Expert View: Ten years after Rana Plaza: little improvements to be seen

April 24 marks the 10-year anniversary of the Rana Plaza factory collapse in Bangladesh. It remains the biggest factory disaster ever, killing more than 1,000 people and injuring more than 2,500, most of them working in garment production. The disaster not only?revealed the poor conditions of the buildings, but also the?imbalanced power relations in the garment industry facilitating exploitative labour?conditions and low wages?of garment factory workers. Ten years later,?little has changed in garment-producing countries, while fashion brands remain extremely powerful.?Have working conditions improved for garment workers? What are big fashion brands doing now to improve working conditions? And are brands taking their responsibility?

Garment workers pay the price

The Rana Plaza disaster in 2013 revealed that the issues in the garment industry were far wider than safety hazards. It also exposed the extremely harsh working conditions of garment workers to the world, such as long hours, low wages, and many cases of harassment. Labour unions, NGOs, and activists were demanding change. Under pressure, the?Accord on Fire and Building Safety in Bangladesh?was signed by fashion brands, a legally binding agreement to ensure safety for factory workers. Since then, some improvements have been made, and the Accord was recently renewed in Bangladesh and expanded to Pakistan. However, the systematic problems of the industry remain.

Years later, in the spring of 2020 when the pandemic hit, yet again the persistent structural weaknesses and injustices of the global garment industry came to light. This is clearly demonstrated in?research?by?Profundo?for the?Asia Monitor Research Centre?(AMRC), based on interviews with NGOs and trade unions active in garment-producing countries in Asia.

Brands like Adidas, H&M and Amazon were cancelling orders and demanding the postponement of payments. Millions of workers lost their jobs, often without any severance pay. Many more millions suffered disastrous income losses as factories suspended production or cut hours, further exacerbating already serious labour rights violations.

Based on a?survey?among 396 garment workers across 158 factories in nine production countries in 2020, the Worker Rights Consortium found that 38% of workers were temporarily or permanently dismissed, of which 70% did not receive their full legally mandated severance pay, and of which 40% received nothing. One example is Hulu Garment in Cambodia, a supplier of Amazon, who suspended its entire workforce in March 2020 without severance pay. Hulu Garment withheld?USD 3.6 million, while Amazon’s net profits?shot up by 84% during 2020. Other garment workers saw a?21% drop in income, which resulted in many people going hungry. Furthermore, there was an increase in anti-union violence and union busting, health & safety issues, and discrimination against migrant workers. Women were impacted disproportionately.

CSR commitments contradicting practices

Due to imbalanced power relations in the garment supply chain, big fashion brands have the power to facilitate exploitation through their purchasing practices. A?survey?by Better Buying among 179 factories in 30 countries shows that during the pandemic 64% of the garment factories received cancellations without payments for costs already incurred, often for clothes that were already made or even shipped. It is estimated that in Bangladesh alone there was?USD 3.18 billion?worth of order cancellations by brands due to the pandemic.

On average, brands in the garment sector have more human rights policies in place than large companies in other sectors. However, during the pandemic, brands have failed to uphold those principles in practice. According to the Corporate Human Rights Benchmark,?70%?of 229 of the largest companies in five sectors, including 53 apparel companies, did not report on adopting measures for suppliers, such as speeding up payments or ensuring all workers get paid sick leave. Only 6% indicated that they would consult with workers’ representatives when developing policies to protect factory workers from the impacts of the pandemic. Most brands only committed to action following pressure from civil society out of fear of reputational damage or they made one-time cash donations to charities. These actions did not tackle the exploitative systems that continue to dominate the industry.

After some recovery since the pandemic, orders in the garment industry dropped again in the past year due to soaring inflation and increasing unpredictability because of the Russian invasion of Ukraine. Brands again demanded to postpone payments or requested to halt shipments, which in turn had an impact on garment workers.

Moving forward

Rana Plaza put the spotlight on the physical working conditions in the garment sector. The past ten years have learned that this is part of a broader problem of poor physical, financial and social working conditions caused by exploitative purchasing practices. Despite brands’ voluntary commitments, reality shows that their corporate social responsibility (CSR) efforts have not been sufficient to protect workers. We should move away from false promises and empty words and move towards brand accountability. The industry needs mandatory human rights due diligence that is strict enough to significantly change the power relations and protect workers in the whole supply chain, also in times of crisis. Multiple pieces of legislation are currently being developed both on the EU and country levels. Based on our research for AMRC, we recommend taking the following steps for stringent and effective legislation:

• Overcome shortcomings of CSR. The voluntary nature of CSR allows brands to avoid accountability. Moreover, CSR often appears to be lacking real impact for the workers, for whom it is intended. Legally binding due diligence is a way to hold brands accountable for the actions in their supply chains.
• Address the power imbalance. The structure of the global garment industry allows brands to carry minimal risks while exerting maximum power over their supply chains. Brands determine all the terms in their relations with the factories, driving down prices to save costs. Factory owners in turn then shift the burden to workers, who already are the most vulnerable in the chain. Because brands are contracting suppliers and are not legally owning the factories, they can claim they are not responsible for the workers in the supply chain. However, it can be argued that they are joint employers of the workers and therefore they should be held legally liable for the working conditions of garment workers producing their clothes.
• Guarantee living wages. By paying a living wage, the impacts of crises, such as the pandemic, would be less severe. Because workers were already at the poverty level, they had no savings to survive sudden dismissals or wage losses. Brands should commit to guaranteeing a living wage for all workers in their supply chains, for example by including non-negotiable clauses about wage levels in contracts with factory owners.
• Promote freedom of association. Factory owners often prevent workers from coming together. People who speak up lose their job or feel the consequences in other ways, because the factory owners are not able to meet their demands due to the pressure from brands. Whereas freedom of association and social dialogue are key to empowering workers to enforce their own rights. The voices of workers should always be central in negotiations and the development of legally binding labour agreements.
• Zero tolerance for discrimination. Developing and implementing human rights due diligence should always be gender-sensitive and intersectional. Understanding dynamics and risks specific to certain contexts that play a role on the work floor, such as caste and patriarchy, is key.

Despite addressing some safety hazards in garment factories in Bangladesh and other countries after ‘Rana Plaza’, the purchasing practices of fashion brands still facilitate the exploitation of garment workers globally. This even gets worse during times of crisis, such as the pandemic and the present war in Ukraine. The garment industry needs to move away from voluntary CSR commitments to mandatory human rights due diligence that will lead to structural changes. Only in this way, the value added and responsibilities will be fairly distributed across the supply chain.

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This Expert View is written by Vicky Kerckhoffs. The report by Profundo for AMRC “CSR to protect workers during a pandemic? Brand initiatives in Asia’s garment and electronics industries during Covid-19”, is available?here.?For more information, contact Vicky Kerckhoffs ([email protected]).

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