Bangladesh, Compliance and ethical trading, Corporate Responsibility/Compliance

Working standards and the Bangladesh RMG sector – the challenge for Brands, Retailers and Producers

In a list of  The Most Controversial Companies of the year 2012   –  published in January 2013 by a private research provider – other research providers are available  –  analysing alleged breaches of international standards relating to 10 global companies as reported in high profile news stories, the horrendous fire  which killed over 117 people at the Tazreen factory in Ashulia near Dhaka in Bangladesh in November 2012,  features at the top of the list ahead of many larger companies.

This poses a challenge to everyone involved with the garments industry around the world – and is a particular challenge for Bangladesh where RMG is the country’s biggest export and industrial employer. Should not the past 20 years of codes of conduct, compliance, inspection and audits by the industry worldwide be doing more to mitigate this sort of accident….

In part, many would argue it has – although more needs to be done  Impact assessment studies by bodies such as the Ethical Trading Initiative confirm codes of conduct and their associated audits have played a part in improving standards, particularly on easier to audit issues such as child labour. However breaches of core labour standards remain in many industries; In particular, systemic issues or risks associated with long/forced overtime hours, low pay, and discrimination are harder to control or root out. And any massively competitive industry, particularly one operating where there is a large supply of cheap labour like the Ready Made Garments (RMG) export sector in Bangladesh, is likely to face some systemic breaches of standards

–  The challenge therefore is how to spread good practices that already exist in the sector(which is building more modern factories and continuing to achieve growth becoming the 2nd biggest exporter of RMG in 2012 after China  ) and raise the playing field as a whole.

Although conscientious efforts made by some retailers and brands (and support for fair trade models by some consumers and producers eg; via,)  are beneficial and improve standards in the short term, in the long run experience suggests that empowering workers to help represent themselves is an essential but oftenoverlooked element in sustainably safeguarding and improving standards –not to mention productivity.

This is not surprising perhaps as freedom of association and collective bargaining are sensitive issues in many countries or politically restricted as in China. In Bangladesh, it is to be hoped that the government’s 2013 national action plan on fire safety and associated investigations in the wake of the Tazreen and similar fires will help to raise standards and prevent further accidents and deaths.  The various multistakeholder initiatives involving brands, unions, the ILO and the BGMEA (Bangladesh Garment Manufactures & Exporters Association) such as that convened by the global garments union (Industriall – January 2013) will hopefully provide a platform for further improvements in working conditions and labour rights; in the past, too much of the Bangladeshi political  debate has been dominated by talk of conspiracies against the industry and speculation about the cause of fires, rather than calmly dealing with first hand testimony from workers (promptly interviewed by local media and news channels) about locked doors and lack of fire exits.

In turn, more brands and buyers need to take their own commitments and responsibilities more seriously – retailers must be expected to follow best practice by fully addressing breaches of labour standards when they are highlighted and  pro-actively working to mitigate problems, implement corrective action plans and raise standards within their supply chains – if they fail to do this or walk away from a problem supplier as Wal-Mart is alleged to have done recently in Bangladesh, they will rightly face criticism.

Of course if as analysts suggest, the Bangladesh industry’s export growth has been driven mainly by low wages  (all the many genuine efforts to implement codes of conduct notwithstanding) it is easier to understand – if not agree with defensive and nationalistic responses made to calls to increase trade union rights in Bangladesh.  The sector is too important in providing jobs (and bringing millions of women into the formal workforce) for this sort of resistance not to occur. Likewise global market pressures are so competitive that many buyers are happy to take advantage of  this type of race to the bottom.

Certainly with the vast majority of bargaining power and finance within the sector lying in the hands of global  buyers and retailers, they are the ones with the most ability to facilitate improvements to standards and wages,  (which experience suggests can be a win-win by improving productivity rather than being a cost) – so this is arguably where most responsibility lies and where consumers and activists will target most pressure to help raise standards.–en/index.htm