The Latest from Bangladesh

The major EU brand importers and retailers have come together to inspect their factory suppliers in Bangladesh and to offer funds for remedial action where required.  In this regard customers have listed 1000 factories that currently supply them with garments.

To carry out the necessary work they are putting together teams, which to a great degree include European technicians.  The results will no doubt be accurate and transparent.  When completed, the world will know which of the 1000 factory suppliers are in compliance and the specific work being carried to bring the un-compliant into compliance.

This is a monumental task never before carried out to this extent and including so many factories.

No one can accuse the EU of lack of good will.  Their hearts are definitely in the right place.

Now here is the problem.  The Bangladesh garment industry consists of between 4000-5000 factories, all of which are exporting garments, 2/3rds of which to the EU.

The current EU inspection plan covers 20%-25% of the factories.  Of the remaining 75%-80% not being inspected, most are exporting to the EU, indirectly.  These are the sub-contract factories, which for the most are unknown to the EU customers who deal only with their1000 direct suppliers.

In the next 12 months, as the EU compliance inspection ends and remedial action takes place, there will be to possible outcomes.

1. EU customers will ensure their goods are produced only in factories that have passed inspection — sans the uncounted subcontracting majority — in which case we can expect EU imports from Bangladesh to have declined by something on the order of 50%.

2. Imports from Bangladesh will have remained unchanged, in which case we can assume that the army of underground un-compliant subcontractors will remain still uncounted, still underground, still un-compliant and still producing.

The EU is still locked into the same paradox.

They want import from Bangladesh, but they cannot work in a country where unscrupulous factory owners in collusion with a corrupt government continue to put workers lives at risk.

By limiting their inspection program to their primary suppliers, EU customers can carry out the necessary work to ensure those 1000 factories are compliant in a limited period of time at a reasonable cost.  One plus factor is that the 1000 factories to be inspected include 100% of those located in secure and safe structures and meet the most rigorous compliance standards.  The most rigorous inspection at Pacific Jeans or Youngone might yield such complaints as “2 fire extinguishers in cutting department 3cm below required height”, or aisle marking at line 26 requires repaint” —not the things that lead to disaster.

The real problem is not with the 1000 to be inspected but rather the 3000-4000 that will not be inspected.  It is here that lies the most egregious failures as well as the costliest remedial action.  To inspect the entire industry is well beyond the EU customers’ capabilities.  They would require years and €billions to carryout the necessary work.

The question: What is the value of the current EU program?

Imagine a ship that is sinking,  and where the captain orders all holes in the structure to be repaired, in the first class cabins only.  This is the EU program

Until and unless the entire industry has been inspected including all the factories, direct suppliers and subcontractors alike, the risk of large scale catastrophe leading to multiple deaths remains unchanged.

Next time a fire burns down a factory or a factory building collapses leading to the death of hundreds or possibly thousands Bangladeshi workers, the EU customers will be held responsible because they have take on the responsibility to bring their suppliers into compliance.  Next time, consumers will not accept the excuse, “We did not know our 300,000 garments were being produced in that factory.

And, as customers finally pull out, it will be the good factories — those that were always in compliance, those that paid wages well above the average — they will the victims of the EU customer save-the-industry-program.

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2 Responses to The Latest from Bangladesh

  1. Rafael Choudhury says:

    This is ridiculous. Why the retailers should foot the bill and take the blame for trying to be competitive in the global market is beyond me. The safety of the buildings should lie with the government. They should pay inspectors to visit these 3,000 to 4,000 factories. It only makes sense for the government to ensure the infrastructure of the sectors that employ people and bring in taxes is working well. Unfortunately, the government officials are too busy lining their pockets with money…

    • admin says:

      Dear Rafael.

      I am on 50% on your side.
      I certainly agree that it is not the responsibility of the customer to to make their supplier factories safe or to improve working conditions.

      However, it is the responsibility to ensure their factories are operating the correct standards.
      Think of this not as an ethical issue but rather a matter of specification.
      A customer places an order for shirts.
      Included in that order are specifications:
      Fabric 100% combed cotton
      80/2, double mercerized
      Sleeve length 23 inches
      Worker minimum age 18.

      The prudent customer will carry out both in-process and final inspection to ensure the factory is working to specification. Working in Bangladesh any customer that does not carry out rigorous inspection would be certifiable.

      The point here is that minimum-age-18 is not an ethical issue any more than slleeve-length-23-inches specs.

      Having said that I have often thought that as a customer, if the factory wants me to carry out inspection, they should pay me for the service. Actually this does make sense but only when the factory is shipping my goods Delivery-Duty-paid and providing 30-60 day credit

      DAVID BIRNBAUM

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