by Richard Welford
In the wake of the building collapse in Bangladesh that killed well over 700 people, it is time to ask some difficult questions about the activities of the brands sourcing from the Rana Plaza complex. International attention has focused on poor health and safety practices, accusations of slave labor and the view, voiced in many places, that the price of clothing is now just too cheap. These debates are set to continue, but there are some very specific lessons we must learn from this tragedy. That also leads to a number of questions that the brands sourcing from unsafe, illegal Bangladesh factories must answer.
1. Codes of conduct are not working.
Most brands have supply chain codes of conduct that seek to ensure that workers in outsourced factories are protected, paid properly and treated with dignity. In the case of Rana Plaza the codes of conduct failed and the rhetoric of worker protection was not matched with reality on the ground. Why did the codes of conduct fail and why did factory inspections not reveal unsafe working practices and illegal building structures?
2. Brands cannot hide behind their sourcing companies.
Many of the large brands that we now know were sourcing from Rana Plaza were not immediately sure whether their products were actually being made in those factories or not. Some even tried to shelter behind an excuse that it was their sourcing companies that placed orders in unsafe factories. That is simply not good enough and such brands need to explain why they did not do enough to ensure that their own products were made in a responsible way.
3. Brands cannot hide behind industry initiatives.
It is equally true that some brands created a smokescreen around their activities by citing their involvement with institutions such as the Ethical Trading Initiative. Such initiatives can help committed brands to improve their social responsibility performance but are no substitute for making sure that a brand’s own products are made in a safe and responsible manner.
4. Providing poor people with increased incomes is no justification for abysmal labor practices.
While it is true that garment factories have provided much needed jobs and incomes, a minimum wage of only $38 a month is still tough to live on in urban areas such as Dhaka. Providing incomes to workers is no excuse for exploitative working conditions and the treatment of people as modern day slaves. Why are brands not raising the bar and ensuring that workers are paid living wages and ensuring their safety?
5. The tragedy cannot be separated from corruption.
We now know that the illegal building that housed the factories was at the center of a number of corrupt activities involving the owner, construction companies and building inspectors. Moreover, it seems that the owner had close relationships with people in government. In a business environment where corruption is endemic, the brands that source from Bangladesh sweatshops need to explain in detail why they continue to do business in a location where it is difficult to get anything done without being involved in or complicit with some sort of corruption along the supply chain.
6. Workers are an important part of the solution.
And yet, workers rights have been exploited, unions have been barred and in most factories worker complaints procedures and grievance mechanisms are nonexistent. Allowing workers to raise their own concerns about their treatment and their safety is an important part of improving working conditions. The brands need to tell us why they have been happy to see workers denied basic rights and worker representation side-lined.
7. There is a major disconnect between compliance departments and the procurement process.
To be blunt, compliance managers want to ensure that factories follow corporate codes of conduct, but procurement departments are interested in little more than price and delivery times. When there is a conflict between the two departments, we now know who wins in the battle for cheaper goods. Why is compliance not fully embedded into the procurement process?
8. Responsible brands will tell us why they are in Bangladesh.
If low-cost production, quick turnaround times and the flexibility to change orders with little notice are the reasons for being in Bangladesh, why do the brands not tell us why that also means that they are willing to tolerate hazardous working conditions and the abuse and exploitation of Bangladesh workers?
9. Trade rules need to favor developing countries but also protect human rights.
While preferential trading status has been granted to many developing countries, including Bangladesh, in order to encourage growth, development and poverty reduction, such initiatives must also protect the rights of workers. There now needs to be a concerted effort to integrate worker protection and human rights into world trade rules. I wonder if the brands are willing to take a lead?
10. We are now at a turning point.
It has taken more than 700 deaths for the public to wake up to the fact that the true price of low-cost clothing is exploitation of labor and unsafe working conditions among some of the most vulnerable people in the world. Protests against high street brands in Europe should signal a wake-up call for those brands that continue to push down prices at the expense of basic human rights. Let’s have a comprehensive explanation from these brands about why their products are so cheap and let’s see some transparency over how much is being paid for clothing as it leaves the factory gates in Bangladesh.
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.