Unless the entire industry has been inspected, the risk of catastrophe remains unchanged

Unless the entire industry has been inspected, the risk of catastrophe remains unchanged

Major EU and North American brand importers and retailers have separately announced plans to inspect their supplier factories in Bangladesh and to offer funds and assistance with remedial action where required. But David Birnbaum believes that unless they inspect the entire industry, their efforts will fall short.

EU customers who are part of the Accord on Fire and Building Safety in Bangladesh have listed 1000 factories that currently supply them with garments, while the North Americans in the Alliance for Bangladesh Worker Safety say they source from 500.

The results will no doubt be accurate and transparent. When completed, the world will know which of the factory suppliers are in compliance and the specific work being carried out to bring the uncompliant into compliance.

This is a monumental task never before carried out to this extent and including so many factories.

No one can accuse the retailers and brands of lack of good will. Their hearts are definitely in the right place.

Now here is the problem. The Bangladesh garment industry consists of between 4000-5000 factories, all of which are exporting garments, two-thirds of which go to the EU.

The EU and North American inspection plans cover 20%-25% of the factories. Of the remaining 75%-80% not being inspected, most are exporting to them indirectly.

These are the sub-contract factories, which for the most part are unknown to the customers who deal only with their direct suppliers.

In the next 12 months, as the compliance inspections end and remedial action takes place, there will be two possible outcomes.

  1. Customers will ensure their goods are produced only in factories that have passed inspection - without the uncounted subcontracting majority - in which case we can expect imports from Bangladesh to have declined by something on the order of 50%.
  2. Imports from Bangladesh will have remained unchanged, in which case we can assume that the army of underground un-compliant subcontractors will remain still uncounted, still underground, still uncompliant and still producing.

Both the EU and the North Americans are still locked into the same paradox.

They want imports from Bangladesh, but they cannot work in a country where unscrupulous factory owners in collusion with a corrupt government continue to put workers' lives at risk.

By limiting their inspection programme to their primary suppliers, customers can carry out the necessary work to ensure those factories are compliant in a limited period of time at a reasonable cost.

One plus factor is that the factories to be inspected include 100% of those located in secure and safe structures and meet the most rigorous compliance standards.

The most rigorous inspection at Pacific Jeans or Youngone might yield such complaints as "2 fire extinguishers in cutting department 3cm below required height", or aisle marking at line 26 requires repaint" - not the things that lead to disaster. 

The real problem is not with the factories to be inspected but rather the 3000-4000 that will not be inspected. It is here that lie the most egregious failures as well as the costliest remedial action. To inspect the entire industry is well beyond customers' capabilities. They would require years and billions of dollars and euros to carry out the necessary work. 

The question: What is the value of the current programmes?

Imagine a ship that is sinking, and where the captain orders all holes in the structure to be repaired - in the first class cabins only. This is the EU programme.

Until and unless the entire industry has been inspected, including all the factories, direct suppliers and subcontractors alike, the risk of large scale catastrophe leading to multiple deaths remains unchanged. 

Next time a fire burns down a factory or a factory building collapses leading to the death of hundreds or possibly thousands of Bangladeshi workers, the customers will be held responsible because they have taken on the responsibility to bring their suppliers into compliance. 

Next time, consumers will not accept the excuse "We did not know our 300,000 garments were being produced in that factory."

And, as customers finally pull out, it will be the good factories - those that were always in compliance, those that paid wages well above the average - who will be the victims of the customer save-the-industry-programme.

Click here to see how the Bangladesh safety pacts measure up.