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Bangladesh: Behemoth Garment Industry Weathers the Storm

by Alyssa Ayres
June 20, 2014

Employees work in a factory of Babylon Garments in Dhaka January 3, 2014 (Andrew Biraj/Courtesy: Reuters) Employees work in a factory of Babylon Garments in Dhaka on January 3, 2014 (Andrew Biraj/Courtesy: Reuters).

Over the weekend I had the opportunity to participate in an excellent conference focused on Bangladesh, its development, and its garment industry hosted by Harvard University. The organizers did a tremendous job convening the many diverse stakeholders on this issue—the Bangladeshi garment exporters associations, representatives from the Bangladeshi and U.S. governments, representatives from major buyers and retailers, fashion industry associations, labor rights advocates, the International Labor Organization (ILO), and scholars examining developments in global retail and labor. The background to the gathering, obviously, was last year’s tragic collapse of the Rana Plaza building in Dhaka on April 24, 2013, which killed more than 1,100 and left more than 2,500 injured.

In the aftermath of Rana Plaza, many feared that global brands and retailers—primarily in the European Union and the United States—would shift their orders away from Bangladesh, thus potentially disrupting the source of livelihood for some four million workers, primarily women. In the year since, there has been intensive negotiation and consultation among governments, international organizations, and the private sector in the United States, European Union, and Bangladesh, resulting in agreements that provide better oversight, governance, and compliance on workplace safety and labor matters. Between the Accord on Fire and Building Safety in Bangladesh, the Alliance for Bangladesh Worker Safety, and the EU-ILO-Bangladesh Global Sustainability Compact (which the United States endorsed in July 2013), there is now more significant focus on factory safety conditions, including structural integrity and fire safety protections, than ever in the past.

Bangladesh’s garment industry is huge, the world’s second-largest garment exporter after only China, and as the Economist Intelligence Unit report, “Garment shift,” commented recently, Bangladesh’s scale is “nearly on par with total combined capacity of its main competitors in Southeast Asia.” It has nearly 5,000 factories producing exports valued around $20 billion (2013). Fixing its problems with factory and labor conditions thus has represented an effort of historic scale.

And over the past year, there has been positive change. Bangladesh has made progress with a new labor law, higher minimum wage, and one hundred fifty-plus new labor unions registered. The ILO and International Finance Corporation have launched the largest Better Work program in history. Inspections of factories supplying members of the Accord and the Alliance are well underway, with remediation taking place to get buildings up to international standards. Factories found to have irremediably unsafe conditions have been shut down. Still, with such a large industry, much work remains. As the U.S. ambassador to Bangladesh noted in his remarks at the conference, Bangladesh still needs to complete hiring and training the two hundred building inspectors they committed to employ; all the buildings housing factories need to be inspected and brought to safe standards; reports of those inspections should be made public per the Compact; and harassment and intimidation of labor unions and activists should stop. Bangladesh can get this done, but it needs to keep pushing ahead.

From my perspective, the surprise has been how well Bangladesh has weathered this difficult storm so far. No one knew how the global garment industry would respond after Rana Plaza—perhaps by diversifying their sourcing slightly, or greatly? Would Bangladesh’s workplace conditions present just too much risk until fully remediated? Back in January, admittedly on the heels of a violent political season that saw road traffic shut down for days on end, it seemed that Bangladeshi garment exporters were facing tougher times. Press reports detailed exports “losing steam,” with growth at 7.1 percent in January, “less than a quarter of the year-on-year growth recorded in November.” People worried that the hartals (street strikes), higher wages, and company interest in hedging supply chains was causing a turning away from Bangladesh.

The latest data show that has not transpired. Looking at the latest export statistics shows only a slight drop, with textile and apparel exports to the United States falling only 0.56 percent to $1.77 billion (US Commerce data, year over year). The latest data from Bangladesh show 14 percent growth for the industry overall in the July 2013-May 2014 period. The Bangladesh Garment Buying House Association has reported that orders from “compliant” factories are rising 15-20 percent. And the U.S. Fashion Industry Association just released a survey of brands and retailers detailing that 76.9 percent of those surveyed currently source from Bangladesh, with 60 percent anticipating that they will “somewhat increase” from Bangladesh in the “next two years.”

