One year ago on the 24th of April 2013, the horrific Rana Plaza disaster in Bangladesh claimed at least 1,129 lives and galvanised industry and government into action.
Worldwide condemnation for lax safety standards saw the government pressured into undertaking proper structural assessments of all export-oriented garment factories, employing an additional 200 building inspectors, and moving to ensure occupational safety and health, freedom of association and the right to collective bargaining.
But have these developments ensured any real progress with respect to building safety and work environment including worker security, health and compensation?
A promising response
The immediate response following the disaster from key garment buyers and retailers was mixed – some, like Disney, withdrew from Bangladesh, while others followed a more cautious approach with a primary objective of improving the factory conditions including infrastructure, fire safety and working conditions.
Pressure from these key buyers led the Bangladeshi government to amend existing labour laws to allow the formation of trade unions without informing the factory owners, resulting in a dramatic increase in the number of new unions in the garment sector, which have more than doubled since the Rana Plaza incident.
The government also decided to increase minimum wages in the industry by 77% from US$38 a month to $68 a month. In addition, garment manufacturing factories in Bangladesh promised to invest US$1.3 billion to comply with fire and safety standards.
But the promise of appointing 200 qualified building and safety inspectors has not been finalised yet, and unions are still not allowed in factories within export processing zones. While the government is trying to relocate factories to other parts of the country, the concentration of factories around the already overcrowded capital city, Dhaka, remains a concern.
Another lingering issue is the failure to adequately compensate victims of the Rana Plaza disaster. Unfortunately, making and breaking promises to compensate victims of fires, building collapses and other industrial accidents are not uncommon in Bangladesh. The Rana Plaza collapse is no exception.
Some compensation, however, has already been paid by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), charitable organisations and the government. To date, the British retailer Primark has paid US$9 million to the fund while the others paid a total of only $8 million. According to the International Labor Organisation, this leaves a shortfall of another US$23 million.
Some of the retailers did not even make any initial payments and remain unwilling to create any precedence of paying compensation in full. The Bangladesh prime minister’s relief fund collected public donations worth more than US$17 million to support and rehabilitate Rana plaza victims. Sadly, less than US$3 million of this fund has been spent.
According to the BGMEA Director Sadek Ahmed, in Bangladesh, the post-disaster focus has shifted to building safety, workers’ security and workplace compliance to meet requirements set out by retailers in Europe and the US.
The two deals signed in the aftermath of the disaster – the “Alliance” with mostly US companies and the “Accord” with primarily EU firms – do not form part of a comprehensive, long-term solution to the problems of Bangladesh’s manufacturing industry. These two agreements together only cover approximately 2,300 factories, less than half of the total industry.
Facing rising production costs due to higher wages and the cost of compliance, major brands and retailers are reluctant to spend any extra money to pay the fair price for imported garments. In turn, this is putting undue pressure and stress on local garment manufacturers.
Despite some progress made since the Rana Plaza incident, several issues still remain unresolved. These include the lack of full implementation of newly-legislated labour laws, the absence of a comprehensive and credible building safety inspection processes for all factories including the ones that haven’t yet signed up for the Accord or Alliance, and the inadequate arrangements to compensate victims of industrial accidents.
It’s also important for retailers to ensure ethical practices conforming to the 2011 UN Guiding Principles on Business and Human Rights to protect peoples’ life and livelihood and respect their dignity. Accordingly, at the buyers’ end, the government, retailers and consumer groups should form a partnership to ensure the observance of these principles in factories located in source countries.
Currently, there is no direct involvement of governments of major retailing countries in making their own retailers and major brands adhere to ethically responsible global sourcing practices.
The global apparel market is worth US$1.7 trillion, and it’s growing quickly. Now is the time to streamline home-country and source-country regulations with the establishment of a global governing council for the garment industry with a permanent secretariat. It could become a platform to formulate, update and implement a set of global norms on building standards, working conditions, labour rights and minimum wages relevant to the industry. With all stakeholders involved, this kind of coordinated action will mean disasters like Rana Plaza won’t happen again.