who made my clothes?
In 2013, Rana Plaza, a garment factory in Dhaka, Bangladesh collapsed and caught fire, killing roughly 1,021 people, and injuring 2,500 more.[1] This colossal failure of adherence to labor safety regulations, and complicit neglect of corporations sourcing their garments from Rana Plaza, prompted anger and outrage worldwide. This was yet another nail in the coffin for the ready-to-wear apparel industry, which was still facing the backlash from child labor concerns.
The Rana Plaza tragedy spurred several governments, corporations, civil-society organizations, and NGOs to come together to lobby the Bangladeshi government to do better for the workers of one of its most profitable export-oriented industries. Fashion Revolution, a non-profit based in the UK, has since demanded that in honor of the victims of Rana Plaza, April be deemed as “Fashion Revolution Month,” calling on consumers to demand greater accountability in the fashion supply chain.
Bangladesh is one of the poorest countries in Asia, and one of the most densely populated. As per a World Bank report, Bangladesh identified export manufacturing as a lucrative economic structural adjustment and geared forces to promote it worldwide. In 1981, ready-made garments made up only 1% of the country’s total exports, but textiles accounted for 93% of the total exports. With wage rates increasing substantially, fashion retailers like H&M and Primark began shifting their operations overseas to avoid high overheads. At a mere $0.22 per hour rate, Bangladesh had one of the lowest wage rates out of most low-income countries and was beginning to look more attractive to apparel companies worldwide.[2] [3] As per an ILO report on “Wages and Working Hours in the Textiles, Clothing, Leather and Footwear Industries,” Bangladesh provides 5% of the total clothing exports worldwide. While it may seem like a small chunk, since the scale of the industry is so massive, this amounts to 79% of Bangladesh’s local economy.[4] [5]
A shift to quicker fashion-seasons in the industry (as compared with the traditional two season year) has led to an insatiable global demand stemming from fast-fashion retailers[6]. Bangladesh’s low margins, disregard for labour laws and unions, and large population of low-skilled workers made it ripe for such a sector. The Rana Plaza tragedy shed light on the dismal physical working conditions and lack of wages for the plethora of garment workers at the bottom of the supply chain, a reality that the apparel industry could no longer ignore, and hide - behind their latest asymmetrical hemline. Globally, it is estimated that 36 million people are living in forms of modern slavery, as workers in the supply chains of Western brands[7].
There are multiple stakeholders and actors in the labor rights issue in Bangladesh. The “legal kaleidoscope” includes a combination of public and private actors, all operating at different levels and across borders. The struggle for these labor rights come under the umbrella of national labor laws, ILO conventions, corporate codes of conduct, and social clauses in bilateral and regional trade agreements. In addition to the hard legal frameworks, there are soft laws by private actors and NGOs.[8] Such a heterogeneous and complex framework of laws creates plenty of loopholes and gaps for actors to exploit.
The paper seeks to highlight and assess the steps taken by the Bangladeshi government, in light of the Rana Plaza tragedy, to protect its apparel industry workers, since the onus of protecting its people lies with a national government irrespective of the pressures of international markets or multi-national fashion corporations. However, I propose that the extensive international and domestic treaties, accords, and action plans have no value unless Bangladesh displays political will by strengthening regulation and enforcement mechanisms for these reforms and corporate pledges. The workers of the apparel industry cannot hope to see any real improvements in their working conditions until and unless the Bangladeshi government decides to support them.
BEYOND THE MULTI-FIBER AGREEMENT
General trends such as multiple developing countries’ accession to the World Trade Organization (WTO) and the liberalization of capital and commodity flows helped integrate several developing countries from Asia into the global marketplace. Until 2005, the textiles and clothing industry was exempt from the rules of the WTO’s General Agreement on Tariffs and Trade. After the Uruguay Round in 1995, the first negotiation which put the economic interests of developing countries’ most profitable sectors at the forefront, it was decided that the quotas for trade under the Multi-Fiber Agreement (MFA) would be phased out over a period of the next ten years[9]. Several negotiating groups were established at this round, with “Textiles and Clothing” forming one of the key negotiating groups.
