In the two months since the collapse of the Rana Plaza in Bangladesh left 1129 people dead and hundreds more still unaccounted for, world attention has turned from the actual cause of the incident to scrutinising the entire industry.
So far there has been three notable international efforts aimed at improving working conditions, wages and building safety and importantly, acknowledging the responsibilities of multinational Big Brand retailers and buying house intermediaries making up the global ready-made-garment supply chain.
The Bangladesh government has this week amended its labour laws following pressure from the United States, which suspended its preferential market access following the Rana Plaza collapse.
But those who seek to reform the Bangladeshi ready-made garment industry face political and economic pressures that might stymy these early efforts.
International efforts
Just two weeks after the disaster, the International Labour Organisation-initiated tripartite agreement between workers, employers and the government that emphasised legislation to establish workers’ right to union, occupational health and safety, improving structural integrity of buildings and more frequent and effective building safety inspections.
However, controversially the agreement did not focus on the responsibilities of multinational Big Brand retailers and buying-house intermediaries making up the global ready-made garment supply chain.
At about the same time, a global campaign by a coalition of labour groups and NGOs sponsored and led to the creation of a global five-year Bangladesh Safety Accord between buyers and factory workers represented by trade unions. By mid-July, 77 (mostly European) companies including a number of American companies and four Australian retailers had signed up to the Accord.
However, 17 large North American brands and retailers (Group of 17) including Wal-Mart and Gap, refused to sign, opting instead to enter into a rival agreement that did not include a binding arbitration process enforceable in the signatory’s home jurisdiction.
One of the sticking points was the possibility of bearing an unlimited liability in case of another major incident like Rana Plaza, while a number of companies also questioned the Accord’s accountability measures.
This rival agreement does iterate the responsibility of both Bangladesh and the US governments as well as the factory owners, and calls for a more inclusive governance process and greater role of big brands and retailers - but falls short of articulating its legal enforcement and consequences of non-compliance.
The ILO and the European Union, together with the Government of Bangladesh, have agreed to sign a major Compact to reform Bangladeshi labour law and improve building and fire safety. After establishing a wage board to set minimum wages for garment workers, the Bangladesh government has now amended the labour law to allow workers the right to form a union.
But Human Rights Watch is urging the global community to continue to agitate Bangladesh to meet international standards allowing workers to bargain collectively and participate in workplace decisions on safety.
Political challenges
These are positive developments. But reforming the burgeoning Bangladesh ready-made garment industry offers some significant challenges.
According to the just-published export data, garment exports from Bangladesh grew by 12.7% during the last fiscal year to $21.52 billion, crossing the $20 billion mark for the first time. For the garment sector in Bangladesh, the uncertainty lies in whether Bangladesh will be able to sustain industry growth while tackling the social reforms required.
At this point, it is important to provide a snapshot of the internal political scenario in Bangladesh. The dismal political state of the country is characterised by ongoing and intensifying rivalries between two major political parties together with their irresponsible and hawkish acts either to stay in, or to grab, the state power. The ready-made garment sector has been just one sector affected.
The recent suspension of preferential access of Bangladeshi products to the US was a symbolic blow to the country’s political stand and economic as well as industrial policy. As the general election in the country is due in January 2014 or earlier, the political parties are at loggerheads, exacerbating the situation even further.
Given such predicaments, the government often vies for short-term, piecemeal and politically-charged solutions without considering their immediate side-effects and long-term implications. The government failed to come up with a clear strategy during and in the aftermath of the Rana Plaza incident.
Interestingly, it has welcomed all prescriptions including the Accord, Initiative and the Compact and committed to become a party to each of these efforts without even understanding their implications. However, it is not showing any sign of its own strength and agility in dealing with the issue.
As the Transparency International Bangladesh has identified political parties, police and judiciary as the three most corrupt sectors in Bangladesh, in one of the most corrupt countries in the world, it is difficult to ask for more from the government.
Regional competition and global support
International politics is another interesting facet of the problem. Businesses in North America and Europe will continue supporting the Bangladesh ready-made garment industry as long as they get their orders relatively cheaply, but India and Myanmar may well benefit from “the happenings in Bangladesh”.
As the cost of production in Bangladesh is likely to rise due to the recent moves prompted by immense pressure from unions and civil society groups locally and internationally, relocation of production facilities from Bangladesh to more politically stable and economically viable locations could only be a matter of time.
The way forward…
In line with the global demand, collaborative efforts need to be in place among the government, workers organisations and employer organisations such as Bangladesh Garments Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) in order to improve the overall industry environment.
For Big Brands and retailers, it is a matter of doing the right thing and creating the right image among their customer bases and across their global supply chain.
In addition, they should consider it as their moral obligations to run their supply networks in a transparent and accountable manner. Relocating to another location may not be a better strategy as the new destination could pose similar problems. It could rather be an opportunity for them to use the lesson from the current crisis to mend the problems already identified and continue flourishing using their business presence in Bangladesh.
Meanwhile, the global efforts need to continue. Together with the industry-specific stakeholders, governments of importing countries should also engage in the process in order to make global brands and retailers abiding by the basic corporate social responsibility in their countries of production.
No doubt, the ready-made garment sector in Bangladesh is at the crossroads. It is time now for all stakeholders to work together with one single aim – to campaign for, and to engender, positive changes across all levels of the supply chain.
A win-win situation could only be achieved if a consumer does not feel guilty of wearing a garment made in a sweat shop; if a worker gets appropriate wages, can raise her concerns freely and feels safe and comfortable in her working environment; if a factory-owner can run her business responsibly; if a retailer wins back its customers’ confidence and loyalty generating more profits; and if the government can provide a platform for all concerned to reach a solution based on equity and justice.