Fears for Bangladesh Garment Workers as Safety Agreement Nears an End

The Rana Plaza collapse led to the agreement, which improved factory safety for workers. Despite a last-minute extension, its legacy may be in jeopardy.

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Since the Rana Plaza disaster in 2013, in which a Dhaka factory collapse killed more than 1,100 people, Bangladesh has gone from being the global poster child for garment worker tragedies to a reformation success story.

The Accord on Fire and Building Safety, signed in 2013 by European retailers like Inditex, H&M and Primark, labor unions and Bangladeshi factory owners, was a landmark, legally binding agreement for the global apparel industry. For the first time, almost 200 international brands agreed to independent inspections at the factories that produced their products and to collectively contribute funding for safety training and some factory improvements. Any companies that violated the terms could be fined or expelled from the group. A second, less-constraining agreement — the Alliance for Bangladesh Worker Safety — signed by American companies like Walmart, Gap and Target, was also rolled out the same year.

But with the accord set to expire, the hard-won safety gains set in motion by the agreements could be at risk. Brands, unions and local manufacturers have been squabbling in negotiations for a replacement deal. All want a say in how to police the $34 billion in apparel exported annually by Bangladesh.

On May 21, 10 days before the original expiration date, the unions publicly walked away.

And despite a last-minute agreement on Friday by the brands and unions involved to extend the negotiations by three months — along with the current accord commitments — the future of garment factory safety monitoring remains in flux at a critical time for both Bangladesh and the global fashion industry.

Fashion retailers rarely own the factories that supply them. The vast majority of garment and footwear orders are outsourced to suppliers in emerging markets like Bangladesh, where overhead is cheap and the cost of human labor even cheaper.

According to the International Labor Organization, more than 4.5 million people work in 4,500 garment export facilities in Bangladesh, the world’s second-largest garment exporter after China. As a result of the accord, over the last five years more than 120,000 fire, building and electrical hazards were fixed in the country, and nearly 200 factories with two million workers lost their contracts because of poor safety standards after more than 38,000 inspections.

“The accord was a trailblazer for global worker safety and auditing, which made genuine on-the-ground improvements in Bangladesh,” said Michael Posner, a professor of ethics and finance at the Stern School of Business at New York University. “Reacting to public outrage, both it and the alliance set a precedent that forced rival Western companies to work together, improve supply chain transparency and take greater responsibility for a system in which they have long reaped the bulk of profits.”

But both the accord and alliance, the latter of which was disbanded in 2018, were driven by international groups. And while the accord was given a three-year extension, the long-term intention was always to hand oversight of the training, inspection and remediation functions of the agreement to a single Bangladesh-based body.

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Rescue workers after the collapse of the Rana Plaza garment factory complex in 2013. More than 1,100 people were killed.Credit…Kevin Frayer/Associated Press

The last 12 months have been a transition period between the newly formed Ready Made Garments Sustainability Council, overseen by the Bangladesh Garment Manufacturers and Exporters Association, and the expiring accord. The board of the new sustainability council has 18 seats equally split between labor rights groups, international brand representatives and factory owners, who make up much of the political establishment of the country.

“We have transitioned from the regime of foreigners coming and prescribing what Bangladeshis have to do to one which is more collaborative and national,” Miran Ali, vice president of the association, told Reuters last month.

Unlike its predecessor, the new garment council has no legal authority. And after delays in negotiations caused by the pandemic, concerns — particularly from union leaders and nonprofit organizations like Clean Clothes Campaign — have grown about whether the council’s terms are robust enough to force brands and factory owners to push through the costly changes needed to protect their employees.

In recent months, Christy Hoffman, UNI Global Union’s general secretary, said last week, the brands insisted upon “a new framework for the future” that does not include key elements of the accord, such as individual brand accountability and monitoring by third-party auditors.

“As Rana Plaza showed, self-monitoring by brands doesn’t work,” she said. “The brands are using the cover of the pandemic to seize this moment and create a new agreement, which gives a smaller piece of power to unions. But that’s not a feasible model without us.”

According to Christina Hajagos-Clausen, textile and garment industry director of the global union IndustriALL, there is a specific agenda motivating some of the European brand leaders to push for the new agreement: a desire to include American brands like Walmart, which are more wary of assuming legal liabilities and are not part of the current negotiations (the alliance was never legally binding). Currently, the only American organization involved is PVH, owner of Tommy Hilfiger and Calvin Klein, even though American brands and retailers account for roughly a third of all garment exports from Bangladesh.

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Members of a labor rights organization in Dhaka, Bangladesh, last month, commemorating the anniversary of the Rana Plaza building collapse.Credit…Monirul Alam/EPA, via Shutterstock

“The Europeans are trying to entice the North American retailers toward contributing more to collective safety monitoring by watering down accountability,” Ms. Hajagos-Clausen said. “At one level, of course we want more brands to sign up — after all, the same factories produce for both American and European and other international brands. But all that’s happening here is a reduction in the credibility of the overall program, making it impossible to use the agreement as a possible blueprint for global coverage at a dangerous time for garment workers everywhere.”

Faruque Hassan, the president of the garment manufacturers association, did not respond to requests for comment. And while some Western brands like Asos have said publicly that they would support a legally binding agreement, most were not willing to comment while negotiations were going on. H&M, the Swedish retailer that was instrumental in the creation of the original accord, is also a leader of the current talks and remains “committed” according to Payal Jain, H&M’s head of sustainability global production.

Ms. Jain said H&M “strongly supported” a structure involving trade unions, employer organizations and the government, as well as clear accountability for brands, and increased fire and building safety capacity within the country.

“We are confident we can come to good solutions,” she added.

Bangladeshi factory workers, already dealing with pay cuts and late wages, will be counting on it. Garment exports, which account for 80 percent of Bangladesh’s annual export revenue, fell 17 percent in 2020. The country’s apparel sector was devastated as brands closed shops during the pandemic and canceled orders worth as much as $3.5 billion, leaving many factory owners facing ruin. The industry has seen a recovery, but the future remains uncertain — particularly with continuing lockdowns and virus outbreaks.

Owners of small and medium-size factories have long said they have been squeezed by the investments needed to meet safety standards. Now, their finances are suffering further as many global brands continue to drive order prices down in a tough trading environment. Brands have also asked the factories to undertake costly new Covid 19-related safety measures.

According to Mr. Posner, while improvements have unequivocally been made for worker safety in Bangladesh, the work is far from over. While the accord and alliance reached roughly 2,500 factories, it is well known by the industry that there are more than double that number of facilities, including subcontractors. A significant proportion of factories in Bangladesh remain unsafe.

“As the world starts to open up again and demand picks up further, no one in this equation can afford to take their eye off the ball,” Mr. Posner said. “The legacy of the accord is at stake.”

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