Archive for December, 2012

The horrific fire and consequent loss of life at Tazreen Fashions made the International pages of newspapers worldwide when it struck in November of this year. The New York Times has been particularly diligent in tracking the story, and has devoted many op-ed column inches to decrying the poor health and safety environment that the Bangladeshi workers that clothe US citizens are forced to work in. It is not surprising that in the West the story has resonated most deeply with an American audience given firstly that Tazreen was supplying American corporations, and secondly that there are clear parallels between what happened in the blaze here and the Triangle Shirtwaist factory fire in New York City some hundred years ago. In both of these incidents stairwells were locked so that workers were unable to escape, forcing many to jump to their death rather than face the agony of immolation.

That the deadliest industrial disaster in the history of New York City lead to widespread unionization of factory workers as well as a slew of labour legislation aimed at protecting the workers in the garment industry begs the question: will the same happen here in Bangladesh? It is true that the aftermath of the fire has seen public anger which has manifested itself in demonstrations and vandalism against factories. To a certain extent this ire has been subsumed by a wider unrest that is occurring here in the run up to elections in 2013. The opposition party is calling on the incumbent government to install a caretaker regime to oversee the nationwide polls in order to ensure a free and fair election process. Thus far the government has resisted these calls. This has led to widespread strikes, roadblocks and violence. In other words, the calls for government attention from garments workers may have been drowned out in what is already a very noisy political atmosphere.

Political clamour notwithstanding, it is doubtful whether the Tazreen fire will be a catalyst for meaningful change in Bangladesh. Many in the west are blaming globalization for this sad fact. It is argued that globalization creates incentives to “race to the bottom” in terms of safety and labour costs. Certainly it is true that in recent years, production has increasingly moved here from China as the cost of Chinese labour rises. Whether this is a bad thing or not is open to interpretation.

On the one hand people see immorality on the part of western buyers who, rapacious in their pursuit of profits, move production to a country where they can get away with paying workers 4000 taka a month ($50) a month for working 60 plus hour weeks. On the other hand this has led to a large increase in growth in both GDP and textile based exports in Bangladesh as well as providing a living for tens of thousands people (predominantly women) where previously there may have been none.  Furthermore, it should not be overlooked that the reason that Chinese wages are now relatively more expensive is partly due to the fact that human capital and technical experience has accumulated in the garment industry there pursuant to their having once been at the bottom of the global race for cheap labour.

The existence of these benefits from being one of the most competitive countries in the world in terms of labour price does not mean however, that it is right that workers should be subjected to working conditions that denigrate them as humans. Thus, a globalized race to the bottom for labour costs may well bring some benefits but it is hard to argue that a consequent race to the bottom of the working standards is in some way productive, and even if it were, it would certainly be hard to argue that it was justified in the pursuit of profit.

Thankfully the race to the bottom of the health and safety pile is not as ubiquitous in globalizing economies as the race for low labour costs.  An interesting example is dolphin friendly tuna. In that case western consumers, consumer groups and special interest NGOs used their purchasing power and political clout to pressure for domestic means of identifying tuna that had been caught using dolphin friendly fishing techniques. This created a race in the international supplier nations to ensure that systems were in place such that the tuna caught would be eligible for sale in the huge Western markets. The West imported tuna, and in effect exported their expectations about environmental standards.  Given that the health and safety in garments factories is as much a question of production standards as the means with which wild fish are turned into sashimi, there is no reason to suspect that a similar exporting of standards could not be achieved in the case of the garments industry. Western consumer pressure can therefore have real clout in increasing protections both for marine mammals and factory workers.

Unfortunately there are least three constraints on this kind of change. Firstly, people are not as photogenic as dolphins. Although there was a flurry of western media activity in relation to the fire, it is much harder to sustain that kind of attention for people than it is for animals or the environment. Even in the case of animals,

international-standards changing movements can only really galvanize behind those beasts which are easily anthropomorphised, such as orangutans and dolphins. The threat to sea slugs from trawler fishing is hardly likely to get anyone excited. This is pretty ironic, as when the beasts in question are in fact anthro – i.e. human – it can be even harder to generate enough sustained interest for change. Sadly this means that although there was a lot of rightful indignation at the senseless waste of life that this fire caused it is very likely that sufficient pressure will be put neither upon the Western governments to restrict imports on garments that come from factories that routinely flout safety compliance measures, nor on the buyers to ensure safety standards in their supplier factories.