With the Accord, Alliance, Compact, Better Work program, and such focused attention to needed improvements in Bangladesh’s workplace, the systems are in place to preserve the gains the country has made over the years through the garment industry. It now depends on all parties seeing this through at the scale needed to transform the industry.

Follow me on Twitter: @AyresAlyssa

Post a Comment 4 Comments

  • Posted by Jeff Hermanson

    There is some room for optimism, and the Accord – a binding contractual agreement by global brands to take responsibility for the safety of the factories producing their goods – is an important step forward. The Alliance, on the other hand, is a voluntary effort, which likely will collapse when the bills for renovation start coming in. The Better Work program is another effort that is fatally flawed, judging by the failure of the same program in Cambodia, Haiti and Nicaragua to do much of anything to improve conditions. What will really change the outlook would be broad organizing of workers into strong unions, able to force factory owners and global brands to pay more and respect their rights. Forming 150 factory level unions is a start, and this has come at tremendous cost in effort, courage and sacrifice, as workers and organizers often face violence at the hands of employer-paid thugs and police; but 150 unions represents less than 2% of all factories in the garment industry, and most of these unions do not have the power to negotiate collective bargaining agreements. What is really needed to improve the industry in Bangladesh and elsewhere is for the global brands that direct and derive immense profits from the labor of these garment workers to sit down with unions in Bangladesh, Cambodia and other countries and negotiate binding agreements covering all the terms and conditions of employment in their supplier factories. It’s great that 170 brands were forced to sign an Accord on Fire and Building Safety in Bangladesh – now let’s force them to sign an Accord on Wages, Working Conditions and Freedom of Association in their global supply chains.

  • Posted by md. masuduzzaman khan

    Type your comment in here…
    Very informative artical. Bangladesh did lot of progress to improve compliance & buildings safety after rana plaza tragedy.

  • Posted by Tanvir Nowaz

    It seems you too were cleverly deceived into taking side with serial abusers and owner class. The event was celverly used to sanitized and normalized dictator govt officials and well known Nazi type mass murderer Minister Tofael Ahmed by betweing them the stage and recogcnition. The current govt of Bangladesh is not mandated and voted by people as more than half MPs are selected without people’s votes. THey do have any mandate to be recognized as representative of people. You should do your homework before writing this piece.
    When a fascist democracy robbing, vote robbing, extra-judicial killing govt ministers and representatives are given central stage, when well known mass murderer (60 thousands) like Rakkhi Bahini ( http://en.wikipedia.org/wiki/Jatiya_Rakkhi_Bahini. ) leader Tofael Ahmed is given central stage, when serial labor abusers, exploiters, and involuntary murderers like BGMEA/BKMEA are glorified and given priorities over the plight of labors, it is unfortunately not a seminar…it becomes a criminal-laundering-machine that uses Harvard’s good name as its detergent.

    With all due respect, this seminar seems to have reduced to a total exercise in futility. Did the seminar able to get any commitment from govt for minimum wage? For work place safety? Any health benefits for workers? What are they?

    Harvard, a supposedly champion of liberal causes, was expected not to act as empowering facilitator of a brutal autocratic government whose eradication of democracy, human rights and rule-of-law from the face of Bangladesh has affected not only the garments labors but also all other labors. When the mandate-less. people’s vote less govt’s only power base becomes police and security forces, it does not account to anybody, let alone to the labor right’s bodies.

  • Posted by Tanvir Nowaz

    labors are still lambasting without any minimum wage. The average is $38/month. Shame on the author to glorify and certify the owner class and not ting their feet to fire. Shame on the author to glorify and cover a seminar what was chief guested by a well know leader of mass murderer militia force ( killed 60 thousands civilians). Did the seminar get anything for the labor? This even is organized by the dictator and mass-killling undemoratic govt’s MA operative called Iqbal Yousoof to give govt some legitimacy as it is not recognized in Bangladesh as legal authority to represent the people. The govt dictatorially holding on to power with engineered election in which more than half MPs were declared as winner without any vote or contest. That’s what the seminar about. To give them some opportunity to rub their shoulder with western academics so that they get some aura of legitimacy.

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