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Who will ensure ethical buying practices of brands and retailers?

The Rana Plaza tragedy led to form legally binding authorities like Accord and Alliance to ensure factory safety. Almost $4billion worth of work order cancellation and suspension during COVID 19 pandemic demands to form such type of legally binding authority to ensure suppliers’ rights to have an ethical business model as brands and retailers cannot exercise unethical purchasing practices. 

Introduction                          

With the outbreak of the COVID-19 pandemic, the cancellation of work orders by global retailers was common to most Bangladeshi apparel suppliers. Holding or canceling work orders left the apparel exporters in severe crisis as they faced cash shortages to pay workers as well as raw materials dues.

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Figure: Organizations like Accord should stand beside manufacturers to protect their rights, and should be about pushing brands to ensure ethical buying practices providing the right prices and taking true responsibility for their workers.

Manufacturers want true partnership from the brands and retailers, also demand a win-win business model to secure their business and workers’ rights. The recent move of the Accord Foundation has brought the demand for a win-win business model before the industry people, as Accord always talks about their control over the Readymade Garments (RMG) industry in the name of factory safety whereas there are so many issues to focus in the supply chain to ensure real workers’ wellbeing.

Why ensuring a true partnership is vital 

At least 1931 brands have either delayed, put on hold, or straight-up canceled their orders since the onset of COVID-19, according to the Bangladesh Garment Manufacturers and Exporters Association data provided last year. The total value of these orders was around $3.7 billion.

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About 470 of the buyers are from the US and approximately 280 others from the UK. Italy and Canada follow closely with approximately 180 and 170 buyers fully or partially canceling or putting their orders on hold. Fifth and sixth in line are Germany and France.

The cancellation and delaying of work orders raised questions about the ethical standards or ethical buying practices of brands and retailers. And this question is not less important than the question of factory safety in Bangladesh. When the Rana Plaza incident happened, the media made the incidents the only identity of everyone in an established apparel industry!

This incident came like a curse for the industry as the world was watching (still watches) Bangladesh in the eyes of ‘Rana Plaza’ and many buyers took away orders from Bangladesh giving the excuse of ‘poor compliance’ and ‘severe safety concerns. And still, buyers are playing the game with manufacturers to offer less price and control them in many aspects during buying deals.

We do not see international media, labor organizations, or Accord to talk about the unethical buying practice of brands and retailers that led to huge job insecurity among workers. Some 1,915 RMG factories have been declared laid off and 324,684 workers have become unemployed during the COVID-19 pandemic, according to a report revealed by the Bangladesh Institute of Labour Studies (BILS) in August 2020.

Brands and retailers who canceled and suspended work orders are mainly responsible for such factories’ laid-off and unemployment.

A report published in The Daily Star said that at least 127 major brands canceled contracts in various stages of production — sometimes turning away finished products lying at the port — or reneged on promised contracts.

An overwhelming majority are asking for massive discounts for products already produced or delaying payments by six months to a year, or worse, indefinitely.

The brands which canceled or postponed the highest volume of orders were: Primark, H&M, C&A, Marks & Spencer and Tesco.

Of the top 50 brands which reported the most cancellations/postponements from Bangladesh, only 10 have thus far made public commitments to pay in full for orders completed and in production, according to Worker Rights Consortium, an international labor rights monitoring body. These brands are H&M, Marks & Spencer, Tesco, Kiabi, VF, LPP, PVH, Inditex, Target and Ralph Lauren.

Declaring of International Accord: manufacturers’ responses 

A few days ago while a press release was issued by the Accord Foundation declaring the formation of the International Accord, suppliers of Bangladesh RMG did not welcome it at all and protest against the release.

Many leading manufacturers informed their concernment about the misleading release. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan said, “The claim that the International Accord agreement is being implemented in Bangladesh by the independent national tri-partite RMG Sustainability Council (RSC) is misleading.”

He said that the RSC was formed as an independent non-profit company, licensed by the government to take over the Bangladesh operations of the Accord and as such, the Accord functions in Bangladesh ceased to exist as of May 31, 2020.

The RSC took over the monitoring regime as of June 1, 2020, bringing the Bangladesh RMG safety monitoring regimes under one umbrella, Faruque said.

