A series of horrific industrial accidents in Bangladesh has revived the debate over labor rights, workplace safety, and the ethical responsibilities of multinational corporations in policing their own supply chains. These incidents have been centered on the textile and ready-made garment (RMG) industry, which raises difficult questions about the tradeoff between economic development and the dignity of individual workers. To groups like the International Labor Organization (ILO), however, this is a false choice, and labor advocates argue that securing safe working conditions and adequate pay is a key part of sustainable economic growth.
The textile industry is the driving force of Bangladeshi industrialization, and is central to the economy of the desperately poor nation. Exporting some $19 billion a year and representing the world’s second largest apparel sector (after China), the industry draws many of its millions of workers from the subsistence farming of the countryside to the hastily assembled factories on the outskirts of the teeming capital, Dhaka. Since 1974, with the adoption of the global Multi Fiber Arrangement, Bangladesh has been granted preferential access to EU and US markets, sparking the rapid expansion of the RMG sector.
Despite the benefits of the industry, the human costs are high. While the West seems, by this point, largely resigned to the low wages earned by those who stitch and sew its designer clothes, the recent spate of deadly events have been too gruesome to ignore. In November of 2012, the Tazreen Fashion Factory caught fire, killing 117 in the deadliest factory fire in the nation’s history. Then, on April 24, 2013, the eight-story Rana Plaza building in Dhaka collapsed, killing 1,127 workers in the world’s deadliest garment factory accident to date. The building had housed apparel companies that manufactured for a number of major international brands, including Benneton and Wal-Mart.
The outcry over the Rana Plaza disaster came swiftly, especially after it came to light that cracks had appeared in the building’s foundations the day before but the workers had been ordered back to work regardless. A government report released on May 22nd concluded that the complex had been “constructed with substandard materials and in blatant disregard for building codes” and suggested that the building’s owner had bribed local officials to overlook these fatal deficiencies. By that time, the EU had already threatened punitive action, including the restriction of Bangladesh’s preferential access to its markets, until the country improved its safety standards.
This is just the most recent eruption of a longstanding debate over whether sweatshop conditions and low labor standards are an inevitable stage of industrial development, and, if not, how much developed countries can do to prevent them. Some argue that punitive actions will scare away risk-averse international capital, and hurt millions of workers for whom a dangerous job is better than no job. Most recently, Bangladesh’s Commerce Secretary Mahbub Ahmed expressed this view after the Rana tragedy, arguing that “if the EU or any other buyers impose any harsh trade conditions on Bangladesh it will hurt the country’s economy…millions of workers will lose their jobs.”
Fortunately, there is evidence that this is a false choice. International efforts have shown that there is a third way of cooperative, collaborative enforcement that brings all of the stakeholders together to achieve better labor standards – without the disruptions and job losses of economic sanctions. In fact, is becoming increasingly clear that ignoring labor and safety standards will only backfire for businesses, as social media and socially conscious consumers raise the public pressure on companies to follow ethical practices.
The case of Cambodia, another country dependent on its garment industry, offers an instructive comparison. There, the ILO brought together the Cambodian government, the country’s labor unions, and the private sector Garment Manufacturers Association to create a system for monitoring the sector’s labor standards in exchange for tariff-free access to the US market. It’s a program modeled on the structure of the ILO itself, which is an organization equally divided between labor groups, governments, and business. As a result, while not perfect, the Cambodian garment sector has been largely free of the kind of disasters and abuses that have plagued Bangladesh.
One of the lessons from Cambodia is that private sector engagement is crucial, and in Bangladesh many companies have recognized that the status quo cannot continue. Dozens of European companies – including the world’s two biggest fashion retailers, Inditex and Hennes & Mauritz, as well as Swedish company H&M, which is the largest buyer of apparel from Bangladesh – have signed onto the Accord on Factory and Building Safety in Bangladesh, a pact between business, government and labor to improve safety standards. Unfortunately, most major US companies have largely rejected the Accord, arguing that it would be too expensive and open them up to burdensome litigation. Among these retailers are Wal-Mart and Gap – huge operations whose market share would be of immense value in convincing the Bangladeshi government and local business to attack the problem energetically.
American companies should take to heart the lessons that their European counterparts have already learned: that their long-term economic sustainability, as well as their reputations among their customers, depends on decent and safe working conditions for the workers at the base of their supply chains. Signing onto the accord would be a good first step towards moving away from an ad hoc approach – simply responding to each disaster after the fact while leaving the underlying dynamics in place – and towards a coordinated global response.