Remedial plans may be doomed to fail a new report suggest

Remedial plans may be doomed to fail a new report suggest

Major remedial plans established in the wake of the Rana Plaza disaster are “failing to address” the greatest risks posed by the systemic weaknesses of the Bangladeshi RMG sector, says a new report.

Meanwhile, the country’s government lacks the resources, administrative capacity and sheer will to protect garment workers, while international brands need to recalibrate their business relationships to prioritise transparency and long-term commitment.

The claims come in a report compiled by the NYU Stern School of Business’ Center for Business and Human Rights, and authored by Sarah Labowitz and Dorothée Baumann-Pauly.

“Business as Usual is not an Option: Supply Chains and Sourcing after Rana Plaza” is based on a year’s research, including more than 100 interviews and focus groups involving buyers, suppliers, workers and policy makers.

The central theme of the study is that not enough work has been devoted to examining and resolving the risks of Bangladesh’s dominant indirect sourcing model.

“To date, too little attention has been paid to connecting the dots to provide an overall assessment of where things stand and what really needs to be done to ensure safer factories and better working conditions,” the authors argue.

Central to this is the lack of transparency – to both buyers and regulators – of the industry’s indirect sourcing model: “In the absence of an effective regulatory framework, the prevalence of indirect sourcing strategies has resulted in a supply chain driven by the pursuit of lowest nominal costs,” the report says.

“This has increased risks for business and workers by undermining wages and working conditions, as well as investment in technology and training, and improvements in productivity and quality.”

International remedial efforts
Crucially, the report argues that the major international remedial efforts – most notably the Bangladesh Accord on Fire and Building Safety, and the Alliance for Bangladesh Worker Safety – are failing to address the greatest inherent risks of the system.

While these initiatives cover less than 2,000 garment factories in Bangladesh, the report reckons there are some 5,000-6,000 in the sector as a whole, and warns: “The worst conditions are largely in the factories and facilities that fall outside the scope of these agreements.”

The Bangladeshi government fares little better in the report, lacking the “resources, administrative capacity, and often the will” to protect workers, thanks to labour law that is weak – and enforcement that is “weaker still”.

Local industry has what the authors describe as an “outsized influence” in politics, while the government’s ambitious National Action Plan aimed at addressing factory safety gaps is dismissed, since few of its provisions have been successfully implemented and “the government lacks the resources to make it real”.

Underlying these issues is the poor state of Bangladesh’s infrastructure, particularly its dysfunctional electrical supply which exacerbates the risk of future factory fires.

The report highlights the fact that international funds are largely directed into training and inspections, plus initiatives such as the Better Work programme run by the ILO and the IFC; but with corruption a major concern, foreign governments and the World Bank are reluctant to plough funds into infrastructure development.

Potential solutions
To alleviate this grim picture the report authors suggest a number of potential solutions, most notably the need for global brands and their first-tier manufacturing partners to “recalibrate their business relationships to prioritise transparency and longer-term commitments”.

This should start, it is argued, with a thorough assessment of all of the factories involved in the sector in Bangladesh, leading to an “ambitious but practical” plan aimed at addressing the most urgent risks.

“Though this will be a long-term and difficult task, global brands should not cut and run from Bangladesh,” the report warns.

Meanwhile, it says the government needs to “reclaim ownership” of the country’s regulatory system, rather than continuing to outsource regulatory functions to trade associations and other bodies.

But more international help is needed, the report concludes: “The task of repairing and rebuilding the most hazardous factories in Bangladesh will take years to complete and cost hundreds of millions of dollars.

“The effort to build a functional infrastructure will require still greater resources.”

It is, the authors contend, “unfathomable” that the government and the private sector can accomplish this alone – instead the international community, including foreign governments, the World Bank and other multi-lateral institutions, need to “step up” as well.

Otherwise, the report warns, the consequences could be devastating: “Absent an infusion of significant international support, we are destined to see recurring tragedies in Bangladesh, which represent a growing threat to the long-term sustainability of its garment industry.”