The MFA which had been in place since 1974, offered protection to markets of poor countries but its eventual phase out enabled poorer countries to launch export-oriented textile and apparel industries, forming a large percentage of their exports and employment. Countries like India and China who initially took advantage of this situation have always had a traditionally rich textile heritage, and skilled artisans and handicrafts to exploit for such a market. While Bangladesh entered later, countries aimed to be more cost-competitive than the other, cutting corners where possible.[10]
Several ILO reports from the 1990s predicted positive economic growth as a result of this MFA phase-out, albeit conscious of the fall out of such agreements as well. However, probably none of these reports could have predicted the spillover effects of such trade agreements on the labour rights and protection regulations on the ground. Bangladesh forms one of the most agonizing case studies this regard.
ILO’s 1998 Declaration on Fundamental Principles and Rights at Work, established a set of basic labor market norms applicable to countries irrespective of economic development status. These form the basis of labor rights guaranteed to all, such as freedom from forced labor, non-discrimination, abolition of child labor and freedom to associate and bargain collectively (such as unions). However, as these are norms, countries cannot be coerced directly by the ILO. The ILO can use other mechanisms to force countries to voluntarily comply, such as moral suasion and public embarrassment. Bangladesh had ratified six of the eight ILO conventions since its independence, and the threat of US sanctions since the 1990s pushed the country to open up the apparel industry within its borders to external monitoring.
Collective bargaining remained one of the key points of contention for the government, as they didn’t allow unions to flourish as similar industries in other developing nations had began to. However, the pressure of the market forces is too strong in the apparel industry, and thus real change for workers has been too little and far in between.
SUB-CONTRACTING, THE DEVIL IN THE DETAILS:
A global system of “indirect sourcing” is essentially what has allowed corporations to turn a blind eye to the reality of where their products are made. NYU Stern’s comprehensive report titled, “Business as Usual is Not an Option: Supply Chains and Sourcing after Rana Plaza,” defines the harsh reality of the phenomenon that is indirect sourcing as “the routine practice of subcontracting, often through purchasing agents and in a manner that is not transparent to buyers or regulators… an essential feature of the garment sector in Bangladesh as a means to increase margins and boost production capacity while keeping costs low.” [11]
In short, the practice of hiring export houses overseas, who further outsource the production to what are called “sub-contractors” allows fashion retailers and apparel companies to turn a blind eye to the sub-par labor environments these sub-contractors provide. As the process goes further and further away from the purview of the client, the margins become smaller and smaller, leading to minimal oversight, lower wages, and terrible working conditions. The farthest factories from this process, which form the ultimate end of the chain (such as the factories at Rana Plaza), will often house hundreds of workers on one floor, lacking sanitation facilities, and drinking water. These buildings are not constructed in line with standard fire and building safety guidelines. Sub-contracting forms the backbone of the global apparel industry. A single export house can be connected to several smaller factories, which are competing with each other, to hit the highest production quotas at the lowest prices, to ensure repeat orders, further financing, and export credits.[12]
NATIONAL ACTION PLAN (NAP)[13]
At the behest of a high-level ILO mission which was dispatched to Bangladesh following the disaster at Rana Plaza, the Bangladeshi government signed the National Tripartite Plan of Action on Fire Safety and Structural Integrity (NAP) in July, 2013. The plan includes a set of high-priority and urgent commitments for the government to meet; a comprehensive list of legislation and policy efforts, administration changes, and practical activities for all stakeholders involved in the ready-made garments sector (RMG). The mandate of the plan also includes monitoring of the progress in the implementation of the activities as highlighted, a review and update of the activities, and coordinating with all stakeholders in the industry to support the implementation of the plan. This plan is extremely comprehensive and involves over 19 different national agencies, plus the ILO.
Under the legislation and policy efforts, the activities included: a labor law reform package for the Parliament; adoption of a National Occupational Safety and Health Policy; review and adjustment of the relevant laws, rules, and regulations; and establishment of a task-force on Building and Fire Safety of the Cabinet Committee for the RMG sector.
