Market Will Shape Conditions in Garment Factories

Published in the National.
Read the original here.

The Rana Plaza factory disaster in Bangladesh on April 24 has stimulated international scrutiny of labour conditions in the apparel industry. Over 1,100 workers – mostly poor women – were crushed to death when the eight-storey building collapsed. Those workers who were rescued and have been released from the hospital, are now without a livelihood and face homelessness and hunger.
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Last year, I was part of a team of researchers commissioned by the Worker Rights Consortium, an independent labour-rights monitoring organisation, to investigate global wage trends for apparel workers. We surveyed leading garment-exporting countries to determine if sweatshop work improved the lives of workers – again, mostly women – from poverty-stricken rural agricultural areas.

We found that the cost of living in these countries had increased more rapidly than workers’ wages, and that the quality of life of sweatshop workers was getting worse. In Bangladesh, for instance, workers earn a mere 14 per cent of a living wage.

A living wage is calculated to include basic necessities for a worker and two children. In Bangladesh this means earning enough to satisfy basic requirements for nutrition, with money left over to buy a house fan, candles for lighting, and three sets of underwear per year. While proponents of sweatshops may argue that these factories provide a way out of poverty, our research suggests that low-wage jobs trap workers in it. And too often, this trap is deadly.

Sadly, the Rana Plaza tragedy is not an isolated incident. Low wages and horrendous working conditions are the hallmark of the contemporary global supply chain. With no global regulatory framework, multinational corporations are able to scour the globe for locations that will allow them to maximise profits by putting pressure on workers to work longer, harder hours for less pay.

The freedom to move contracts from factory to factory encourages a perverse auction in which labour standards are continuously lowered to attract corporate investment. Governments in countries such as Bangladesh must kowtow to the economic power of huge global corporations – Bangladesh’s 2011 GDP was less than one-quarter of Wal-Mart’s revenue – or risk the flight of capital.

Ironically, many corporations that were present in the Rana Plaza factory boast of their “social responsibility”. Wal-Mart’s 2013 Global Responsibility Report describes its protocol for ensuring fire safety and emergency response, lists safety criteria and cites its use of independent third-party contractors to monitor factories.

Scott Nova of the Worker Rights Consortium is critical of this approach. “We are way past the point at which voluntary codes will bring about any change,” he says. Instead, the burden of holding these companies accountable on claims of being “responsible” often falls to consumer groups and non-governmental organisations.

Recently, a coalition of these groups – including the Worker Rights Consortium – developed the Accord on Fire and Building Safety in Bangladesh. This agreement requires signatories to finance and implement programmes to address risks in factories. The accord requires the appointment of a committee with representatives chosen by the corporation and labour unions, and one member determined by the International Labour Organisation. This committee will oversee programmes to monitor and inspect facilities.

While signing the accord is voluntary for corporations, it is a legally binding agreement that stipulates factories have a window of time to meet compliance standards before their contracts are terminated. In the absence of violations, corporations are required to maintain their contracts for the five years of the contract, and any disputes are subject to arbitration in the corporation’s home country.

The Accord on Fire and Building Safety is intended to close gaps in monitoring of the apparel production industry. To date, more than a dozen European retailers have signed the accord. Notably missing from the list of signatories, however, are Wal-Mart and GAP Inc – companies whose primary markets are in the United States.

Wal-Mart insists that it has taken sufficient measures to address risks. The company invested $600,000 (Dh2.2 million) in a contract with LaborVoices, an organisation that provides mobile phones to workers so they can communicate potential harm to the organisation and other workers. GAP, meanwhile, released its own updated fire and building safety plan, of fewer than 100 words, none of them mentioning binding agreements or monitoring agencies. Rather, it promises to “engage” with fire inspectors and the US and Bangladeshi governments.

United Students Against Sweatshops, an organisation that campaigns on behalf of workers worldwide, argues that binding agreements are necessary to prevent further disasters like the Rana Plaza collapse.

By not signing the Accord on Fire and Building Safety, global companies like the GAP and Wal-Mart are making a bet. They are betting that they can continue to conduct business as usual without affecting their bottom lines.

They are betting that consumers will continue to buy their clothing, despite disasters like the one at Rana Plaza.
Ultimately, it will be up to the market to call their bluff.

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