Responsibility – following the Rana Plaza disaster 

"In the meantime, much has been learned about security issues, but the treatment of workers, especially women, is still looking bad", says a textile worker six years after the Rana Plaza disaster. On 24 April 2013, the eight-storey factory near the capital Dhaka in Bangladesh collapsed, burying 1,134 people. In a collaborative effort, an international and interdisciplinary project alliance spent three years investigating how occupational safety and labor conditions in the country's clothing industry have changed since then and the regulatory approaches being pursued by politics, society and employers.

Importing companies have understood that they must be more careful about who they buy from.

Under the leadership of Elke Schüßler, Professor of Business Administration at the University of Linz (previously FU Berlin), five teams of researchers took a close look at the long supply chain – starting with the workers and managers employed at the textile factories in Bangladesh and extending to the brands and trading companies in Sweden, Great Britain, Germany and Australia. They also analyzed the local social environments and held talks with non-governmental organizations, trade unions, politicians and investors: "This gave us a comprehensive picture of how the political and social levels in the five countries – including Bangladesh – reacted to Rana Plaza," says Elke Schüßler.

Rana Plaza, Bilder des Unglücksortes
The eight-story Rana Plaza building in Sabhar, Bangladesh housed several textile factories. When it collapsed on April 24, 2013, more than 1,000 people were killed - the worst accident to date in the international textile industry. (Foto: Bayazid Akter – Shutterstock.com)

..."a certain degree of rethinking" 

The main result of the "Garment Supply Chain Government" project is that Rana Plaza has brought about "a certain degree of rethinking" on the part of the importing companies: "They have understood that they must be more careful about who they buy from," says Elke Schüßler. The researchers surveyed the senior staff responsible for purchasing or ‘corporate responsibility' at 79 retail companies and brands. It was found that since the accident, many companies have been looking for ways beyond auditing to ensure greater transparency, more stable supplier relationships and higher standards of work safety in garment factories. However, significant differences remain.

In contrast to Germany and Sweden, for example, importers in Great Britain and Australia are making greater efforts to publish data on their suppliers and local production conditions. In all countries, though, only a few companies are trying to stop the downward spiral towards worsening labor conditions through collective action and closer cooperation with trade unions – so far with limited success. Apart from moral appeals, there are currently only isolated attempts to ensure greater sustainability in this area, the researchers note.
 

Promoting safety culture as a competitive advantage?

Some notable exceptions are the Accord of Fire and Building Safety for Bangladesh, which 56 percent of all companies surveyed have signed, the US Alliance for Occupational Safety in Bangladesh, and the global ‘ACT' agreement for living wages in the garment and textile sector. Moreover, the study shows that most companies have at least realized that they should seek to directly cooperate with producers over the longer term and reduce dependency on intermediaries.

... we have the safest garment industry in the world.

In a management survey of around 150 export-oriented factories, 80 percent spoke of a "new safety culture" after Rana Plaza. "This was a lesson to us. ‘Accord' and ‘Alliance' showed us how to improve and maintain certain standards," said one manager. Another described signing the new international agreements as a competitive advantage: "Because we Bangladeshi manufacturers can now say that we have the safest garment industry in the world."

However, it seems that especially small to medium-sized factories can hardly afford to implement the necessary safety measures within the time given. The producers criticize that they alone would have to bear the costs incurred by refurbishment or moving to more suitable factory buildings, and demand that responsibility for this be shared by the brands and retail chains. Otherwise, the researchers also warn, the high financial burden could trigger a process of concentration within the export-oriented industry, displacing small and medium-sized manufacturers. This is because factories remain under strong pressure to produce quickly and at low prices.
 

People dressed in colorful clothes
Garments workers in Shaka, Bangladesch (Foto: Sk Hasan Ali – shutterstock.com)

Producers and distributors both under pressure

Another result of the study is that brands and retail companies in the West find themselves facing the same dilemma as the producers. They, too, typically have profit margins of less than five percent and are forced by competitive market conditions to bring ready-made fashion garments onto the market ever faster and at ever lower prices. They simply pass this pressure on to the factories. "Even with the best will in the world, there is little room for higher wages or investment in better labor conditions," says a company spokesman. There are thus increasing calls for state regulation, for example in the form of a law to enforce due diligence on human rights. This will be the only way to create fair competitive conditions.

Workers are more often given written contracts ...

Despite all the existing problems, from the workers' point of view there have been some positive changes following the Rana Plaza tragedy. The professor of International Development and Gender Studies at the London School of Economics and Political Science, Naila Kabeer, and her team interviewed about 1,500 workers from 250 factories in and around Dhaka, two thirds of them women. In their perception, health and safety conditions have improved significantly since 2013.

According to the so-called worker participation committees that have meanwhile been created, several other things have also changed for the better: "Workers are more often given written contracts, a permanent job – and wages and overtime are paid more punctually." This is particularly noticeable in those factories that have joined the ‘Accord' or the ‘Alliance'.

More binding standards

The study therefore recommends that collective, legally binding governance structures such as the ‘Accord' continue to be established and that trade unions be systematically involved. For only if a critical mass of companies commits to certain standards will there be any perceptible effect. However, as the ‘ACT' initiative for living wages shows, it seems difficult to get a sufficient number of companies interested in such initiatives without the media attention following an accident like Rana Plaza.

On the other hand, collective governance initiatives could also further increase the existing power gap between buyers and producers. If, for example, Western companies have insight into the internal production processes of their suppliers, they could join forces to push prices down even further. Here, too, the possibilities for self-regulation by companies are clearly limited.

It's up to all of us ... to hold business and politics to account.

The workers do feel better informed about their rights since Rana Plaza, says Naila Kabeer. "However, they are not satisfied with their wages, which are not high enough to cover the rising cost of living, and they complain about involuntary overtime and mistreatment by management." 80 percent of respondents reported being shouted at, insulted and threatened at least once a month, and occasionally beaten if they arrive late for work or fail to meet production schedules. "Before Rana Plaza, there was not so much pressure at work and therefore less shouting around. Now it's the other way around," says one worker. "The number of auxiliary staff has dropped, wages remain low, and there is excessive work pressure."

The business model of the garment sector has not changed after the collapse of Rana Plaza, as Elke Schüßler regrets. "As long as vast quantities of ready-made garments continue to be produced at throwaway prices, it will remain difficult to achieve significantly higher standards," the project leader criticizes. Ethically produced fashion does exist, but in terms of numbers it is an absolute niche market. "Of course it's good to see that the investment in safer buildings in Bangladesh is likely to avoid something like Rana Plaza happening again. However, continuation of the Accord in its present form has been opposed by the Bangladeshi government. Its successor is controversial and remains limited to the issue of building safety." This development is not untypical, she says: "Once the attention surrounding a disaster like Rana Plaza has faded, everyone goes back to business as usual. It's up to all of us not to let the memory fade and to hold business and politics to account", says Elke Schüßler.

Project background

The project "Changes in the Governance of Garment Global Production Networks: Lead Firm, Supplier and Institutional Responses to the Rana Plaza Disaster" was funded within the (meanwhile terminated) initiative "Europe and Global Challenges". The international project team included researchers from Great Britain, Bangladesh, Australia, Sweden and Germany.

More about the project and its results (incl. "Final Stakeholder Report", September 2019) at "Garment Supply Chain Government Project".