Managing organized retail published Express Computers 1-15th June 2013

Tale of Misgovernance: Bangladesh Garment Factory

Tale of Misgovernance: Bangladesh Garment Factory 

Photo: Associated Press

The recent collapse of the garment manufacturing building in Bangladesh has caused the death of 1127 people and injured 2000 others. Scores of people have been maimed for life. Rubble removal work has taken a near full month. One woman survivor is pulled out on the seventeenth day.

Pope Francis has characterised the Bangladesh garment workers as slaves. Disney walked out of the country. It did not want its brand to be associated with such bad publicity. Human rights workers protested before UK high street retailer Himark’s offices in London and there were protests in many cities across the world.

Official garment worker minimum wage in Bangladesh is $37 per month. Overwhelming majority of people working in these factories are women. There are 4500 garment factories in the country with the majority of them located in Dhaka and some in the port city of Chittagong.

Bangladesh is the world’s most popular low cost garment manufacturers’ destination. While the monthly wage paid to garment worker in Bangladesh would rarely exceed $50, in Shenzhen China the wage is $335 and in Hanoi Vietnam it will be $100. Other outsourcing garment manufacturing locations in the world are Indonesia, Thailand, India and a few others.

The purchasing capacity in the new markets is much lower than in mature markets of North America and Europe. Rising demand from India and China is adding to the demand for low cost outsourcing manufacturing. Production time lines are becoming shorter and pressure to produce faster is increasing.

Today garment workers in Bangladesh work 14 hours a day, six days a week, live in dormitories several people to a room in sub human conditions and have practically no right to protest. Any sign of protest or dissent will lead to instant firing and replacement with another worker willing to work in the same conditions. Allegations of sexual abuse and harassment also abound.

While we can badger, criticise, protest and demand major garment retailers of the world to be more humane in their sourcing, take responsibility for the outsourcing contractors and insist on globally accepted norms for treatment of workers, the situation will get resolved only through collective action and pressure.

There are four major actors in this entire business, each of whom has a role to play:

1. Governments
2. Global retailers
3. Civil society groups
4. Customers

Governments:

A building collapse of the type that happened at Rana Plaza is primarily a result of apathy and mis-governance. This is not a one off tragedy but is one in a series of periodic disasters. Just a few days after this building collapse, a fire broke out at the Tung Hai Sweater Factory in Dhaka and another eight more people died.

It is not uncommon in South Asia and other developing countries that regular pay offs are made to enforcement machinery officials to look the other way at rampant violations of codes and laws. Tip offs by officials to builders and garment manufacturing operators, whenever inspections by outside agencies is planned, are common.

On the eve of an inspection, the premises are cleaned up, fire extinguishing equipment from outside is brought and placed at strategic locations and an impression of compliance is given to the inspection party. The nexus between business, corrupt politicians and officials is common knowledge in these parts.

Garment manufacturing brings in $18 billion of hard currency for a country whose GDP is around $118 billion. 49% of the population of Bangladesh is below the poverty line and earns less than $1.25 a day. A regular job that gives a person a chance to survive is a cause of envy in such communities. There is too much of stake socially, politically and economically for Bangladesh and pressure from the global community can force change.

Global Retailers:

While it is understandable that global retailers look to outsource manufacturing to the cheapest possible location; this does not mean that search for higher shareholder value and profit overrides human dignity and humane practices. Incidents like the one in Bangladesh have been occurring again and again. Each outrage is followed by assurances to improve compliance of contracts, global standards, tougher inspections and increased oversight. The regularity at which these incidents occur indicates a lack of will on the part of these players. Sustained pressure is necessary to force change.

Civil Society Groups:

They are the global watchdogs. Repeated campaigns and pressure against erring groups and governments is critical. In response to domestic and international pressure, the government has been forced to shut down eighteen errant garment manufacturing factories. The cabinet has approved changes to raise the minimum wage of garment workers and improve statutory compliance.

Clean clothes campaign launched with help of local and global unions, labour rights organisations has lead to some global retailers like PVH who own the Calvin Klein brand, Tommy Hilfiger and German retailer Tchibo to sign on an agreement for independent building inspections, pledging to enforce worker rights, training and public disclosure. Continued pressure will force others to sign such pledges.

Customers:

They are the ultimate arbitrators of any business. Customers can refuse to buy products manufactured in factories where basic human standards have not been complied with. Customer pressure has lead to substantial diminishment of use of child labour in factories in India. Wildlife protection groups inspire customers to boycott purchase of furs, shoes, garments made out of skins, bones and parts of wild animals.

The cost of non compliance can be made unacceptable for government, global retailers and outsourced manufacturers if the customer refuses to buy these products that are tainted by the blood of the impoverished. 

 

THE AUTHOR

Sudhir Ahluwalia moved out to the Corporate world after spending over two decades in the Indian Forest Service. He headed multiple consulting groups in Tata Consultancy Services and spent over a decade with them. He now operates as a business consultant and is advisor to multiple companies. He does a bit of freelance writing with focus on Information technology and nature: www.sudhirahluwalia.com.