Global judgements and ideas.

Shopping and ethics: Shall the twain ever meet?

p.moore at

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Bangladesh enjoys the position of second in the world for clothing exports, pays garment workers less than any other country, and holds enormous orders with most of the top brands and retailers. The garment industry accounts for 4/5 of the country’s exports and employs 4 million people, 80 per cent of whom are women. The fact that some of the clothes on the shelves of such reputable shops as Marks & Spencer, Carrefour, and Next might be stitched together under a crumbling roof by people being paid less than 30 cents an hour was not one that customers recognised very often. The idea of a lovely pair of summer trousers costing less than 5 dollars, given the economic crisis and rising unemployment that put a strain on many people’s purses in most countries, was increasingly attractive.

A number of trade agreements had been established to help Bangladesh ‘catch up’ with the rest as many less developed countries offered cheap labour and tax breaks leading potentially to unfair competition. These agreements include Everything but Arms whereby imports to the EU are not charged duties nor restricted in quota, and the dismantling of the Multifibre Arrangement which had restricted imports from developing to developed countries until 2005. The Arrangement had not restricted the least developing nations, including Bangladesh, and even after its removal Bangladesh’s exports increased year on year. While several Clean Clothes campaigns had been run and such groups as the United Food and Commercial Workers worked tirelessly to shine a spotlight on poor working conditions, and despite a number of warning signs including a devastating fire that broke out in Tazreen Fashion factory near Dhaka in November 2012, the race to the bottom was in full force.

A pivotal moment in the industrial history of the developing world happened in April 2013 at the Rana Plaza, a sprawling building housing five garment factories in an industrial suburb of Dhaka, which is Bangladesh’s bustling capital city. On the 23rd April 2013, inspection teams had reported cracks and building faults found in the structure of Rana Plaza. As a result of the report, a series of businesses on lower floors in the building were promptly closed. However, upper floor garment factories did not close and employees were called to work. On the 24th April 2013, the building collapsed in the deadliest disaster known to the garment industry. It emerged that the owner of the building, Sohel Rana had allowed the use of substandard bricks, rods, and cement, and either failed to obtain clearances around building codes or gained unsubstantiated approvals from the mayor. 1,129 people died.

Meanwhile, despite the economic crisis, companies whose products were being made in Bangladesh were growing exponentially. Wal-Mart’s gross income increased from 97.03 billion in 2009 to 116.67 billion in 2013. The Gap indicated that its sales increased by 8 per cent February 2012 – February 2013, with 15.7 billion dollars net sales, an increase of 6.4 per cent from 14.7 billion. Bigger is better, the assumption rests, and a hyper-capitalist drive toward growth still dominates the agenda and an international broadcast of hundreds and thousands of workers’ deaths seems to be the only thing that can kick start companies’ actions.

The 24th April disaster instantly hit international news and caused significant controversy. A BBC reporter interviewed shoppers in a busy retail district in London on the 25th April asking people whether they knew where their clothes were manufactured and what their thoughts were on the devastation (BBC News Asia online 25/04/13 ‘Are clothes shoppers concerned about Bangladesh?’). Many participants stated that they believed their clothing was made in China or India. One stated that he ‘liked to not know’ and two women stated ‘no’ when asked this question. One woman expressed that she did not think one person could stop what is happening, although she is aware of it. Another stated that ‘it is sad, but we do not to think about it’ followed with ‘because it is cheap’. Two respondents were very informed about the situation in Bangladesh and one stated ‘I would be willing to pay more for something that I know is coming from a good source… that should be the common attitude’. A young woman expressed ‘I don’t think it comes into our conscience that much… it’s more of a mindless buying thing, you see something you like, you buy it’. While shoppers in the developed world have enjoyed low cost clothing for several years, is ‘just not thinking’ about the conditions of workers in export processing zones when searching for a bargain on the high street is not going to be as easy.

Will anything change? The BBC interviewee who stated that just one person cannot stop the problem is correct. Responsibility lies at all nodes of the global supply chain but I would argue lies most importantly with companies who need to take responsibility for monitoring and enforcing compliance of  codes of conduct that are far too often simply left to suppliers’ volunteerism. The traditional compliance model has not worked and a new method of information gathering is needed. There has been little incentive to monitor and ensure labour and building standards are established when buyers place quotas and time limits on orders and leave the details of execution to factory managers.