The RSC consists of all stakeholders having equal representation and is an independent platform, where the protocols of the former Accord 2013 had been adopted; where they proved to be competent and functional, the BGMEA president said.

“The board of the RSC was only accountable to its stakeholders and works through a unique consensual decision-making process, whereby no two groups may influence operations.”

The BGMEA President also said the industry has zero-tolerance for backsliding on matters related to safety, even while the rate of progress of certification may not be as per expectation, but the RSC is working to overcome these issues.

According to many manufacturers, highlighting only its continuation, own control over the manufacturers not addressing real issues within the supply chain.

If the world still recognizes Bangladesh through the Rana Plaza incident, why not the same world equally concerned about the unethical buying practices of brands and buyers?

Rana Plaza incident was a combined criminal action of the specific manufacturer and the buyers who placed orders there to produce their cheap fashion products.

Some foreign media, workers unions and human rights organizations are always emphasizing the poor conditions of the RMG industry in Bangladesh in the name of the Rana Plaza incident, they never highlight the buyers who placed orders there—Zara, Mango, Benetton, and Walmart retailers produced clothing in the Rana Plaza factories.

Following the tragic incident, an initiative known as the Bangladesh Accord on Fire and Building Safety was established to prevent other tragedies from occurring. The independent, legally binding agreement between brands and trade unions have received over 200 signatories from leading apparel companies from more than 20 countries, including H&M, Zara, C&A, Abercrombie and American Eagle Outfitters.

Bangladesh RMG industry has been going through huge investment in workplace safety and the investment got a significant boost after the Rana Plaza and Tazreen Fashion fire incidents.

All the members of BGMEA, BKMEA invested a huge amount of money to upgrade workplace safety in terms of fire, electrical and structural issues and eventually those have been audited thoroughly.

“We are investing a huge amount of money in our factories to upgrade the whole production process and new machinery. New automatic, semi-automatic and resource-efficient machinery has been added,” said some leading factory owners to Textile Today.

Now Bangladesh has achieved a position that can challenge and proudly say that Bangladesh’s RMG industry is the safest garments industry in the world. Among the ethical auditing practices of major manufacturing countries, Bangladesh has been placed second on a list compiled by the Hong Kong-based supply chain compliance solutions provider Qima.

However, the role of the Accord Foundation is not very impressive to improve Bangladesh’s RMG factories’ safety issues. In the 8 years of Accord’s operation in Bangladesh, the progress was not satisfactory.

Only less than 25% of factories have been certified under it for safety issues. There are many limitations by the factories which were ignored during the Accord’s certification process in the country.

Recently Rubana Haque said, “Accord had almost zero impact in Bangladesh. In the case of the RMG Sustainability Council (RSC), it is fully independent according to the newly formed International Accord, and is gaining the ability to operate independently step by step.”

“Though the Accord started with a good intention, it had many flaws in the implementation process. That is why the success of the initiative is very insignificant,” said Md. Fazlul Hoque, Managing Director of Plummy Fashions.

Accord and Alliance inspected only their member factory and they did not inspect other factories. Even if Accord comes for more years, they will not inspect other factories.

Outcome is disappointing 

The owners have to pay the workers properly to be compliant. However, in return manufacturers are not getting fair prices and a secured business model.

Now it is a big question ‘who will ensure the right price considering the manufacturers’ extra expense?’ It is so clear that this is the buyers’ responsibility to ensure the right price, however, they are always pushing manufacturers to provide clothing at the lowest prices.

According to BGMEA, Bangladesh’s RMG factories are increasingly investing money for safety and sustainability. Besides, production cost has gone up by more than 30 percent in the last five years. On the contrary, the price of apparel is declining every year.

BGMEA President recently made a call about fair price while addressing a roundtable titled ‘Seven years after Rana Plaza: Who is doing what?’

“While it is a fact that in a free market economy price cannot be dictated, nobody can justify a lower price to produce socially fair goods,” he said.

Conclusion

Manufacturers have already experienced difficulties due to the buyers-driven trade deals during the COVID-19 pandemic. Also, buyers are offering lower prices while factories are investing big for safety and sustainability.

To end this precarious reality, organizations like Accord should stand beside the apparel manufacturers to protect their rights, as legal accountability should not be about brands controlling their supply chains rather it should be about pushing brands to ensure ethical buying practices providing the right prices and taking true responsibility for their workers.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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