What's the cost of cheap clothing?
What's the cost of cheap clothing?
Sadly, today’s guest post from my friend Marcus Chung is timely. The New York Times reported this morning on another factory fire in Bangladesh, this one killing seven women. Is this the price we must pay for cheap clothes? Marcus thinks not -- although he’s just 36, he has worked for about a decade on corporate responsibility issues in the apparel industry, doing stints at Gap and Talbot’s. I’ve gotten to know Marcus as a fellow board member at Net Impact, a nonprofit organization of students and young professionals who want to use their business skills to make the world more just and sustainable. That’s exactly what Marcus, a Wesleyan grad with a UC Berkeley MBA, is doing in his current job, consulting for a global retailer of children’s clothing. Here’s his report from Bangladesh.
From the moment you arrive at the Dhaka airport, it’s clear the apparel industry is vital to Bangladesh’s economy. Airport walls are lined with posters advertising local garment manufacturers, textile mills, and trims suppliers. Apparel accounts for between 70 and 80 percent of exports, so it’s no surprise that almost everyone on my flight from Hong Kong to Dhaka declared their profession as ‘buyer’ or ‘sourcing’ when clearing through immigration.
I visited Dhaka on behalf of a client to get a better understanding of the CSR challenges, trends, and opportunities that large apparel brands face in sourcing from Bangladeshi garment factories. Following November 2012’s tragic Tazreen Fashions factory fire that claimed the lives of more than 100 workers, there is renewed focus on how the industry can promote better factory working conditions. Tazreen was just the latest in a string of Bangladeshi garment factories that burned to the ground, but it also was the country’s most devastating in terms of lives lost.
Western mass-market apparel retailers source from Bangladesh because they can get a solid product at a competitive price. The apparel industry cannot ignore a fundamental commercial reality: Bangladesh has a ready supply of very capable garment factories that are filled with inexpensive labor. It’s not realistic (or probably advisable–MG) for companies to simply stop sourcing from the country. Therefore, the industry must do a better job of sourcing in a responsible manner that protects the rights of workers and includes basic commitments to a safe and healthy work environment.
A multitude of challenges
Over the years, I’ve heard many hypotheses about why fire safety continues to challenge so many Bangladeshi factory managers. Some cite an ineffective, corrupt government that does not enforce its own building code regulations. Others believe factory middle managers, myopically focused on production output, lack the ability or understanding to support fire safety practices with workers. Many believe pressure from Western brands to achieve low-cost goods encourages subversion of basic health and safety standards. I’ve heard people claim the root cause is a basic lack of infrastructure: old, multi-story buildings with poor electrical wiring; unreliable power supply (I cannot count the number of times the power went out during my visit) that causes short-circuits; and dusty, flammable materials lying dangerously close to unprotected electrical outlets. I spoke with one CSR leader who lamented a general lack of civil society and a culture where officials will agree to make improvements, but never follow through.
Next page: Any hope of change?
Signs of more systemic change
There’s no doubt that the Tazreen fire has shaken the garment industry in Bangladesh. In each of my factory visits, owners and managers were eager to show me the improvements they’ve made in fire safety, many of which were recent and required financial investment. Even unsolicited, factory managers would point out the fire extinguishers and emergency exits on each floor. One factory owner was immensely proud to show me his newly installed on-site water pump, with hoses that could reach the top of the building. He eagerly invited some workers who were trained to use the hoses to demonstrate the system’s ability to reach the roof of the nine-story building.
But why build a nine-story factory to begin with? One factory manager explained to me that each floor in his building was in fact a separate legal entity. Even though he owned the entire building and each factory within it, government incentives encouraged the practice of adding new factories on top of each other. The top-most factory, added to the building only one year ago, was made possible because the factory owner did not have to pay taxes on one year of factory operations after its establishment.
Many people have cited the vertical ‘stacking’ of factories as especially problematic. Last October, Gap Inc. announced a plan to address building fire safety standards in its contract factories in Bangladesh. While many companies have rightly focused efforts on fire evacuation (ensuring the factory conducts regular fire drills and requiring each factory floor to have an adequate number of fire escapes), the Gap initiative brings in expert engineers to identify tangible structural improvements. To me, this approach starts to get at some fundamental challenges across the entire industry in Bangladesh and also in other countries.
Next page: Demands from clothing retailers
Along with the physical improvements that will be demanded by Gap and other brands, a culture of fire safety awareness and fire prevention seems to be taking hold. One factory I visited had organized a fire-fighting team in each production area. The teams were composed of factory workers and management, creating a level of accountability, collaboration and worker-management discourse that previously did not exist. I applaud this approach not only because it addresses the immediate fire safety challenge, but also because it begins to build a culture of open discourse between production managers and workers. Members of this team wore yellow vests with the word ‘fire’ printed on the back and team member photographs were highlighted prominently on posters in each area.
Factories in Bangladesh are far from perfect and it’s clear the industry has a long way to go toward better conditions, but two things keep me optimistic. First, brands are making real investments in the country’s future. Sourcing leaders – not just CSR professionals – from the world’s biggest apparel brands are seriously looking at factory health and safety. I recently attended a meeting on Bangladesh fire safety standards where half the attendees were sourcing executives and the remainder were CSR professionals.
Second, there seems to be a willingness to change among factory managers. The big garment manufacturing companies in Bangladesh know that they’re under the spotlight. Media are now focused on challenges that brands have been raising for years. The garment industry is too important for Bangladesh business owners and government to put at risk with lax fire safety standards.
It’s unconscionable that any person should lose his or her life in the name of garment manufacturing. If nothing else, let’s hope the tragic fires of Tazreen, Hameem and others serve as a catalyst for real change. With responsible sourcing strategies and principled decision-making, we can put ourselves on a path toward a safer industry that respects the value of each and every worker’s life.
Photo of Dhaka, Bangladesh provided by Aaron Gekoski via Shutterstock.