peace.

 Lack of expertise of Government in handling trade union issues Many experts reported Bangladesh trade unions are far from the stage where they can set ideals for any organizations. Also when problem arises in the past Government was unable to solve it in a proper way. Most of the time trade union issues become a political debate at the end. Government requires a running program with trainers from the International Labor Organization (ILO) to train workers on how to operate a modern trade union. It’s a costly and time consuming approach. Hidden factors that affects our policy  Cold war between USA and Japan

USA and Japan are the two major economic forces in the world. There always has been a cold war between these two countries. All around the world the economic decision of these countries are not supportive to each other. Our scenario is not an exception.  Highly political influence Trade union is an independent association that formed to establish workers right. But in our case the definition of trade union is little bit different. There is a highly political influence in our trade unions. That reduces the effectiveness of this organization.  Lack of Economic strength The bottom line is we can not take any strong decision regarding trade union because of our Lack of Economic strength. Our economy is highly depending on the activity of some other countries. Most of the time we have to take decision in favor of their interest.

Recommendation

Trade union is an integral part in the establishment of workers right. In many countries workers have been benefited from trade union. Our Government also needs to take proper steps in the establishment of trade union. Governments can take the following steps. ➢ Strong international trade policy Government need to establish a strong international trade policy that helps us in the reduction of the dominance of other country. In such case Government might take the decisions that serve the interest of our own people. ➢ Reduce dependency on specific countries Our international trade should not be dependent on some specific country like USA, Japan or South Korea. Government should try to make relationship with other countries so we can make our trade in a diverse way. In that case investor or buying countries might not able to impose their choices in our policies. ➢ Government should handle the trade union issues more efficiently In the past our Government was unable to handle the trade union issues successfully. Most of the time it became a political issue.Government need to handle these issues more carefully and efficiently. Any one should not take advantage of this issues.

Conclusion Trade Union is an important issue in establishing worker rights and improves the working condition. But in our country prospective it becomes a completely different issue. Our workers are still far away to get the rights. Most of the workers are not even receiving basic rights. Still we can not say trade union is the solution to overcome from the situation.