Under the administration efforts, the activities included: recruitment of staff to fill vacant posts of Factory Inspectors, support staff, and the additional hiring of Labor Inspectors in the Department of Inspection for Factories and Establishments; improving the capacity of the Department of Inspection as priority; upgrade of the Department of Inspection for Factories and Establishments to a full Directorate, with an increased support staff of 800 inspectors (up from 200); implementation of projects to strengthen the capacity of the Directorate; review and adjustments of factory licensing and certification procedures (regarding fire, electrical, chemical, and environmental safety); a set-up of a new agency which would deal with all issues of safety licensing and certification and; the development of a unified fire safety check-list.
Under practical activities, the plan includes: Factory level fire safety needs assessment; the development and implementation of a factory fire safety improvement program; assessment of structural integrity of all active RMG factories; development of a transparent and accountable industry sub-contracting system; delivery of fire safety crash courses for mid-level factory management, supervisors, union leaders, factory inspectors; development and delivery of mass worker education tools; establishment of a fire safety hotline; development of guidelines for the establishment of labor-management committees on occupational safety and health and/or fire safety; and development of self-assessment and remediation tools on fire safety; development of a protocol for compensation of families of workers who are injured or lose their lives; establishment of a publicly accessible database on safety issues in RMG factories; and redeployment of RMG workers that were rendered unemployed as well as rehabilitated disabled workers.
REFORMS IN THE LABOUR LAW POST RANA PLAZA
As per the National Action Plan, the Bangladeshi Parliament heeded their recommendation and recognized the need to make significant changes to its’ labor laws to protect the workers. Thus, in 2013, they passed reforms to change nearly 87 sections of the labor law as it currently stands. However, the reforms were criticized by the ILO, several NGOs, and the US government for not being enough. ILO issued a statement disapproving the government’s reforms of the law. Some of the key issues they highlighted were:
1. Freedom of Association & Collective Bargaining:
Reforms in the law eliminated the previous obligations on parts of the employees to send the names of their union leaders, thus also allowing them to consult outside experts during collective bargaining. Another key issue which was not addressed was the 30 per cent minimum membership for the formation of a union. The collective bargaining laws also do not apply to all workers of the industry; workers from the export-processing zones and the private sector are still not allowed to exercise certain freedoms of association and bargaining[14].
The law specifically prevents workers from freely forming unions to advocate for their rights. The reforms did not make the union registration process more feasible, and trade unions are required to seek government approval before affiliating with international organizations, NGOs or receiving foreign funding. Provisions related to financial severance were made even more restrictive under the new changes to the law.[15]
2. Workplace Safety and Health:
This has emerged as perhaps the most important aspect of the labor regulations in the aftermath of Rana Plaza. Severe neglect for fire safety codes and building regulations led to dismal working conditions in the factory, which eventually caught fire, killing more than a 1000 people. Reforms in this aspect have been fairly satisfactory including the mandatory setting up of safety committees in factories with more than 50 workers, the instituting of a labor inspector to conduct routine safety checks and inspections, establishment of workplace health centers, and the hiring of safety welfare officers. Reforms in this aspect also provide for compensation for work-related deaths, and treatment of occupational hazards[16].
The government also plans to build a specialized 535-acre industrial zone for factories of the RMG sector. The zone will have new factories, which are in line with all safety codes.
ACCORD ON FIRE AND BUILDING SAFETY [17]
Another development after the tragedy was the setting up of the Accord, an independent, legally binding agreement between brands and trade unions to promote a safer RMG industry in Bangladesh. It is a five-year agreement, and was incorporated in the Netherlands. It consists of the following main components: a legally binding agreement; an independent inspection program supported by the brands which source their product from Bangladesh; public disclosure of all factories, inspection reports, and corrective action plans; commitment by signatory brands to ensure budgetary allocations for remediation in their sourcing relationships; democratically elected health and safety committees in all factories for identification of health and safety risks; and worker empowerment through training programs, complaints mechanisms and right to refuse unsafe work.
The Accord has been signed by over 200 different apparel brands, retailers and importers (including some large well-known companies like Esprit, Hugo Boss, Primark, Abercrombie, Inditex and others) from Europe, North America, Asia and Australia, two global trade unions, and eight Bangladesh trade unions. The board of the organization includes a neutral ILO chair, and senior executive staff from H&M, Inditex, and trade union representatives from IndustriALL, Uni Gobal Union to name a few.
