The Crisis in Bangladesh
and the Accord on Fire and
Building Safety
May 28, 2013
Building Collapse in Bangladesh
• Garment factory producing for major Western
retailers
• Poorly constructed building, located on a drained
swamp, with additional floors added illegally
• Workers notice cracks in walls, express fear to
management
• Management tells workers building is safe and
they must work
• The next day, the building collapses, crushing
workers en masse
• Some escape, many die. Rescue workers pull
bodies out of the rubble for days
Spectrum Sweater Factory - 2006
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•
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Massive building collapse
64 dead
Hundreds injured
Major buyer: Inditex
Retailers, factory owners, government all vow to move
urgently to improve safety practices
• Nothing changes: industry continues down the road to Rana
Plaza
A horrific rash of events for garment
workers in Bangladesh…factory collapse,
explosion and fires... The Bangladesh
garment industry is notoriously stricken
with labor violations, but the recent
tragedies have incited international
pressure and investigations…”
Yahoo News, 2006
Major Bangladesh Factory
Disasters: 2005/2006
Moon Fashion
Biswas Garment
Shan Knitting
Phoenix Garment
Shamim Spinning
Sayem Fashions
Spectrum Sweater
Fire
Fire
Fire
Collapse
Fire
Stampede
Collapse
Cumulative Death Toll: 205
Response to Spectrum and other disasters
Inditex: “Although the factories of the suppliers in Bangladesh were
being audited when the catastrophe occurred, Spectrum was not
included in the review-normalization process for two reasons: first, the
contractual manufacture relationship had taken place through a trader
in India, and secondly the supplier did not provide the name of its
subcontractors.”
“The audit of the Asian manufacturers, carried out in accordance with
BSCI methodology and by SAI-certified auditors, is in progress and is
expected to be complete by the end of May.”
BGMEA/Government/ILO : “In February 2006, BGMEA began a
programme of factory inspections to ensure there are fire exits, no
locked exits, and to conduct fire drills. Since March 2006 BGMEA has
recruited 20 staff in addition to the existing 20 to carry out these
inspections. 1042 factories in Dhaka and 253 in Chittagong have been
inspected in April 2006.”
After the Gharib & Gharib fire:
February 2010
“The teams will make surprise visits and immediately inform
BGMEA if they find any factory lacking adequate safety
measures…BGMEA and BKMEA will take actions against the noncompliant factories…all garment factories must keep their
rooftops accessible; the rooftop doors, factory entrances, fire
escapes, and emergency gates must always remain unlocked;
fabrics and other flammable materials cannot be kept laying
around on factory floors; and all factories must arrange fire drills
on a regular basis.”
After the Hameem fire:
December 2010
Unions, NGOs convene meeting in Dhaka, April 2011, and
implore brands and retailers to commit to an urgent program of
independent inspections and to pay for renovations are repairs.
Industry response, as conveyed by Walmart and Gap:
“Specifically to the issue of any corrections on electrical and fire
safety, we are talking about 4,500 factories, and in most cases
very extensive and costly modifications would need to be
undertaken…It is not financially feasible for the brands to make
such investments.”
Death Toll in Garment Factory
Disasters Since 2010
Year
2010
2010
2012
2012
2013
2013
2013
Factory
Gharib & Gharib
Hameem/TIS
Ali Enterprises
Tazreen Fashions
Smart Export
Rana Plaza
Tung Hai
Brand
H&M
Gap, Target, VF, PVH, others
KiK
Walmart, Sears, ECI, others
Inditex/Zara
Benetton, WM, JC Penney, others
Primark
Total Deaths:
Deaths
21
29
262
112
8
1,127
8
1,601
Rana Plaza
• Five factories, owned by three companies: Ether Tex, New
Wave Style, Phantom Apparel
• Buyers: Walmart, El Corte Ingles, Benetton, Inditex, JC Penney,
Children’s Place, Carrefour, Primark, Joe Fresh, KiK, others
• Obvious warning signs of structural failure; workers pressured
to work anyway; threatened with loss of one month’s pay
• Final toll: 1,127 dead; more than 2,000 injured, including
many on-site amputations
• Worst factory disaster in the history of the global garment
industry
• Three of the four worst have occurred in the last eight months
Rana Plaza
Tazreen
Fashions
Triangle
Shirtwaist
Triangle Shirtwaist to Rana Plaza
• Apparel sector in the Early 20th century: sub-poverty wages,
minimal regulation, abusive conditions, dangerous factories
• 1911: Public revulsion over Triangle disaster spurs reform
• 1910s to 1930s: Unions and regulators progressively reform
the US apparel sector: decent wages, unions, safe workplaces,
reasonably tough regulation; “golden age” for apparel workers
through 1960s
• 1970s to 2000s: Brands and retailers outsource most US
apparel production to the Global South
• Apparel sector in the early 21st century: sub-poverty wages,
minimal regulation, abusive conditions, dangerous factories
Contemporary Apparel Production:
The Model
• Brands and retailers place relentless price and delivery
pressure on local contractors
• Local contractors meet these demands by ignoring worker
rights and safety standards to cut costs, speed production
• Local government looks the other way; industry auditors are
ineffectual
• Result: poverty wages, oppressive conditions, dangerous
factories
• Not a “Bangladesh problem,” but a problem of the global
apparel industry
• The problem manifests itself in a particularly destructive way
in Bangladesh, because local regulation is especially lax and
most factories are in multi-story buildings.
