Since the main focal point of the apparel manufacturing industry has shifted from in-house production by foreign retailers to local manufacturers and exporters (in the form of outsourcing and off-shoring), it is not only the quality parameters which attract foreign retailers and consumers to accept products as per their intended end use, but also the working environment of the indigenous factories where the products are produced. Factory work environment and workers’ quality of work-life are important in gaining and strengthening consumer confidence and building up a more reliable manufacturer-retailer-consumer relationship. It is also important that the sweatshop concept and health and safety issues are settled once and for all. In order to achieve this, an acceptable level of work environment standard must be stretched to achieve the objectives of social compliance issues. Therefore, reputed foreign retailers tend to design and develop their own Code of Conduct as per their social accountability standards. These CoCs are then made obligatory for the outsourced Bangladeshi local factories that are given work orders to manufacture clothes. These CoCs tend to rely heavily on the idea of social compliance. Basic awareness on social accountability helps us to understand and monitor the compliance aspect in protecting the image of a particular brand of product. Bangladesh has been working to the specifications set by global retailers. In spite of this, while following the CoC criteria is compulsory for satisfying retailers’ requirements, the local Bangladeshi culture and regulations of the government cannot be overlooked. Despite the existence of a labour act and BGMEA’s standards, foreign retailers have made it mandatory for locally outsourced factories to follow their individual CoC regarding product and workplace safety, labour standards, work environment, and child labour issues. On top of this, recent pressure from the Accord and the Alliance agreements also indicate that the global supply chain does not hesitate to take its own initiative when the implementation of the local safety programs by Bangladeshi factories cannot be trusted. Although it seems that the imposition of the global supply chain’s safety requirements on local producers have generated positive changes with regard to workplace health and safety issues, it has similarly made it very difficult for many local factory owners to operate their factories under the individual CoCs provided by each buyer. For example, instead of having one standard buyer’s CoC, each buyer tends to have its own safety and security standards, whereby the terms and conditions differ from one buyer to another. In my recent interaction with some of the biggest global retailers (Walmart & H&M) in Dhaka, they claimed that producing garments in countries which are new to the industrialisation process (ie Bangladesh) is a painful process. They argued that, considering the fierce global pricing competition, it is impossible for them to increase the CMT (cutting, making, trimming) price. I also saw that, due to only a couple of days’ delay in shipment, how a buyer/retailer, upon cancelling a work order, returned with a later offer to its local manufacturer to buy the apparel at a third of the original cost of production. In reality, some re-adjustments are also required on the part of such retailers as well. It is of course desirable that our factories should pay higher wages and provide an acceptable level of welfare-oriented services to their workers. Empirical studies show that many factories in Bangladesh have made a considerable investment in equipment and facilities in order to comply with the global buyers’ CoCs and with the Accord and the Alliance safety assurance programs. Nevertheless, I have observed that the abrupt reduction in CMT charges in recent years by these retailers and the increasing pressure to comply with their industrial safety and product quality requirements have resulted in huge additional expenditure in overhead costs by the majority of factory-owners in the country. Do we have that time and money? In the last three and a half decades, the RMG sector has experienced tremendous growth. According to the international consulting firm McKinsey & Company, currently Bangladesh is the second-largest manufacturer and exporter of apparel after China, and on its way to becoming the largest within the next five years. Shortly after the fire at Tazreen Fashions and the collapse of Rana Plaza, customers were bewildered by these claims and shocked by the striking number of deaths and injuries caused by these accidents. I saw many overt protests by regular customers in front of Benetton, Primark, and Matalan stores in London and elsewhere, and these ordinary consumers were outraged to find that the outsourced Bangladeshi factories had unsafe working conditions and that the wages of the workers were the lowest in the world. The responsibility for ensuring workplace safety applies to all of the parties involved: The manufacturer, the retailer, the consumers, and governments. Notably, given the proliferation of the use of all of the OHS instruments (eg the labour act of Bangladesh, retailers’ CoCs, the Accord & Alliance agreement, etc as a means of preventing workplace accidents), the question of whether any level of leniency or negligence is observed among the factory-owners in administering these provisions requires investigation. Certainly, repeat offenders and violators of the OHS provisions and compliance requirements must be brought to justice and penalised heavily. Similarly, the global buyers cannot deny their accountability, and should also continually push their CSR efforts to allocate funds to increase and maintain compliance standards in their outsourced factories, and to foster full transparency in the supply chain via their local sourcing offices. In order to secure Bangladesh as their sourcing powerhouse, these buyers must engage in a “fair price” practice, and should change from a “directive” role to a “co-operative” role to enable a close buyer-supplier relationship.