The Accord was built to complement the National Action Plan as described above, and aims to bring commercial stakeholders in the process to align their activities with the best interests of the workers of the RMG sector. The combination of stakeholders from across organizations like apparel companies, multilateral organizations, international trade unions, and national government organizations is a welcome attempt to bring the industry on the same page. As per the Accord, the signatories were to develop an implementation plan within 45 days of signing on, and state their intention to implement the activities[18].
ALLIANCE FOR BANGLADESH WORKER SAFETY
Organized through discussions chaired by former US Senate Majority Leader, George Mitchell (D-ME) and former U.S. Senator Olympia Snowe (R-ME), the Alliance is a legally binding five-year commitment to safety for workers of the RMG factories in Bangladesh. Involving apparel companies, both the US & Bangladeshi government, NGOs, civil society, and organized labor, the Alliance seek to bring together all stakeholders of the RMG process. The Alliance members, which includes some of the biggest retailers like Target, Nordstrom, JC Penny and Gap, form the majority of the American importers of RMG from Bangladesh.
Through a focus on standards, inspections, remediation, worker empowerment, training, and sustainability, the members commit to a number of activities. These include: the implementation of the National Tripartite Plan of Action on Fire Safety for the Ready-Made Garment Sector in Bangladesh (NAP); empowering workers to take an active role in their own safety, and to be able to speak out about unsafe conditions without any risk of retaliation; working with factories that ensure safe working spaces, with each Member committing not to source from any factory that the member has deemed to be unsafe; providing safety inspection, and safety and empowerment training for 100% of factories in the members respective supply chains; sharing information on fire and building safety inspections and remediation actions; and ending unauthorized subcontracting within their supply chains, amongst others.[19]
Through an internal process for determining the standards within one of their sub-contractor’s factories, the Alliance has suspended over 146 factories across Bangladesh from their relationships, deeming them as non-compliant to Alliance standards. To renew their work relationships with the Members, these factories have to undergo a new inspection at their own cost, meeting all the different requirements set by them. This effort to shame factories which are now listed publicly as not meeting the basic requirements, is a step in the right direction.
LACK OF POLITICAL WILL AND ENFORCEMENT
In the wake of tragedy, even the most inefficient and callous of governments has no option but to respond with emphatic solutions and dedication to the cause. In this case, Bangladesh did respond too – with comprehensive national action plans, and ILO missions. But it begs the question – will any of this matter, and change the reality on the ground?
Bangladesh has consistently ranked low on governance, corruption, and rule of law indicators. Conventional economic development literature suggests that the role of central government structures is key in accelerating developing for nations (as evident in the cases of Singapore, Taiwan, and Malaysia). The three characteristics shared by these countries included: state institutions spurred capital investments for industries; bureaucratic elites picked a select group of winning industries; and lastly, the elites of these societies maintained a strong hold over the industries. However, the growth of Bangladesh’s RMG sector doesn’t share most of these characteristics, except perhaps the nature of the industry’s relationship with the elites.
As per the Senate’s report on the Rana Plaza tragedy[20], most Members of Parliament had ties with factory owners, if they weren’t owners themselves. The same elite members of society also own significant media outlets and exert political influence in many matters. The RMG sector in Bangladesh is hardly a level playing field, and mostly was a way for the elites to cash in on a worldwide trend of cheap production, and a lack of legal frameworks to enforce terrible working conditions for their workers enabled them to improve their own economic status.
As per the same report, the implementation of the National Tripartite Plan of Action on Fire Safety and Structural Integrity, remains slow and inefficient. For example, one of the activities highlighted in the plan included the upgrade of the Labor Inspection Department, and the hiring of an additional 800 inspectors. However, during the review of the plan after some time, it was found that only 56 new inspectors had been hired.
In the “The Paradox of Export Growth in Areas of Weak Governance: The Case of the Ready Made Garment Sector in Bangladesh,” authors Ahmed et al argue that Bangladesh’s RMG export sector growth took place in spite of the government. In fact, the lack of regulatory oversight, created conditions ripe for sub-contractors to offer the lowest overheads of all the developing nations of Asia. However, they also highlight that the international apparel industry views Bangladesh’s workers favorably, and is invested and committed to improving its practices.