Bangladesh Garment Industry:
Thousands of Deathtraps
• Many poorly constructed buildings with weak
foundations; floors added illegally after original
construction
• Most factories lack proper fire exists:
• Open stairwells, which act as chimneys rather than
escape routes
• No external fire escapes
• Missing safety systems
• No emergency lighting
• Missing fire extinguishers
• No worker role in safety management, no unions, weak
or no safety training
• Managers restrict egress: lock doors to control workers;
delay exit to avoid loss of production, hoping
alarms are false
Lethal Partnership: The Global
Apparel Brands and Bangladesh
• Conditions:
• Minimum wage: $37/months (18 cents an hour)
• Routine harassment and intimidation as management strategy to
speed production
• Unionists are fired – or worse
• Most dangerous place in the world to be an apparel worker
• The industry’s response to deteriorating labor conditions in
recent years? They have poured orders into the country.
• Bangladesh now 2nd largest apparel producer after China
• 5,000 factories; 3 million workers (far more than US peak)
• More than 2,000 killed in fires and collapses since 2005
• Buyers are getting what they pay for: an industry of Triangle
Shirtwaist factories
• Bangladesh is winning the race to bottom, with room
to spare
The Bankruptcy of Industry Auditing
and the Voluntary “CSR” Model
• All factories where major disasters have occurred had been
repeatedly audited under industry audit regimes
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Ali Enterprises, 262 dead: SA-8000 certified – 3 weeks before fire
Tazreen, 112 dead: Audited by WM (UL Responsible Sourcing), others
Hameem/TIS, 29 dead: Audited by Gap, A&F, VF, others
Gharib & Gharib, 21 dead: Audited by H&M
Rana Plaza, 1,127 dead: Passed audits by BSCI, multiple buyer audits
• Industry auditing: massive conflicts of interest, no transparency
• Industry auditors don’t have expertise/time for proper inspections: no
fire safety training, no electrical or structural expertise
• Industry auditors do not even look at biggest hazards
• No assessment of emergency exit structures, despite deadly fires
• No assessment of structural integrity, even after Spectrum
• Auditors can’t ask brands to raise prices, pay for repairs
• BSCI: “You can’t expect too much from social audits.” Yet brands have
claimed for years that audits are adequate to protect workers.
"It's very important not to expect too much
from the social audit…BSCI and other
initiatives contribute to improve the
situation. ... But it's a long way we have to
go.“
Lorenz Berzau
Managing Director
Business Social Compliance Initiative
(Two Rana Plaza factories passed
BSCI audits)
Walmart: Don’t Worry – Workers Are
Protected by Our Incompetent Inspections
Walmart’s CEO, Mike Duke, in a public statement:
“We will not buy from an unsafe factory.”
Walmart’s head of labor rights compliance, in an
internal memo: “Fire and electrical safety are not
currently adequately covered in ethical sourcing
audits.”
What is needed?
