The Scary Reality Behind Bangladeshi Garment Factories

Photo: Courtesy of Nayantara Banerjee/NYU Stern Center for Business and Human Rights.
A supervisor walks the production line at a large direct exporting factory in Mymensingh, Bangladesh, December 2014.
Two-and-a-half years after the harrowing April 2013 Rana Plaza collapse in Bangladesh, which killed over 1,100 garment factory workers and injured around 2,500, how much have conditions and employee safety measures really improved? Not nearly enough, according to a new report from the NYU Stern Center for Business and Human Rights, released today. It includes research compiled via on-the-ground surveys as well as analysis of public data about Bangladeshi factories and the rampant labor issues that exist there.

The report found that there are over 7,000 garment factories in Bangladesh — 65% more factories than previous estimates indicated, which pegged the number at closer to 4,500. That's quite a discrepancy, and it reveals some major issues with the transparency (or lack thereof) in fashion manufacturing.

“Brands define their supply chains in terms of first-tier suppliers, and brands say they have strict policies against subcontracting beyond the first tier, which discourages their primary suppliers from being transparent about where production is actually taking place,” Sarah Labowitz, co-director of the NYU Stern Center for Business and Human Rights and co-author of the report, told Refinery29. “The model — large quantities of very cheap clothes — isn't possible without subcontracting.” Therefore, the substantially higher new factory count takes into account these subcontractor factories that “operate in the shadows,” according to a release about the report, as opposed to only tabulating first-tier suppliers.
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Photo: Courtesy of Nayantara Banerjee/NYU Stern Center for Business and Human Rights.
Unused equipment in a garment factory in Dhaka, December 2014. Indirect suppliers are vital to Bangladesh’s ability to respond to fluctuating demand. When orders are down, factories like this one may close a few production lines or shut down altogether. When orders go back up, the lines reopen. This allows large, direct exporters with much higher operating costs to flexibly expand capacity through subcontracts without making expensive capital investments.
Another sobering finding from the report: More half of the 7,000-plus Bangladeshi factories currently in operation are, in fact, used for subcontracted or indirect sourcing. That means almost 3,000,000 workers at these factories are not protected by the two large-scale labor safety initiatives involving major European and North American fashion brands that emerged post-Rana Plaza, the Accord and the Alliance. Efforts to improve worker safety have been funded by over $280 million in globally sourced support, so that’s a pretty staggering number of workers who are not benefitting from money meant to reform Bangladesh’s garment industry. The report also found that of 3,425 factories inspected, only eight factories have sufficiently fixed violation issues after the Rana Plaza catastrophe in order to pass inspection.

Although the report didn’t look at or reveal names of specific retailers or labels using these subcontracted factories, much of your closet may well be produced via indirectly sourced labor: “Our research indicates that subcontracting is a routine feature of most, if not all, fashion brands' supply chains,” Labowitz said.

So what should happen next, based on this report? “Brands need to acknowledge the full scale of the supply chain, account for the true cost of production, and create space where more transparency is possible about subcontracting,” Labowitz said. “Leaders within Bangladesh can be the catalyst for a shared responsibility approach, where brands together with their primary suppliers, governments, and others develop solutions to make sure that all workers are safe and treated with dignity.”
Photo: Courtesy of Nayantara Banerjee/NYU Stern Center for Business and Human Rights.
Workers eat lunch in the stairwell of a factory in downtown Dhaka, December 2014. The factory is located in a mixed-used building, above an auto body shop, an electronics dealership, and an insurance agency. The factory lacks even basic facilities, such as clean drinking water and bathrooms, or a lunch room.
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