In fact, a McKinsey report[21] studied chief purchasing officers from top retailers worldwide, and 89% of them ranked Bangladesh as their top sourcing destination. They also ranked Bangladesh’s RMG sector higher than its competitors like Cambodia, India, Indonesia, Pakistan and Vietnam. Additionally, China’s shift from low-value manufacturing into high-value goods manufacturing will only expand opportunities for countries like Bangladesh to take forward. This report came out right before the Plaza tragedy, and perhaps if these chief purchasing officers were interviewed after, they would be less than supportive of Bangladesh’s inhuman cost-competitive labor wages of $0.22 an hour.
A Human Rights Watch report written two years after the Rana Plaza tragedy, “‘Whoever Raises Their Head, Suffers the Most’: Workers’ Rights in Bangladesh’s Garment Factories,” has documented continuing labor rights violations in garment factories in Bangladesh. Some of their key recommendations also revolve around the same aspects of labor law highlighted previously: such as amendments to the law so that it is in line with ILO’s conventions ratified by Bangladesh, i.e. Convention No. 87 on freedom of association and Convention No. 98 on the right to organize and bargain collectively.
ROLE OF CIVIL SOCIETY IN THE MOVEMENT
The larger transnational movement of activists and mobilization for the anti-sweatshop movement has pushed corporations to renew their moral agency. This push to restructure the global apparel industry, their supply chain networks, and their practices, has also led to massive consumer awareness.
Human Rights Watch has emerged as an important voice in this debate, with their advocacy team following up on the status of the RMG workers consistently. After the publishing of their report, they were able to bring the plight of these workers to the light of the European Parliament. Lola Sanchez Caldentey, a member of the European Parliament, spearheaded a report on the EU flagship initiative on the garment sector, and in April of this year, the Parliament voted to accept the report and its subsequent recommendations, thus beginning a process of drafting legislation to include transparency and accountability for European corporations.[22]
Another conglomerate of NGOs and industry professionals has emerged in Fashion Revolution, which has sought to educate consumers in the Western countries, consuming these garments, on the lack of transparency in the supply chain. Their annual Fashion Transparency Index[23] ranks well-known apparel companies on their policies, commitment, tracking, traceability, audits, remediation, engagement and collaboration. Companies are then awarded ratings of low, low-middle, and high. Fashion leaders like Chanel, Hermes, Forever 21, and Prada feature on their lowest ratings. Nike, Gap, Primark and Adidas feature on their high ratings. The highest scoring company was Levi Strauss & Co. at a 77% for its commitments to the previously identified pillars.
The report provides positive examples of some apparel companies, that other companies should follow. For example, Inditex has 10 supplier clusters it publishes openly, which are under constant review and work with trade unions, NGOs, and civil society. Adidas also openly publishes its list of sub-contractors on its website. H&M has also traced upwards of 99% of its production process, and has made its list of sub-contractors publicly available.
JUSTICE, SLOWLY
Four years after the Plaza tragedy caught fire and collapsed, a Bangladeshi court finally charged the Plaza owner Sohel Rana, and 38 other people, with murder.[24] 130 witnesses testified against Rana, and the others accused. Companies like Mango which were indirect clients of Rana Plaza factories have been silent on what they have done for the victims’ families. So where is the justice for the RMG workers here? The system is clearly in need of an overhaul - from suppliers to consumers. The government has a beautifully comprehensive and decisive action plan in the NAP, and has the support of international apparel brands through the Accords and the Alliance. International organizations and rights organizations are present as watchdogs. All the parts seem to be in place. But unfortunately none of these other actors can do what the domestic government can. Unless Bangladesh commits to seriously protecting the workers of the sector by following through with its NAP, for the RMG sector which has single-handedly lifted the country into lower Middle Income country status, another Rana Plaza is just around the corner.
[This was originally a research paper first submitted as coursework to Professor James Fry at The Fletcher School of Law and Diplomacy in 2017 and reflects the individual intellectual property of Vasundhara Jolly.]
