The date April 24, 2013 is not one that will be seared into the minds of the average person, but for the garment industry and the thousands of people affected by the events of that tragic day in Bangladesh, it’s one that will be hard to forget.
The Rana Plaza factory-building collapse that claimed at least 1,129 lives and injured more than 2,500 workers will undoubtedly stand out in history as one of those watershed moments, what scientists call a major paradigm shift where old ways of looking at things are no longer valid. The disaster's causes were many, and there is still plenty of blame to go around. But what is most painful is that it was all so avoidable. Yet critics say they have seen it all before and doubt if the industry will really change, even though major retailers responded swiftly with a series of major commitments and foreign governments continue to exert pressure.
A day that will live in infamy
The factory building that collapsed April 24 in Savor, an industrial suburb outside Dhaka, Bangladesh’s capital, was the deadliest disaster in the history of the garment industry. The building was constructed with substandard materials in blatant disregard for building codes, according to a high-level Bangladeshi government report issued May 22.
The 400-page report on the collapse of the Rana Plaza building found widespread fault for the disaster. It blamed the mayor for granting construction approvals and recommended charges against the building’s owner as well as the owners of the five garment factories housed in the building, which could result in life sentences if they are convicted. The factory owners had urged workers to return to their jobs despite evidence that the building was unsafe.
The Rana Plaza building collapse has focused global attention on unsafe conditions in the garment industry in Bangladesh, the world’s second-leading exporter of clothing, trailing only China. According to the Bangladesh Garment Manufacturers and Exporters Association, the country has more than 5,000 garment factories, handling orders for nearly all of the world’s top brands and retailers. Its economy rapidly grew into an export powerhouse largely by delivering lower costs, in part by having the lowest wages in the world for garment workers – $38 a month.
The Bangladesh Department of Commerce and Industry reports that the country ships around $15.6 billion of ready-made garments every year, equivalent to 80% of its total exports. 60% of Bangladesh’s garment exports go to Europe, 23% to the US, and 5% to Canada. The textile industry accounts for 17% of the country’s gross domestic product and employs roughly 4 million people. With a population of 160 million, 31% lives below the poverty line.
The government report said that Rana Plaza was a disaster waiting to happen. The owner had illegally constructed upper floors to house garment factories employing thousands of workers. Large power generators placed on the upper floors, needed because of regular power failures, would shake the poorly constructed building whenever they were switched on.
On April 23, cracks appeared in the building, shaking the structure enough that many workers fled. An engineer who had been called to inspect the structure warned that it was unsafe, but the owner and factory bosses dismissed concerns and ordered workers back into the building the next morning. A generator was switched on, causing the building to buckle and collapse. The government’s report recommended that the owner and factory owners be charged with culpable homicide and for bribing government officials for construction approvals.
Garment industry responds but remains divided
Within weeks of the building collapse, several of the world’s largest apparel companies – including the retailing giant H&M and Inditex, owner of the Zara chain –agreed to a far-reaching and legally binding plan, called the Bangladesh Fire and Building Safety Agreement. It requires retailers to help finance fire safety and building improvements in the factories they use in Bangladesh.
Consumer and labor groups hailed the move by H&M, the largest purchaser of garments from Bangladesh, as an important step toward improving factory safety in that country, saying it would add pressure on other Western retailers and apparel brands to do likewise. C&A of the Netherlands and two British retailers, Primark and Tesco, quickly joined in.
The new agreement calls for independent, rigorous factory safety inspections, with public reports and mandatory repairs and renovations underwritten by Western retailers. A legally enforceable contract, it also calls for retailers to stop doing business with any factory that refuses to make necessary safety improvements, and for workers and their unions to have a substantial voice in factory safety.
In announcing its move, H&M said that “in order to make an impact and be sustainable,” the agreement “would need a broad coalition of brands.” A company statement said the agreement committed participants to the goal of a safe and sustainable garment industry in Bangladesh “in which no worker needs to fear fires, building collapses or other accidents that could be prevented with reasonable health and safety measures.”
Worker rights groups have praised the accord. Other big names that have since signed on include PVH, Tchibo, Marks & Spenser, El Corte Ingles, jbc, Mango, Carrefour, KiK, Helly Hansen, G-Star, Aldi, New Look, Mothercare, Loblaws, Sainsbury’s, Benetton, N Brown Group, Stockman, WE Europe, Esprit, Rewe, Next, Lidl, Hess Natur, Switcher, Sean John, and Abercrombie & Fitch. But numerous investor, religious, consumer and labor groups are pressing even more companies to sign on.
Noticeably absent from the accord are Wal-Mart Stores, the American chain that is the world’s largest retailer, and other big name US firms. Wal-Mart had announced that it would not sign the accord, but instead would make public its safety inspections at all of its suppliers’ authorized factories in Bangladesh. It committed to complete reviews of its 279 supplier plants within six months. The factory names and inspection information would be posted on the company’s website.
The company said it would also evaluate factories’ electrical and fire-safety systems, review their compliance with local building standards and permits, and visually inspect buildings for signs of structural distress. Production would cease immediately at factories where urgent safety issues were identified, Wal-Mart said.
However, at the end of May, Wal-Mart and other US retailers, likely feeling pressure from consumer and labor groups for not doing enough to ensure factory safety, decided to forge their own industry plan. The new effort is being spearheaded by the Bipartisan Policy Center, a nonprofit group based in Washington DC. According to the Center, leading retailers such as Gap, JC Penny, Sears, Target, Wal-Mart and others, together with the National Retail Federation and the American Apparel and Footwear Association, would work to “develop and implement a new program to improve fire and safety regulations in the garment factories of Bangladesh.”
Two well-regarded veteran US politicians, both members of the Bipartisan Policy Center – former Senators George J. Mitchell, a democrat, and Olympia J. Snowe, a republican – are leading the effort. The new group, which was joined by the Retail Industry Leaders Association and the Retail Council of Canada, issued its formal plan in early July, which comes with a $42 million fund to improve safety conditions in Bangladesh’s factories over the next five years.
The new US-led plan requires all factories working with the 17 retailers in the pact to be inspected within a year and for the results to be made public. The group says it will implement safety standards by October and refuse to buy from factories they determine to be unsafe. Each retailer’s financial contribution will correspond to the size of its operations in the country, with those with the most production paying $1 million over five years. It also offers funds for displaced workers and low interest loans for quick repairs. An NGO will implement the plan, while a board will release semi-annual progress reports.
According to media reports, US retailers opted out of the European-dominated plan out of concern over legal liabilities. Critics, however, say that the American retailers were uncomfortable with the binding obligations and the potential costs of the plan. They also say the US plan will divide the industry.
To be continued...