• A new report highlights the inroads made into building safety for garment workers in Bangladesh over the past five years. 
  • But it also finds the violation of Bangladesh workers' rights has increased and the squeeze on suppliers has intensified.
One area where gains for workers has been dramatic is building safety

One area where gains for workers has been dramatic is building safety

Despite dramatic gains in building safety in Bangladesh since the Rana Plaza disaster, the violation of workers' rights has increased and the squeeze on suppliers has intensified, a new report has found.

Despite more than two decades of private voluntary approaches to address workers' rights in apparel supply chains, those in the lower production tiers continue to face poor working conditions and chronic violations of their rights, a report by Penn State Center for Global Workers' Rights (CGWR) explains.

Bangladesh, in particular, has been emblematic of low wages, poor working conditions, union-avoidance, and a series of mass fatality disasters in garment factories, culminating in the collapse of Rana Plaza in 2013. With the five-year anniversary of the catastrophe this week, the report – 'Binding Power: The Sourcing Squeeze, Workers' Rights, and Building Safety in Bangladesh Since Rana Plaza' – questions whether the intervening years have seen meaningful gains for workers.

Building safety

One area where gains for workers has been dramatic is building safety; largely the result of the binding agreements of the Accord on Fire and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety.

The report focuses on the work of the Accord, which was set up in the aftermath of Rana Plaza – its mandate to ensure that more than 1,600 factories of its signatory brands are safe for their 2.5+ million workers.

As of March 2018, the Accord has corrected 99,310 high-risk fire, structural, and electrical safety violation hazards in 1,619 factories. It has also terminated 96 factories for failure to implement required safety renovations, and required 50 factories to be temporarily evacuated due to their severe and imminent risk of structural failure.

The data shows 96.5% of Accord factories no longer lack safe means of egress due to lockable or collapsible gates. It has also provided in-depth health and safety training to personnel in 846 factories and has investigated and resolved 183 worker complaints.

Yet as the report points out, significant delays remain. Most factories that have not completed safety renovations are behind schedule relative to the original Accord-imposed deadlines; some 823 factories still lack fire detection and alarm systems that are up to code; and 286 factories have not correctly implemented their structural load-management plan.

In 2017, the signatories of the Accord decided to continue many of the Accord's main elements, while expanding its scope and coverage through to May 2021. As of this week, some 152 brands have now committed to the new agreement set to come into effect when the current programme expires in May.

Who has signed the new Bangladesh '2018 Accord' – Update

Despite the delays, the report highlights the success of the Accord model because it was negotiated between buyers and trade unions, because it holds suppliers as well as buyers responsible for the cost of safe buildings, because it is legally binding, and because it is transparent.

"It also has the crucial resources it needs – US$11m per year from 2013 to 2018 – to pay its approximately 94 highly-trained and specialised engineers and many other support staff. The challenge for Bangladesh going forward is developing state capacity to ensure full building safety while also maintaining buyer shared cost responsibility. In the process, Bangladesh must ensure full respect for workers' rights because informed, protected, and organised workers are a crucial component of safety, health, and good working conditions."

Pricing squeeze

But while the report praises the work of the Accord in improving building safety for workers, a survey of 223 Bangladesh suppliers between March 2016 and March 2017 found that prices have not been adjusted upward to cover the 2013 increase in the minimum wage, lead times are shorter, and the violation of workers' rights has increased.

The report, which set out to examine sourcing dynamics such as pricing lead times and payment schemes, questioned whether there was evidence of a sourcing squeeze, or whether buyers were improving the terms of their contracts with their Bangladeshi suppliers.

The survey results indicated that the average FOB price was US$4.64 in 2016, representing a 7.79% decline from $5.03 in 2011. For exports to the US the price point declined by 10.67%, while for European buyers, the price point came down by 9.04%.

"The push for shorter lead times – the time given to factories to make and ship a product – has received increased attention with the growth of fast fashion made famous by Zara's model of short fashion seasons," report authors explain. "Many buyers are seeking to develop this model because, if they can get consumers shopping for new styles with greater frequency, then they can sell more products each year. However, even retailers that do not engage in a full 'fast fashion' model are looking for greater speed to market. This allows them to more effectively manage inventory, which then results in a reduced need for discount products and thus greater revenue."

The report continues: "While there may be many inefficiencies along the entire supply chain, including getting products from in-country ports to retailers' shelves, often the supplier factories are the ones who face the greatest pressure to contribute to a retailer's desire for speed to market. When lead times are adjusted on short notice, this can put considerable pressure on a supplier's business operation and may result in forced overtime or unauthorised sub-contracting."

The survey findings indicate a reduction in lead times since 2011 of 8.14%, from 93.4 days to 85.83 days.

Workers' rights

Bangladesh's minimum wage is the lowest amongst major apparel exporting countries. Prior to the Rana Plaza disaster, Bangladesh's minimum wage was $39 per month, increasing to $68 after the disaster, at the 2013 exchange rate.

By February 2018, with the devaluation of the currency, the minimum wage stood at $63.60 per month, a 6.47% decline since 2013, the report points out. And the wages only cover an estimated 14% of living expenses.

Two months ago, the Bangladesh Government formed a new wage board that will recommend a minimum salary for workers in the country's garment industry following the recent labour unrest and calls for a more transparent and regular wage review mechanism. Unions have also renewed their calls for garment wages to triple.

Bangladesh unions renew call for garment wages to triple

This led the researchers to look at unionisation rates and the ability of workers to bargain for higher wages.

Bangladesh has been repeatedly notified by the International Labour Organization (ILO) that laws regarding freedom of association need to come into compliance with international standards, notably by allowing for unionisation in export processing zones and facilitating the unionisation process in the RMG sector by removing bureaucratic obstacles, government discretionary authority, and an unreasonably high 30% membership threshold requirement.

As the report points out, these issues with the labour law are compounded by violations in practice. In December 2016, some 1,600 garment workers were dismissed and 34 trade unionists were arrested and detained following demonstrations in the Dhaka region of Ashulia. In the aftermath, pressure by national and international labour rights advocates escalated, demanding the government release the detained workers and demanding that buyers put pressure on the government and on suppliers to respect workers' rights.

As a result of the organising efforts of Bangladeshi workers, unionists and their allies, unionisation increased after Rana Plaza. As of January 2018, there were 440 RMG factories with unionisation, up from less than 100 prior to Rana Plaza. However, the report found that the growth in union formation has not been maintained due to the increased tendency of the Bangladesh government to deny union registration and continued anti-union practices by employers.

"Workers' rights compliance remains a significant issue in Bangladesh. The responsibility to address these violations rests with suppliers and the government. And, as the data suggests, it also rests with buyers who must adjust their sourcing practices to facilitate compliance with labour standards and workers' rights," authors conclude.

Click here to view the full report.