SOURCES:
[1] BBC Asia. (2013). “Bangladesh factory collapse toll passes 1,000.” BBC. http://www.bbc.com/news/world-asia-22476774
[2] Rodgers, G. B. Y. V. D. M. (2010). "Options for Enforcing Labour Standards: Lessons from Bangladesh and Cambodia." Journal of International Development 22.
[3] For a full list of wage rates in developing countries supplying to the apparel industry, please see Table 1 in the Appendix.
[4] ILO. (2014). Wages and Working Hours in the Textiles, Clothing, Leather and Footwear Industries. Geneva. Page 8.
[5] For a full list of Bangladesh’s sectors, please see Graph 1 in the Appendix.
[6] ILO. (2014). Wages and Working Hours in the Textiles, Clothing, Leather and Footwear Industries. Geneva. Page 2.
[7] Ditty, Sarah. 2015. “Its Time for a Fashion Revolution.” Fashion Revolution. http://fashionrevolution.org/resources/
[8] Rodriguez-Garavito, C. A. “Nike’s Law: The Anti-Sweatshop Movement, Transnational Corporations, and the Struggle Over International Labor Rights in the Americas.” Law and Globalization from Below: Towards a Cosmopolitan Legality. Cambridge University Press.
[9] Hewitt, S. P. M. D. A. (1991). The GATT Uruguay Round: Effects on Developing Countries, Overseas Development Institute.
[10] Rodgers, G. B. Y. V. D. M. (2010). "Options for Enforcing Labour Standards: Lessons from Bangladesh and Cambodia." Journal of International Development 22.
[11] Labowitz, Sarah & Baumann, Dorothée, Pauly. 2014. “Business as Usual is Not an Option Supply Chains and Sourcing after Rana Plaza.” NYU Stern Center for Business and Human Rights. http://www.stern.nyu.edu/sites/default/files/assets/documents/con_047408.pdf
[12] Ibid.
[13]Ministry of Labour and Employment, Government of People’s Republic of Bangladesh (2013). “National Tripartite Plan of Action on Fire Safety and Structural Integrity in the Ready-Made Garment Sector in Bangladesh.” http://www.ilo.org/dhaka/Informationresources/WCMS_221543/lang--en/index.htm
[14] ILO (2013). “ILO statement on reform of Bangladesh labour law.” http://www.ilo.org/global/about-the-ilo/newsroom/statements-and-speeches/WCMS_218067/lang--en/index.htm
[15] 2013. “Worker Safety and Labor Rights In Bangladesh’s Garment Sector.” U. S. Senate Committee On Foreign Relations. Washington, D.C.
[16] ILO (2013). “ILO statement on reform of Bangladesh labour law.” http://www.ilo.org/global/about-the-ilo/newsroom/statements-and-speeches/WCMS_218067/lang--en/index.htm
[17] 2013. “Bangladesh Accord on Fire and Building Safety in Bangladesh." http://bangladeshaccord.org
[18] 2013. “Accord on Fire and Building Safety in Bangladesh.” http://bangladeshaccord.org/wp-content/uploads/2013/10/the_accord.pdf
[19] Alliance for Bangladesh Worker Safety. Members Agreement. http://www.bangladeshworkersafety.org/files/Alliance-Member-Agreement-FINAL.pdf
[20] U. S. Senate Committee On Foreign Relations (2013). “Worker Safety and Labor Rights in Bangladesh’s Garment Sector.” Washington, D.C.
[21] McKinsey and Company. (2012). “Bangladesh’s ready made garments landscape: The challenge of growth.” https://www.mckinsey.de/files/2011_McKinsey_Bangladesh.pdf
[22] Kashyap, Aruna. 2017. “Hope for Garment Workers with European Parliament’s Vote.” Human Rights Watch. https://www.hrw.org/news/2017/04/27/hope-garment-workers-european-parliaments-vote
[23] Fashion Revolution & Ethical Consumer. 2016. “Fashion Transparency Index.” http://fashionrevolution.org/resources/
[24] The Guardian (2016). “Rana Plaza collapse: 38 charged with murder over garment factory disaster.” https://www.theguardian.com/world/2016/jul/18/rana-plaza-collapse-murder-charges-garment-factory