The road from Rana Plaza 24/04/16

Niaz Alam, Dhaka Tribune op-ed 24 April 2016

Three years on, the scale of the pain caused by the Rana Plaza tragedy remains as shocking as ever.

Among the hundreds of RMG workers who survived the factory collapse that killed 1,135 people on April 24, 2013, three fifths still suffer serious physical and psychological after-effects. Around half are unemployed and less than one in 20 wish to return to work in the garment industry.

The reminder provided by the anniversary will hopefully boost ongoing efforts to aid, rehabilitate, and provide solidarity to all survivors and the families of the bereaved.

The ILO chaired fund set up by the Rana Plaza Arrangement backed by the government and leading brands has made invaluable progress in enabling support to be provided for victims in line with the standards required by ILO Convention 121, without getting delayed by legal disputes.

Those brands who led the way in supporting the Arrangement deserve recognition for acting transparently to speed the flow of compensation available to victims.

It was tacit acknowledgement on their part that the vast majority of bargaining power and finance within the garment sector lies in the hands of global buyers and they are the ones with the most ability to facilitate improvements to standards and wages in the industry.

As for the people most directly responsible on the day, the building owners and managers who forced workers back into a factory which had been officially declared unsafe, murder charges were filed last year against 42 different people and the city development authority RAJUK has filed a separate case against 13 people, for flouting the National Building Code.

Hope remains that the wheels of justice will keep turning and the survivors’ needs will not be forgotten.

For Bangladesh, the anniversary is a salutary reminder of the need to redouble efforts to build a better future for the millions of people who work in or are dependent on the RMG sector.

Building a safer, more sustainable garment industry will be the best and most lasting memorial to those who suffered at Rana Plaza. To reach this goal, all stake-holders in the global garment chain need to stay focused on co-operative efforts to raise standards by remembering:

1. There is no substitute for vigilance

Official government efforts and the Accord and Alliance brand led stake-holder safety initiatives are making a real and meaningful difference.

Factory inspections are steadily and surely identifying and repudiating areas for improvement.

Last year, for instance, there were only five incidents of fires in the whole industry which passed without loss of life. This compares with some 250 officially recorded garment factory fires taking place during 2012, which took the lives of 115 people. The large decline in fires and improved safety rate is a sign of how increased monitoring and growing awareness among workers and factory owners are helping to prevent accidents.

Renewed attention has also been given to labour rights issues and the minimum wage was raised after a long hiatus.

2. Co-operation is key

Stake-holder collaboration is vital to help build the long-term partnerships needed to help grow Bangladesh’s garment manufacturing sector as a safe and sustainable industry.

The stake-holder safety initiatives and Rana Plaza Arrangement signal how industry wide co-operation can help bring about a sea-change in attitudes.

Amid an ever competitive global marketplace, brands and buyers need to keep playing their part in working to help factory owners secure the finance to fund improvements.

It is in everybody’s interest to raise standards here and now in Bangladesh, where the industry is well-rooted than elsewhere where the same downward pressures on prices and standards create the same challenges.

Investing more in long-term orders and building closer relationships with well-performing producers, is key to improving the sector’s cash flow and securing new funds to keep upgrading standards.

It is a testament to the Bangladesh garment industry’s collective resilience that it has continued to grow and reach out to new markets despite all the pressures it is facing. There are encouraging signs that leading manufacturers and the BGMEA are now taking more of a lead in building better factories and investing more in research and development to raise productivity in the apparel industry.

Much more co-operation is needed to ensure the benefits of improved conditions and better safety standards reach across all the tiers of the supply chain.

The short lead times, low margins, and large amount of sub-contracting inherent in fast fashion, make it imperative that all stake-holders work closely to identify and close off loopholes which enable codes of conduct to be broken.

3. Government must play its part

The government has to do more to ensure it fully enforces safety standards and labour laws.

It is welcome then the Department of Inspection for Factories and Establishments now has  277 inspectors to ensure welfare, safety, and health of human resources working in industrial sectors, compared to just 42 three years ago.

The government also needs to keep up a national focus on enhancing labour rights and developing better workplace insurance systems. This can help not only improve working conditions and increase the appeal of Bangladeshi goods, but also strengthen the industry’s case for securing a fairer deal from importing nations.

Lack of land and reliable energy supplies are the two biggest deterrents that impede investors from developing safer, modern factories. It is still vital then for the government to facilitate and attract greater investment in new factories by freeing up underused state owned land for the development of EPZs and industrial parks.

4. A better future needs a level playing field

Despite the WTO Bali package, it is telling that little has changed since the IMF’s famous 2002 report on the “The Truth about Industrial Country Tariffs.”

Developing countries that export primarily agricultural and labour-intensive goods such as textiles and clothing are still hard hit by large industrial countries’ tariff policies.

This remains particularly the case with Bangladesh RMG exports to the United States, where the IMF study showed in 2001, the US collected duties of $331 million in 2001 on total imports from Bangladesh then worth $2.5bn, which was slightly more than the $330m it collected on $30bn of imports from France.

With Bangladesh now an even bigger RMG supplier to the US market, the picture is somewhat worse with well over $800m now paid each year in tariffs to the US government on imported Bangladeshi garments.

The tariff rate charged on Bangladeshi RMG exports to the US (15.6%), the second highest in this category, is especially discriminatory, as it is higher than nearly all other developing countries and roughly five times that charged on RMG exports from China and India.

It compares unfavourably with the EU’s “everything but arms” duty and quota-free scheme.

As it is stated, US policy to officially encourage efforts to raise labour standards in Bangladesh, if the US does not wish to remove its tariff, it should adopt the proposal made by the former chief economist of the Bangladesh Bank and establish a “tariffs for standards” fund.

By putting a portion of the excess rate paid by Bangladesh, say $200m, into a fund administered by a third party to finance factory upgrades and improvements in working standards, the US could help level the playing field for Bangladeshi exporters by directly supporting increased investment in improving Bangladesh’s RMG sector.

5. Climbing the value chain beats a race to the bottom

It is in the common interest of buyers and factory owners and workers alike for Bangladesh’s garment industry to improve its standards, as consumers and buyers will also gain from higher standards through improvements in productivity.

For the Bangladesh garment sector to achieve its goal of doubling exports to $50bn by 2021, a comprehensive approach needs to be taken to maximise investment in building new factories where productively and standards can both be improved.

This is particularly crucial for the Bangladesh RMG sector, which needs to both adapt to new competition and invest in improving workforce skills so the industry can keep rising up the value chain.

– See more at: http://www.dhakatribune.com/opinion/op-ed/2016/04/24/2257/