Saturday, April 23 marks the third anniversary of the Rana Plaza collapse in Bangladesh, the world's deadliest garment-factory disaster—and one of the worst industrial accidents since India’s Bhopal gas leak in 1984.
Global news coverage of the collapse, which killed roughly 1,200 people and injured about 2,500, shined a light on the human toll of cheap clothing and churned up public pressure to improve wages and working conditions in the global garment supply chain.
Coming on the heels of a factory fire that killed 117 workers, the Rana Plaza collapse appeared to be a turning point in the struggle for better working conditions in Bangladeshi garment factories: Western brands and retailers acknowledged their responsibility for the dangerous conditions in the factories, pledging support for the rights of workers and making promises to improve factory conditions.
Yet, three years after the disaster, little has changed for the 4 million workers toiling away in Bangladesh’s ready-made garment industry. As the public outcry faded, retailers quietly broke their promises.
Addressing the abysmal conditions of Bangladeshi garment factories would, to some extent, eliminate their main incentive for sourcing from Bangladesh—the nation’s dangerously low production costs. To remain competitive with their counterparts in Vietnam, Cambodia and Pakistan, Bangladeshi garment factories skimped on wages and workers’ safety, and employed thugs to silence workers pushing for better conditions, more rights, and even basic building safety.
Facing backlash following the Rana Plaza collapse, retailers quickly developed two nearly identical programs—the United States' Alliance for Bangladesh Worker Safety and the European Union’s Accord on Fire and Building Safety in Bangladesh—to improve workplace safety. The programs implemented safety training programs for workers, expanded access to financing for building-safety renovations, and created an anonymous hotline for workers to report safety hazards.
But progress has been slow. More than 1,000 factories have fallen behind schedule in implementing workplace safety improvements, according to a report published in November 2015.
Some retailers have failed to accurately report progress on factory remediation. Even though the world’s second largest clothing retailer, H&M, claimed publicly that the safety renovations at its factories in Bangladesh had been completed, a report on the progress of H&M’s preferred suppliers uncovered an average of 62 safety violations per factory.
Although brands and suppliers must flesh out a financing plan for improvements, the Accord stated that the factories’ inability to access financial assistance is a major cause of delays. As of August 2015, the Accord had collected only 579 finance plans, and the plans were often “inaccurate or incomplete,” according to the November 2015 report.
The convoluted supply chain, in which suppliers often sub-contract large orders out to other factories, also makes widespread reform difficult. Many retailers often unknowingly purchase products from non-complying factories.
Regardless, many retailers have given only lip service to offering workers a living wage and safe working conditions.
After the Bangladeshi government voted to raise the minimum wage to $68 a month following massive strikes in September 2013, many factories struggled to comply because retailers refused to pay for higher production costs.
Although corporate-driven reform and legislative action have failed to make a major impact, David Welsh, country director of the AFL-CIO Solidarity Center in Cambodia, has some ideas for improving the living and working conditions in an industry in which brands “race to the bottom” for low production costs.
“To counteract the brands’ habit of playing one producing country off another,” Welsh wrote in a New York Times op-ed, “governments from sourcing countries should act together: Rather than be driven by the fear of losing out to one another, they should form a bloc and insist that the big brands set uniform standards for wages, union rights and workplace safety.”
He also urged Western governments to take action, suggesting they make trade preferences to supplier countries, like Cambodia or Bangladesh, contingent “on the implementation of better protections for workers in sourcing countries.”
And you wouldn’t have to worry about your clothes becoming too expensive. Grameen Bank founder Mohamed Yunus suggested a 50-cent surcharge per outfit of clothing could make dramatic improvements in the lives of the workers.
Even without these reforms, the industry’s explosive growth has facilitated some, albeit limited, improvements for labor.
Although still categorized by the United Nations as one of the world’s Least Developed Nations, Bangladesh has become the world’s second largest garment exporter after China, having exported more than $24 billion of ready-made garments in 2014.
The high transaction costs of setting up new supplier relationships forced Western brands to forge longer-term relationships with Bangladeshi factories, giving the suppliers the confidence to make further investments and increase prices. The financial windfall occasionally fell to the workers.
H&M, which is one of Bangladesh’s top manufacturing customers, says that it purchases 60 percent of its orders from its preferred suppliers. H&M, which lists and grades all of its suppliers on its website, claims that these preferred suppliers, graded Gold and Platinum, have the “best performance in all areas, including sustainability.”
As Bangladesh acquired a reputation for producing high-quality clothing, other markets came knocking on its door. Japan became a major buyer, as did Brazil and South Africa, whose location in the southern hemisphere ensured year-round production for the factories.
The burgeoning number of factories now gives workers a slight degree of power—they can hop from factory to factory in search of the highest wages and best working conditions.
For many development economists, Bangladesh is proof that the free market can lift people out of abject poverty. Since 1978, when Bangladesh began exporting ready-made garments, the nation’s poverty rate dropped by half, life expectancy increased, infant mortality dropped, and literacy rates and per capita food intake spiked, according to the International Labor Rights Forum.
Riding the coattails of its economic growth, Bangladeshi leaders expressed an ambitious goal in its most recent Five Year Plan—attaining middle-income status by 2021 by doubling garment exports—a plan that the World Bank deemed difficult yet possible. Whether an improvement in wages and working conditions will accompany the boost in production is questionable.