Three years after Rana Plaza – Bangladesh’s garment sector still unsafe

by Dorothée Baumann-Pauly, NYU Stern Center for Business and Human Rights
Friday, 22 April 2016 11:15 GMT

A relative of a garment worker, who went missing in the Rana Plaza collapse, mourns as she waits for a mass prayer on the first year anniversary of the accident, at a school in Savar April 24, 2014. REUTERS/Andrew Biraj

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Three years on, labor rights enforcement failures remain widespread, and Bangladesh is far from achieving a safe and sustainable garment sector

By Dorothée Baumann-Pauly

After the deadly April 2013 collapse of the Rana Plaza factory complex on the outskirts of Dhaka, Bangladesh, left almost 1,200 garment workers dead, more than 200 North American and European brands and retailers committed to make Bangladesh’s garment sector safe and sustainable. The collective commitment of up to $100 million to improve factory safety over the next five years came in the form of two separate international agreements, the Bangladesh Accord on Fire and Building Safety and the Alliance for Bangladesh Worker Safety. These initiatives signaled a sea change in corporate responses to rights issues by acknowledging that chronic human rights problems in global supply chains require coordinated efforts from the entire industry as well as other stakeholders, including governments and international lenders.

But three years later, labor rights enforcement failures remain widespread, and Bangladesh is far from achieving the declared objective of a safe and sustainable garment sector.

As the NYU Stern Center for Business and Human Rights’ recent yearlong research report revealed, there are more than 7,000 garment factories in Bangladesh producing for the global fashion industry, 65% more than previous estimates. More than half of these factories are small and medium-sized indirect sourcing factories, meaning their workers produce for foreign brands through other, larger factories. These factories operate in the shadows. The result is that millions of workers in subcontracting factories fall outside the protection of the Accord and the Alliance, and are especially vulnerable in a country where unsafe working conditions are a chronic problem. 

Because the initiatives are narrowly focused on a subset of direct exporters, their protections encompass only 27 percent of factories in Bangladesh. Almost three million garment workers are excluded from these programs. Despite the five-year commitments made three years ago, only a handful of factories have been fixed.

In terms of the status of safety measures being implemented, according to the Accord and the Alliance’s own reporting, the actual remediation of factory safety issues is proceeding at a very slow rate and the implementation of the majority of corrective action plans is running behind schedule. In 2014, both initiatives completed the inspection phase of all factories in their databases. But as we recently determined, their databases are woefully incomplete, jointly covering less than 2,000 factories. The Accord alone had at that point identified more than 80,000 safety violations. Remedying all of these issues posed a monumental task.

To date, the Accord has fully completed just seven corrective action plans, and the Alliance, 24 – representing less than half a percent of Bangladesh’s total factory base.

Remediation rates hinge upon resources, and while factory owners bear significant responsibility, they seem to be unable and/or unwilling to bear all the costs alone. Multinational buyers have been reluctant to share the financial burden and have mobilized other sources of funding from the International Finance Corporation and other institutions. Despite significant international commitments totaling $250 million to improve safety in Bangladesh’s garment sector, at this point, these funds are not reaching the manufacturers, and it remains to be seen whether the necessary investments will materialize.

It is time for a model of shared responsibility, where brands, governments, financial institutions and philanthropies jointly define a funding formula that is practical, transparent, accepted, and then implemented by all stakeholders.

The vast problem remains that only a fraction of garment factories are even covered by protections currently intended to be in place. The use of subcontracting in the garment industry is pervasive. According to our research estimates, more than 30 percent of garment producing facilities in Bangladesh are producing off the radar and without government or private oversight. Workers in these often smaller facilities therefore remain unprotected and invisible to regulators. It is essential that we increase supply chain transparency in order to be able to bring all garment producing facilities under appropriate safety programs.

The private agreements established in the aftermath of Rana Plaza are scheduled to wrap up their work in just two years. Given the current status of the process, the likelihood that these initiatives will successfully complete their remediation by the deadline seems small. In December, Bangladesh’s commerce minister said that the government will not extend the operations tenure of either the Accord or the Alliance because “Bangladesh is now a safe place.”

Both public and private actors in Bangladesh have made immense efforts to address factory safety issues, but we will not see success anytime soon until the urgent issues of finance and the lack of factory and worker coverage by the current initiatives in place are addressed. 

Dorothée Baumann-Pauly is Research Director at the NYU Stern Center for Business and Human Rights and is co-author of the Center's two reports on labor rights in the garment industry in Bangladesh, 'Business as Usual is Not an Option: Supply Chains and Sourcing after Rana Plaza' and 'Beyond the Tip of the Iceberg: Bangladesh’s forgotten apparel workers'.