Secondly, factory owners often tell buyers one thing and do quite another. Thus although Walmart’s cry of “we didn’t know” may sound hollow to Western skeptics, it is actually fairly plausible. Big buyers conduct spot audits of the factories that supply them with goods in order to gauge how up to date they are on social compliance (including health and safety). These requirements are frequently imposed not by the home government of Bangladesh but by the buyers themselves as part of their corporate social responsibility strategy.  For example, Marks and Spencer work to ensure that a certain fraction of jobs within a supplier factory are given to the disabled.

Despite this system of audit, factories will often illegally outsource production to cheaper suppliers who are less constrained by the demands of the buyers across many dimensions, and are thus able to supply the goods at a cheaper price than the factory with which the buyer directly contracted. This ensures that factories with poor working conditions can still operate despite the preference of buyers to work with factories that will not generate the kind of bad press that the Tazreen fire did for Walmart.

Is it possible that Walmart really did know that their goods were being produced Tazreen? Yes, I would not put it past them as they have a fairly well documented history of greed for profit margins. However, is it possible they really were unaware? Yes it is. All buyers have large teams of expensive-to-maintain compliance officers that check on the factories. But eliciting truthful information from factories is often extremely difficult, as I know from my own direct experience from working in the field.

Thirdly, and most obstinately, Western consumers are addicted to cheap clothing. Factory owners here may appear greedy in terms of how much they take home relative to their workers, but they are faced with difficult decisions. Metal values are soaring pushing the prices of machines upwards. Raw material prices are on the rise. Even labour costs, as paltry as they may seem to the West, are also creeping upwards. Against this backdrop, the West is in recession with all the focus on austerity and low cost options that that entails. Buyers want lower prices every year. Many factories operate at losses for part of the year. In such a climate, all energies are focused on staying open, keeping production running. They are not likely to be focused on how to improve fire safety.

This is not to say that low prices justify factories in not providing safe environments for their workers. Indeed it is quite possible that the Tazreen disaster would have occurred even with prices such that they could better afford to focus more on social compliance. This is because some factory owners are just greedy, thoughtless capitalists with no care for their workers. These men, even with better prices from their buyers, would probably siphon off the extra profits without making efforts to improve conditions in their factories. After the fire alarm was raised in Tazreen Fashions, workers were instructed to go back to work. This disgustingly callus and complacent attitude toward worker safety on the part of management is not likely related to low prices for output. However it would be naïve to believe that in general low prices do not contribute to low health and safety standards in the industry.

The upshot of these three constraints on change is that for conditions in the Bangladeshi garment industry to improve due to Western pressure, several things must happen almost simultaneously: Bangladeshis must become more attractive relative to dolphins, audits systems must be tightened (or Bangladeshi factory owners must not seek out ways to increase their margins through subcontracting), and either Western buyers will have to live with smaller margins, or Western consumers will have to be willing to pay higher prices for their clothes. With the exception of the possibility of improving audit systems, the likelihood of these things occurring seem pretty slim given what we know about physiognomy, capitalism, and the predilection of Western consumers for 3 Euro T-Shirts. Thus it seems that Western pressure in the wake of this fire will not be a sufficient vehicle for change here in Bangladesh.

This is not the end of the story, as change could plausibly come not pursuant to Western pressure, but from within. It will require some major upheavals. The major difference between the New York of 10 years ago, and the Bangladesh of today, was ability of the New Yorkers to organize into unions. Here in Bangladesh the rules regarding unionization are prohibitive. At least 30% of any workforce must be members for a union to form. Membership is restricted to those that are employed, meaning that termination from employment prevents membership of the union. Violence and intimidation are frequently practiced against union demonstrations, and the demonstrations themselves are subject to government approval. Thus it is that there is a chronic shortage of labour in the sector which should mean greater worker power to call for increased wages and better standards whilst the absence of unions means that this power cannot be turned into improved working conditions. The capitalist classes hold sway in government circles whereas workers have no means of expressing their demands.

As it stands, the formation of unions is even less sexy a cause than the poor old sea slug. Therefore there are not really any circumstances where Western pressure will be sufficient to induce meaningful change here. For real progress to be made in ensuring a decent working environment for garments industry workers, the workers themselves will have to fight for their right to freely organize.

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