Are Retailers Really Willing to Invest in Reform of Bangladesh Garment Industry?


Last week, the Obama administration revoked special trade status for Bangladesh in what is a growing tidal wave of international pressure for quicker and better implementation of garment factory safety standards following the Rana Plaza disaster that claimed more than 1,100 lives.

The turmoil over who is responsible for safety and inspection continues unabated, with countries, brands and governments often at odds over the best way forward.

“Inspecting Bangladesh’s garment factories is an acutely complicated task,” notes The New York Times. “No government agency is certain of precisely how many such factories operate in Bangladesh, or where they are. Some inspectors are discovering that building plans filed with government agencies do not always match the actual buildings. Many factories built during the 1980s and 1990s have no architectural drawings at all.”[more]

Dhaka’s development authority, Rajuk, has been blamed in part, but with just 40 inspectors overseeing nearly one million structures in Dhaka, the task is beyond daunting. Shortly after Rana Plaza, the Bangladesh Garment Manufacturers and Exporters Association hired ten engineers who closed down 19 factories, but the vast majority remain uninspected.

Kmart Australia has close ties with garment manufacturers in Bangladesh and while the retailer will not sever those ties, managing director Guy Russo says they will not tolerate unsafe buildings or work practices and that the Dhaka tragedy spurred them to institute structural building checks as standard practice.

“To be quite honest, the thing that we weren’t checking in our audits was building safety,” Russo said, according to Voa News. “We refuse to do business with anybody that even considers to try to have a sweatshop or underage employees. But the one thing that we weren’t doing were building checks and after this building had collapsed, I mean it touched me as much as it did every other Australian that has seen this terrible disaster.”

Canada’s foreign minister, John Baird, pledged to “work together with Bangladesh to improve compliance in the RMG sector,” adding, “Canada does not believe that workers in the sector should be punished through any kind of trade restrictions,” the Daily Star reports.

Meanwhile, major US apparel retailers Walmart and Gap, who chose not to sign the Accord for Fire and Building Safety in Bangladesh, are taking their own steps for industry safety. “We share the goals of the European Accord, but differ on the best way to get there,” said Debbie Mesloh, senior director of Public Affairs at Gap, Fibre2Fashion reports. “Our view continues to be that the right path forward needs to also include local stakeholders such as the Bangladesh Government, local industry and worker representatives.”

Echoing the sentiment, Megan Murphy, senior manager of International Corporate Affairs at Walmart, said, “We have taken a number of actions that meet or exceed other factory safety proposals which include strengthening safety standards for factories, a zero-tolerance policy for unauthorized subcontracting and increased transparency and requiring that in-depth safety audits and remediations be made to every factory directly producing products for us in Bangladesh, reflected in the cost of the goods that we buy.”

The brands, along with several other US retailers and the National Retail Federation recently announced that they are close to finalizing a $50 million fund that would support infrastructure improvements in Bangladesh. 

Ongoing issues and delays in action have forced several retailers to look elsewhere for garment sourcing. India, while not wanting to prosper at their neighbor’s expense, expects $1 billion worth of additional orders in the current fiscal year and reports that many international brands have already inquired about increasing production in the country. 

Mary Ann Peters, US ambassador to Bangladesh from 2000 to 2003 writes, “For retailers it must be tempting to cease operations in Bangladesh and source textile products from less headline-prone countries. But that would send shock waves through the country’s economy, which is heavily dependent on the ready-made garments sector.” That fear, which has been well circulated by Bangladeshi garment executives and government officials may be realized now that the US has put trade with Bangladesh on the proverbial black list.