Regulating the Race to the Bottom
On November 24, 2012, a fire broke out in the Tazreen Fashions factory near Dhaka, Bangladesh. Managers ordered workers to stay in their seats, thinking the alarm was a drill. 123 workers died as the fire spread throughout the building. Workers trapped inside were incinerated; others jumped to their deaths out of upper-story windows.
Five months later, Bangladesh’s textile industry was marked by another high-casualty event about ten miles form the site of the Tazreen fire. On April 24, 2013 the Rana Plaza factory building collapsed, killing over 1,100 workers and injuring thousands more. Most of those killed were young women working long hours at meager hourly wages. The incident made international headlines and came to symbolize the human toll of the abusive—and largely unregulated—global garment industry.
The horror of the Tazreen and Rana Plaza disasters provoked global outrage and inspired calls for reform. European and American retailers established agreements to investigate and improve working conditions at their source factories. The United States government suspended Bangladesh’s preferential trade benefits. The Bangladeshi government, despite its deeply entrenched anti-labor interests, permitted two hundred new unions to register. But while many of these steps represent positive change, they are at best partial and superficial reforms. The global garment industry—particularly in Bangladesh—presents immense regulatory challenges, and power to initiate reforms lies largely in the hands of brands and consumers.
Bangladesh, a country of 160 million with a GDP per capita of around $800, is the second largest producer of apparel globally, after China. Its garment exports account for 80 percent of export revenue and a full 17 percent of GDP. The industry’s growth over the past several decades has been explosive, with exports increasing from $12,000 in 1978 to $21.5 billion in 2012-13. But while revenues from garment exports have played a key role in the development of Bangladesh’s economy, garment worker wages in Bangladesh remain the lowest in the world, at around $37 a month—about half those in China. Scott Nova, Executive director of the Workers Rights Consortium, explains that wages have been kept down over the decades by a weak regulatory environment within Bangladesh and pressure by Western retailers to produce at the lowest possible cost.
“The more the Bangladeshis delivered lower and lower costs by leaving workers completely unprotected, the more business the factories got, and so the more incentive there was to keep doing more of the same. That’s probably the purest illustration of ‘The Race to the Bottom’ that you’re ever going to see,” Nova said.
In the wake of Rana Plaza, many brands have worked to address the abuses of the garment supply chain. Companies have been divided, though, about the level of commitment they are willing to extend towards improving worker conditions. The Accord of Fire and Building Safety, which has been signed by over 190 companies, only 19 of which are American, requires brands to fund factory inspections and structural improvements. Every inspection so far has revealed some safety violation—a total of about 80,000 safety violations across 1,100 factories.
An alternative agreement, the Alliance for Bangladesh Worker Safety, does not require contractual commitments from signatories. The Alliance is supported by a smaller group of 26 companies, including American retail giants Wal-Mart and Target. Julia Wang, a National Organizer with United Students against Sweatshops (USAS), views the Accord as “a much more real contract,” because it is legally binding, whereas the Alliance is not.
The Accord also has much more much more robust support from workers themselves: 90 percent of all factory-registered unions support the Accord, according to Wang, who met with survivors and labor organizers in Bangladesh in 2013. Workers have denounced the Alliance, which provides no role for organized workers. And while the Accord makes its reports and recommendations publicly available, the Alliance is much more opaque, with no public information about whether funds are truly being transferred to factories for improvements. USAS focuses its garment worker solidarity work on pressuring universities to cut ties with corporations that haven’t signed on to the Accord, even if they’ve signed onto the Alliance.
While pressuring brands to sign onto the Accord is a crucial step to addressing pressing safety concerns in Bangladeshi factories that continue to imperil workers, both the Accord and the Alliance are time-delimited and will expire in 2018. Without other institutions in place, improvements in working conditions could be quickly reversed in the absence of a strong labor rights movement supported by political and regulatory reform. A November 2013 Senate report identified worker unions and an active labor movement as “the best bulwark against another tragic incident.”
Resistance to labor rights, though, is entrenched in Bangladesh’s political system, which caters to industry rather thank worker interests. 10 percent of parliament members are factory owners themselves, and nearly all have close ties to someone in the industry. The political climate is far from democratic, and no political party with any clout represents worker interests. While the Bangladesh government did register 160 garment unions in 2013 and the first half of 2014—compared to 2 between 2010 and 2012—they represent only a fraction of the 5,000 garment factories operating in Bangladesh. And unionized workers are subjected to regular abuse, from verbal harassment and intimidation to violent assault. The Senate report mentioned one case in which a female union leader was hospitalized after being attacked and knocked unconscious with a pair of cutting shears. In December 2014, the New York Times reported on attacks on female union leaders at factories owned by the Azim Group. The Bangladesh government sanctions these crimes by failing to prosecute perpetrators. Even police forces are often controlled in part by factory owners.
International institutions have virtually no real authority over garment worker conditions. While the International Labor Organization (ILO) launched a $24 million dollar initiative to improve working conditions in the ready-made garment sector, it has no enforcement capabilities. The United Nations member states have also not exhibited particular concern. International pressure from Bangladesh’s top trading partner could force the Bangladesh government to support reform, but neither the United States nor the European Union—the two top importers of Bangladeshi garments—have imposed serious sanctions.
In the absence of foreseeable top-down legal or political reform, the onus of action is largely in the hands of consumers and clothing brands. Pure market forces, in the absence of consumer preference for brands that ensure humane worker treatment, will keep garment worker wages depressed and conditions dangerous. Improving the conditions of Bangladeshi garment workers, however, would not require a radical departure from fast-fashion as we know it. Nova estimates that ensuring safe working conditions in Bangladesh would raise the retail price consumers pay for garments produced in Bangladesh by a mere seven cents an item. But he doesn’t expect this to happen without consumer activism.
“We’re dealing with an industry with brands and retailers that have always demonstrated greater concern about saving literally one cent than they have about protecting workers,” Nova said.
Ultimately, it is up to NGOs, universities, and consumers to serve as watchdogs and activists for worker rights by holding brands accountable for the working conditions in their source factories. As the horrific images of bodies being excavated from Rana Plaza’s ruins fade from public consciousness, so will pressure on brands to ensure safe working conditions. Instead of working in concert with the Bangladeshi government and factory owners to reinforce a production model built on hyper-exploitation, brands should work to ensure factory safety and to pressure the Bangladeshi government to support labor organization. These reforms could be compatible with market forces—if consumers actively show brands that they would indeed be willing to pay an extra seven cents a garment to protect basic labor rights overseas.