Big apparel brands still need Bangladesh’s workers – The Economic Times

Clipped from: https://economictimes.indiatimes.com/small-biz/trade/exports/insights/big-apparel-brands-still-need-bangladeshs-workers/articleshow/82624993.cmsSynopsis

Bangladesh’s garment-export economy is something of a modern miracle. In 1978, the country was primarily agricultural; its garment industry amounted to nine factories and about $1 million in export revenue.

Bangladesh is deep into its second month of a coronavirus lockdown that has shuttered schools, public transportation and most workplaces. But thanks to lobbying by the country’s garment manufacturers, millions of factory workers are still on the job every day — even though many have complained of pay cuts, late wages and inadequate Covid protections.

Eight years after the notorious collapse of the Rana Plaza apparel manufacturing complex, which killed more than 1,100 people, Bangladesh’s garment industry was supposed to be doing better. Following the incident, global apparel brands entered into safety agreements with local factories that made real progress. The only problem is that one accord expired in 2018 and the other is expected to end on May 31.

That timing couldn’t be worse. With factories struggling to stay afloat because of falling apparel demand, and the government able to offer only limited support, garment workers are already shouldering significant economic uncertainty. Without help from the global brands and retailers that sell their handiwork, these workers could well lose the hard-earned health and safety improvements that the agreements guaranteed — and face the risk of another disaster.

Bangladesh’s garment-export economy is something of a modern miracle. In 1978, the country was primarily agricultural; its garment industry amounted to nine factories and about $1 million in export revenue. Over the next 30 years, a combination of savvy entrepreneurship, favorable trade agreements and cost-conscious foreign retailers proved transformative. By 2020, annual garment exports were worth $33.6 billion, the country was home to more than 4,000 factories and the industry employed some 4.4 million workers.

Underlying this success, however, were some ugly realities. At the time of the Rana Plaza collapse, the entry-level minimum wage was less than $40 a month, and workplaces were notoriously dangerous. In the eight years before the incident, more than 1,000 garment workers had been killed on the job. None of that seemed to make Bangladesh any less attractive to global apparel brands.

Rana Plaza — which supplied clothes for top European brands such as Benetton — changed everything. Consumers who had never questioned why their clothing prices declined steadily over the decades were forced to think twice. The apparel industry, fearing a consumer revolt, rushed to find a fix. What it settled on were two agreements that set the terms for inspecting, repairing and upgrading factories to reasonable safety standards.

The most successful was the Accord on Fire and Building Safety in Bangladesh, an agreement between unions and brands — although not factories — in which each side held equal seats in a governance body. It required that brands assess whether their suppliers’ factories meet health and safety standards, and make funds are available for any needed improvements (and for worker pay, if furloughs are required). Over its first five years, this arrangement produced more than 100,000 safety improvements in 1,500 factories.

As remarkable as that record was, though, the accord was only ever meant to be temporary. Exactly what should replace it has proved contentious. Hoping to create a sustainable system, both sides agreed last year to establish a new governance structure that included factory representatives, as well as a nonprofit to manage inspections and remediation.

But as the transition date approaches, unions and others are concerned that the factories might backslide without binding commitments from the brands. Even before the pandemic, a U.S. Senate committee investigation found that workers and their unions were subject to increasing levels of intimidation and abuse. Meanwhile, despite all the progress, hundreds of factories still lack basic measures like safe exits, smoke alarms and fire-suppression gear.

The pandemic has only made matters worse. Brands have asked the factories to undertake costly new Covid-related safety measures. Yet they did so even as they canceled or postponed some $40 billion in orders. Few if any have offered cash relief or other assistance to aid the process. Without a binding accord to ensure compliance — and, more pertinently, financial help from the brands — factories already squeezed by declining orders can’t be trusted to continue such expensive safety work.

So far, the brands have shown minimal interest in renewing the accord. But at a minimum they should be willing to sustain it until the Bangladeshi economy and the garment industry begin to recover from the pandemic. That temporary renewal could eventually be supplanted by a more comprehensive deal that not only requires brands to make sure their suppliers uphold health and safety standards but also includes factory representatives and the Bangladeshi regulators ultimately responsible for supervising them.

Rana Plaza was a lesson in what can happen when global brands don’t demand better. Nobody should be asked to learn it again.

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