• A radical shift away from voluntary self-regulation
to binding labor-management agreements
• Not just inspections – industry-wide program of
renovations and retro-fitting to make unsafe
structures safe
• Many factories can’t pay: progress can’t be
achieved without financial support from buyers
• Buyers must accept that safe factories cost more
• Renovation program must be backed up by
inspections with public reports
• Workers must be able to fight for their own
protection
Development of the Accord
• Dec. 2010
• Apr. 2011
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WRC, CCC, others propose plan after TIS fire kills 29
Plan promoted at ITG- led meeting in Dhaka;
brands reject financial responsibility for
safety upgrades
Mar. 2012
PVH signs agreement after ABC News story
Apr-Sep 2012 Unsuccessful negotiation with Gap, which
refuses any binding safety commitments
Sep. 2012
German retailer Tchibo signs agreement
Nov. 2012
Tazreen Fashions fire kills 112
Jan. 2013
Smart Export fire kills 8
Apr. 2013
Rana Plaza collapse kills 1,127
May 2013
Tung Hai fire kills 8
May 2013
40 brands and retailers sign revised safety
agreement, renamed Accord on Fire and Building
Safety in Bangladesh
June 2013
Implementation begins
Why is it a huge challenge to
get companies to sign?
• Because the agreement is real, not the usual nonbinding, feel-good CSR fluff
• Binding, enforceable and transparent
• Companies must pay for repairs and renovations
• Companies must end business with factories that
refuse to undergo renovations and operate safely
• Companies must stay at least two years at safe
factories
• Imposes higher costs and constrains sourcing
decisions, blunting the relentless push for lower
prices and faster delivery that define industry
sourcing strategy
Strategy Post-Rana
• Seizing the media moment to secure enforceable
commitments
• Out-maneuvering the industry and its apologists
and protectors
How Accord was achieved…
• Linking specific brands and retailers to recent disasters;
proving these connections with documents and labels found
on-site
• Focusing media attention on individual brand responsibility,
the total failure of industry CSR programs to protect workers,
and the small cost of saving lives (less than 10 cents per
garment)
• Holding firm on the need for a binding, enforceable
agreement with financial commitments from brands/retailers
• Contributions from numerous key players: Clean Clothes
Campaign, UFCW, Machinists, Steelworkers, AFL-CIO, Change
to Win, SEIU/Workers United, ILRF, Maquila Solidarity
Network, Avaaz, SumOfUs, USAS, Corporate Action Network
• Crucial leadership of Industriall and UNI
The Accord: Unprecedented
Commitments
• Thorough, independent inspections with full
public reports
• Brands/retailers must require factories to undergo
all necessary renovations and must pay for them
• Brands/retailers must end business relationship
with any factory that refuses
• Brands/retailers must make 2-year commitment to
safe factories
• Central role for workers and unions: union access,
OHS committees, right to refuse dangerous work
• All commitments binding and enforceable
Unprecedented
The first binding agreement ever signed by global
corporations that forces them to pay to improve
working conditions and to align their sourcing
decisions with their labor rights obligations
Signatory Brands and Retailers
40 signatory companies, from 13 countries
• H&M – largest producer in Bangladesh
• Inditex – world’s largest fashion retailer
• Carrefour – world’s 2nd largest general retailer
• Most major apparel retailers in W. Europe
• North America: PVH/A&F/Loblaw
Gaps:
• Gap, VF
• Walmart, Target
• JC Penney, Macy’s, Kohl’s
Signatories represent:
• At least 1,500 factories and 1 million workers
Implementation
• Implementation plan in 45 days
• 12-member planning committee
focused on swift implementation
• First priority: inspections and
renovations to mitigate most serious
widespread hazards
The road ahead.
• Accord implementation: A huge undertaking
• Goal to get repairs/renovations started in 3
months or less – immediate focus on swift
mitigation of the gravest hazards
• Binding nature of Accord gives us the tools to
ensure compliance, but there will be many
battles
• Effort to bring on additional US retailers must be
strengthened – will get boost from public
inspection reports
A new model for labor rights
reform in global supply chains
• 1980s to 1990s: No private regulation
• 1990s to 2010s: Self-regulation: the “CSR” Era
• Voluntary corporate initiatives
• Non-binding, minimal transparency
• No obligations on prices or supply chain practices
• 2013 to?: Regulation thru enforceable pacts
• Accountability to worker organizations through
binding, enforceable agreements
• Supply chain practices aligned with labor rights
obligations, including higher prices to factories or
other means of paying for improved conditions
• Full transparency