Marcus Chung, Haas MBA 2004 and former Net Impact Board member, reports his impressions after a recent trip to Bangladesh. Marcus is a CSR consultant who has worked in CSR and apparel for the past decade. Formerly head of corporate responsibility for women’s clothing retailer Talbots, Marcus has worked with or advised a number of large, global apparel brands.
From the moment you enter the Dhaka airport, it’s clear that the apparel industry is greatly important to Bangladesh’s economy. Airport walls are lined with huge posters advertising local garment manufacturers, textile mills, and trims suppliers. Apparel accounts for between 70 and 80 percent of the country’s exports, so it’s no surprise that almost everyone on my flight from Hong Kong to Dhaka declared their profession as “buyer” or “sourcing” when clearing through immigration.
I visited Dhaka on behalf of a client to get a better understanding of the CSR challenges, trends, and opportunities that large apparel brands face in sourcing from Bangladeshi garment factories. Following November 2012’s tragic Tazreen Fashions factory fire that claimed the lives of more than 100 workers, there is definitely renewed focus on how the industry can promote better factory working conditions. Tazreen was just the latest in a string of Bangladeshi garment factories that burned to the ground, but it also was the country’s most devastating in terms of the sheer multitude of lives lost.
Yet it makes economic sense for almost every Western mass-market apparel retailer to source from Bangladesh because you can get a solid product at a competitive price. The apparel industry cannot ignore a fundamental commercial reality: Bangladesh has a ready supply of very capable garment factories that are filled with inexpensive labor and it’s not realistic for companies to simply stop sourcing from Bangladesh. Therefore, the industry must do a better job of sourcing in a responsible manner that protects the rights of workers and includes basic commitments to a safe and healthy work environment.
A Multitude of Challenges
I’ve spent the past decade or so in the garment industry and over the years I’ve heard many hypotheses about why fire safety continues to challenge so many Bangladeshi factory managers. Some cite an ineffective, corrupt government that does not enforce its own building code regulations. Others believe factory middle managers, myopically focused on production output, lack the ability or understanding to support fire safety practices with workers. Many believe pressure from Western brands to achieve low-cost goods encourages subversion of basic health and safety standards. I’ve heard people claim the root cause is a basic lack of infrastructure: old, multi-story buildings with poor electrical wiring; unreliable power supply (I cannot count the number of times the power went out during my visit) that causes short-circuits; and dusty, flammable materials lying dangerously close to unprotected electrical outlets. I spoke with one CSR leader who lamented a general lack of civil society and a culture where officials will agree to make improvements, but never follow through.
Signs of More Systemic Change
It’s abundantly clear that the Tazreen fire has shaken the garment industry in Bangladesh. In each of my factory visits, owners and managers were eager to show me the improvements they’ve made in fire safety, many of which were recent and required financial investment. Even unsolicited, factory managers would point out the fire extinguishers and emergency exits on each floor. One factory owner was immensely proud to show me his newly installed on-site water pump, with hoses that could reach the top of the building. He eagerly invited some workers who were trained to use the hoses to demonstrate the system’s ability to reach the roof of the nine-story building.
But why build a nine-story factory to begin with? One factory manager explained to me that each floor in his building was in fact a separate legal entity. Even though he owned the entire building and each separate factory within it, government incentives encouraged the practice of adding new factories on top of each other. The top-most factory, added to the building only one year ago, was made possible because the factory owner did not have to pay taxes on one year of factory operations after its establishment.
Many people have cited the vertical “stacking” of factories as especially problematic with garment factories in Bangladesh. Last October, Gap Inc. announced a plan to address building fire safety standards in its contract factories in Bangladesh. While many companies have rightly focused efforts on fire evacuation (ensuring the factory conducts regular fire drills and requiring each factory floor to have an adequate number of fire escapes), the Gap initiative brings in expert engineers to identify tangible structural improvements. To me, this approach starts to get at some fundamental challenges across the entire industry in Bangladesh and also in other countries.
Along with the physical improvements that will be demanded by Gap and other brands, a culture of fire safety awareness and fire prevention seems to be taking hold. One factory I visited had organized a fire-fighting team in each production area. The teams were composed of factory workers and management, creating a level of accountability, collaboration and worker-management discourse that previously did not exist. I applaud this approach not only because it addresses the immediate fire safety challenge, but also because it begins to build a culture of open discourse between production managers and workers. Members of this team wore yellow vests with the word “fire” printed on the back and team member photographs were highlighted prominently on posters in each area.
Factories in Bangladesh are far from perfect and it’s clear the industry has a long way to go toward better conditions, but two things keep me optimistic. First, brands are making real investments in the country’s future. Sourcing leaders – not just CSR professionals – from the world’s biggest apparel brands are seriously looking at factory health and safety. I recently attended a meeting on Bangladesh fire safety standards where half the attendees were Sourcing executives and the remainder were CSR professionals. Brands are making investments, but in a careful way to ensure maximum positive impact.
Second, there seems to be a willingness to change among factory managers. The big garment manufacturing companies in Bangladesh know that they’re under the spotlight. Media are now focused on challenges that brands have been raising for years. The garment industry is too important for Bangladesh business owners and government to put at risk with lax fire safety standards.
It’s unconscionable that any person should lose his or her life in the name of garment manufacturing. If nothing else, let’s hope the tragic fires of Tazreen, Hameem and others serve as a catalyst for real change. With responsible sourcing strategies and principled decision-making, we can put ourselves on a path toward a safer industry that respects the value of each and every worker’s life.