The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
DHAKA, Bangladesh — Six years ago, the factory collapse at Rana Plaza killed more than 1,000 people, violently thrusting the issue of working conditions in Bangladesh's garment industry onto the global stage.
Now, the industry’s flagship initiative to improve worker safety is in imminent danger of losing its footing in the country, even as thousands of garment workers face unemployment and legal action for protesting low wages.
The situation highlights the ongoing tension between the western world’s demand for cheap goods and the increasing call for more ethical and sustainable manufacturing processes.
Each year, some $30 billion worth of clothing leaves Bangladesh bound for stores like H&M and Zara. These brands and many others have actively supported initiatives to improve worker rights and safety. But Bangladesh remains an important manufacturing hub. If conditions deteriorate there, there aren't many alternatives that can match the country's output in volume or price.
“Since Rana Plaza, sourcing from Bangladesh has only continued to grow,” said Liana Foxvog, director of campaigns at the International Labour Rights Forum. “The government may think that, given brands keep sourcing from here, it seems they don’t really care about workers’ rights despite what they say publicly.”
In the aftermath of the Rana Plaza disaster, North American and European retailers faced unprecedented pressure from consumers and activists to address the often miserable conditions of the workers who make their clothes. More than 200 brands joined with trade unions to form two organisations that created legally-binding commitments to ensure worker safety.
Those initiatives, known as the Accord on Fire and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety, succeeded in fixing around 90 percent of the problems they originally found at the factories they cover.
But they were also intended to be temporary. The Alliance wound down its operations last year, handing over its responsibilities to local partners. But the Accord was extended to 2021. More than 190 largely European brands signed on to the extension, but it’s faced mounting opposition from Bangladesh’s government and factory owners.
The situation highlights the ongoing tension between the western world's demand for cheap goods and the increasing call for more ethical and sustainable manufacturing processes.
Last May, a high court ruled it could remain in the country for just six more months. The safety watchdog appealed the ruling and the case has dragged on. On Monday, a division of the country's supreme court granted the Accord another reprieve, adjourning the case to April 7. But the uncertainty over the organisation's future has raised concerns the safety gains made in recent years could be rolled back.
“What has been achieved has been slow, but game-changing progress,” said Aruna Kashyap, senior counsel in the women’s rights division at Human Rights Watch. “The government is on the precipice of undoing it all because of this political opposition to the Accord.”
The Accord’s faltering prospects in Bangladesh underscore the tensions and conflicts that can often undermine efforts to improve conditions in fashion’s global supply chain. As years have passed without another major incident, the plight of Bangladeshi garment workers has faded from Western consumers’ consciousness.
Meanwhile, demand for cheap and fast fashion from Bangladesh has only continued to grow.
Between 2010 and 2017, the country’s share of global clothing exports increased from 4.2 percent to 6.5 percent, according to the World Trade Organisation. At the same time, between 2011 and 2016 profit margins at supplier factories in Bangladesh fell by around 13 percent, according to a report published by Pennsylvania State University’s Centre for Global Workers’ Rights last year.
That’s contributed to a decrease in real wages and increase in workers’ rights violations since the Rana Plaza disaster, the report found, with the exception of safety improvements thanks to the Accord.
“The bigger picture that concerns me tremendously is how do you significantly raise the minimum wage if overall we’re seeing this squeeze down on price?” the report's author and centre director Mark Anner said. “That’s where brand and retailer responsibility comes into play.”
As years have passed without another major incident, the plight of Bangladeshi garment workers has faded from Western consumers' consciousness.
Thousands of workers have been fired in recent months after protesting changes to the country’s minimum wage. Many are also facing legal action brought by factory owners, according to union representatives. Companies operating in the country said they were working with unions to investigate and resolve the recent issues.
The threat to the Accord and the issues around wages are "like two parallel battles we are fighting at the same time," said Kalpona Akter, founder and executive director of the Bangladesh Centre for Worker Solidarity, a labour rights organisation.
Government representatives did not respond to requests for comment. Bangladesh has called for its own watchdog unit, the Remediation Coordination Cell, to take over from the Accord, moving safety regulation back into the hands of the government.
“It’s a sovereign country,” said Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association or BGMEA, which represents factory owners. “I can give you a guarantee that the RCC is ready now to take over everything.”
While safety standards have improved significantly since 2013, the Accord says its work is not yet finished. For instance, only 49 percent of Accord factories that had inadequate fire systems during initial inspections have installed compliant fire detection and prevention systems. According to the International Labour Rights Forum, roughly 40 people have died as a result of fires and related incidents in Bangladesh’s garment factories since 2013.
Negotiations that would allow a gradual transition of the Accord's responsibilities over to the government have so far failed to result in an agreement. With the Accord in a precarious position, member brands face difficult questions over what to do if it is forced out.
“The brands have made it clear on numerous occasions that the premature closure of the Accord in Bangladesh would cause them to reconsider sourcing positions and jeopardise the reputation of Bangladesh as a safe country to source from,” the Accord’s deputy director Joris Oldenziel said. “They have made that warning quite clear.”
Behind the scenes, companies have been pushing for a solution and scrambling to put measures in place to protect their businesses. Few would comment directly on what they might do if the Accord were pushed out, but even if it leaves, they will remain bound by their commitments as signatories. In a worst-case scenario, the Accord will continue to operate out of its Amsterdam office, using third-party contractors to conduct inspections. But that would increase costs and reduce efficacy.
“We are continuing to monitor the situation closely,” H&M said in a statement. “Our position is that the timeline must allow for a smooth and progressive transition of the Accord to a national regulatory body, and that the transition process must include a thorough knowledge transfer.”
Given the current situation in Bangladesh, it's highly unlikely the government is really committed and has the will or capacity to regulate.
While there’s broad agreement the government should eventually take on responsibility for monitoring safety standards, industry watchers say the RCC doesn’t have the qualified staff or infrastructure in place to take over. The crackdown on workers protesting changes to the minimum wage has also raised questions about its commitment to protecting workers rights.
“Given the current situation in Bangladesh, with mass arrests and the dismissal of garment workers on strike, it’s highly unlikely the government is really committed and has the will or capacity to regulate,” said Dominique Muller, policy director at campaign group Labour Behind the Label.
Serious labour issues like the ones in Bangladesh are becoming an increasing liability as companies face mounting pressure from consumers, investors and governments to show they are maintaining ethical standards across their supply chains.
This month, UK lawmakers are expected to release recommendations for policy changes that will push the industry to operate more sustainably, following a months-long parliamentary investigation. The committee running the inquiry has already criticised the sector’s current “exploitative” business model in an interim report published in January.
If the Accord is forced out, it could prove a true test for brands' commitment to action.
Many brands say they are trying to act more responsibly, signing up to industry initiatives that support workers’ rights. But in the wake of the recent crackdown in Bangladesh, some feel they have not been proactive enough in protecting the people who make their clothes.
“Looking closely and auditing findings is not the solution, they need to intervene,” Akter said. “It’s an open secret, everyone can see what is happening here. They are reading this, and they are not doing anything.”
If the Accord is forced out, it could prove a true test for brands’ commitment to action. Over the last five years, its oversight has become a linchpin of many brands social license to operate in Bangladesh. If it can’t continue operations in the country, hundreds of factories that have been flagged for safety breaches could lose their right to do business with western brands within a matter of months.
“If the Accord is just thrown out from the country and this crackdown continues, I don’t think this will bring anything good for the industry,” Akter said. “For a sustainable industry, this should not happen.”
This article was updated on Monday, February 18.