Soon after the Rana Plaza incident, a stark realisation for the need to regulate production occurred, and groupings of companies from Europe, and from North America have scribed two separate agreements for how workers will be protected. The largely European Bangladesh Safety Accord was published on the 13th May and has been agreed by German Tchibo Benetton, Swedish H&M, Dutch C&A, the UK’s Tesco, Marks and Spencers and Primark, Canadian Loblaw, Spain’s Inditex (owner of Zara) and PVH (Calvin Klein, Izod, Tommy Hilfiger). Signatories to the agreement commit to establishing a fire and building safety programme over five years, building on the National Action Plan on Fire Safety (NAP) and are required to develop an Implementation Plan within 45 days of signing the Accord. Financing and implementing the Accord is largely the responsibility of companies and require at minimum, safety inspections of not less than 30 per cent of each signatory company’s annual production in Bangladesh by volume (Tier 1 factories); inspection and remediation at any remaining major or long term suppliers to each company (Tier 2, aggregated not less than 65 per cent of signatory’s production in Bangladesh); and inspections identifying high risks at facilities with less regular or one time orders where production by volume is less than 10 per cent (Tier 2). So, all factories must be inspected and remediated and oversight and funding is provided by companies themselves, who are also liable in this process. Signatories of the Accord are under obligation to require suppliers to accept inspections as well as implement remediation measures in all of their factories and to ‘appoint a Steering Committee with equal representation chosen by the trade union signatories and company signatories… and a representative from and chosen by the International Labour Organisation as a neutral chair’. The Accord involves the Bangladeshi Ministry of Labour in its High Level Tripartite Committee, demonstrating interest in cooperating and working with the existing local institutions. Companies are required to halt production relations with factories that do not make required remediations.

A group of North American companies who also source Bangladesh were invited to, but did not sign the Accord. Rather, a separate agreement was formed. The key differences are that companies are not as liable to production reforms and unions and international organisations do not play a central role as are all the case for the European Accord. Buyers who form the Alliance of Bangladesh Worker Safety, Inc., a non-profit organisation launched on 10/07/13, include Presidents, Chairmen and Chief Executive Officers from Wal- Mart, the Canadian Tire Corporation, The Children’s Place, Gap Inc., Hudson’s Bay, IFG Corp, J.C. Penney, The Jones Group Inc., Kohl’s Department Stores, L.L. Bean Inc., Macy’s, Nordstrom Inc., Public Clothing Company, Sears Holdings Corporation, Target Corporation, V.F. Corporation, and Wal-Mart Stores, Inc. The Associations listed as affiliates in the Bangladesh Worker Safety Alliance Action Plan Package are American Apparel and Footwear, the Canadian Apparel Federation, National Retail Federation, Retail Council of Canada, Retail Industry Leaders Association,  and the US Association of Importers of Textiles and Apparel.

On 10/07/2013, former Senators George J. Mitchell and Olympia Snowe met with Shamarukh Mohiuddin, Executive Director of the US Bangladesh Advisory Council, and a series of stakeholders including Bobbi Stilton, Senior Vice President (Global Responsibility) and President of Gap Foundation, Gap Inc.; Daniel Duty, Vice President Global Affairs Target Corporation; Thomas Nelson, Vice President of VF Corporation; and Jay Jorgensen, Senior Vice President of Wal-Mart at the Bipartisan Policy Centre in Washington DC (streamed live). Speakers emphasised the similarities between the Alliance and the European Accord, stating that the funds allocated, workers’ empowerment and health and safety standards imposed will create a better environment for factory workers. This Alliance requires partners to conduct safety inspections and to halt production at unsatisfactory sites, but labour critics have criticised the agreements for stopping short of liability and not requiring underwriting of improvements. The Alliance does not place trade unions nor established international systems of governance front and centre of its memorandum in the way the Accord does, a point also picked up by journalists in the press conference that followed speakers’ words. Rather than unions, the Alliance requires Worker Participation Committees to be set up with elected members and to be membered by at least 50 per cent of workers in respective factories. A hotline will be set up so that workers can report safety hazards. And ultimately, the Alliance’s Worker Safety Statement of Purpose indicates that members ‘recognise that ultimate responsibility for the industry and the safety of its workers rests with the nation of Bangladesh and the factory owners themselves’.

In conclusion, the recent devastation in Bangladesh and the lack of a consensus in how to prevent this from happening again is a reminder that global capitalism is not a fait accompli, but probably requires more losers than winners to function. The ‘free’ market would not survive if those profiting the most from it were not willing to turn a blind eye to the unfreedoms that have recently been revealed through production failures and what is now at the level of life and death for workers in the worst working conditions in the world. The fact that it requires the deaths of thousands of victims in badly managed and maintained factories in the developing world for the developed world to take action is a sign that there is little intention to bridge the divide between the rich and poor nations. Perhaps it is up to ourselves as well as states and business to think carefully next time we approach the five pound clothes rack and to think, can we be ethical in shopping under capitalist conditions of accumulation, or is it the case that never the twain shall meet?


One comment on “Shopping and ethics: Shall the twain ever meet?

  1. Pingback: The Rana Plaza Tragedy and the global implications. | ipemdx2014

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