Will the latest Bangladesh fatalities finally bring change to unethical supply chains?

Will the latest Bangladesh fatalities finally bring change to unethical supply chains?

“Life is Cheap.”

April 25, 2013. London, United KingdomYet another horrific incident has occurred in Bangladesh. This time a factory collapse has killed 161 people and injured hundreds more. The building housed a number of garment factories that have become sadly typical of industry in Bangladesh. Sadly typical because the workers are extremely low paid and often work in extremely poor and unsafe conditions. So why haven’t the previous disasters, like the Tazreen factory fire last November that killed 112 people and injured a further 200, had any effect on industry and safety standards?

Bangladesh is one of the poorest countries in the world, with more than a quarter of its population living in extreme poverty on less than $1 a day. In an effort to pull itself out of poverty, Bangladesh has made great efforts to attract western retailers to submit manufacturing orders with local suppliers instead of with their competitors in China, Vietnam and Latin America. Bangladesh is now the second largest exporter of apparel in the world. Despite having some of the longest lead times for orders and complex bureaucracy, retailers continue to come back to suppliers in Bangladesh because of one little thing – cost. Little being the operative word as the continued drive for cheaper items like clothes, drives down the retail price which in turn drives down even harder on the suppliers and workers who make the items. Workers in Bangladesh work for as little as 14 (US) an hour compared with workers making similar items in China who would receive around $1 (US) an hour.

It is this kind of commercial lure that attracts companies like budget clothing company Primark to source from Bangladesh. Primark confirmed that one of the factories in today’s building collapse, supplied garments to their UK stores. Global retailer Wal-Mart said it was investigating whether the factories were currently producing any items for their stores.

So where does the blame lie for a preventable catastrophe like this?

In this situation and the similar incidents before it seems the unethical reality is unfortunately quite simple. Life is cheap. Or at least it is to some unethical retailers. In the race to win every consumer pound, retailers will drive their prices down. There are clear limits to how far profitability will be impacted, so in turn the pressure is placed on the manufacturer. Combined with highly pressured lead times, costs are driven to a point where everything and everyone at the bottom of the supply chain is hard-pressed to make any kind of significant profit – with the ultimate losers being the people that actually provide the labour. But cheap labour in Bangladesh, clearly equates to cheap lives too. Why else would retailers continue to force manufacturers into an economic position that means they have little incentive to improve working conditions, or for that matter, a position where they can actually afford to invest in the safety and well-being of their workforce? The only conclusion can be that unethical retailers consider the risk of loss of life to be worth the commercial return they can get if they take their chances.

Primark said “it was ‘shocked and deeply saddened by the appalling incident’, adding that it has been working with other retailers to review the country’s approach to factory standards and will push for this review to include building integrity.” But will this momentary compassion, result in any real change? After all, it is not the first time that retailers like Primark have been caught using exploitative labour.

Retailers must take responsibility for their purchasing power and the effect that it has on poorer countries and desperate manufacturers. The answer is not simply to withdraw orders and force the collapse of businesses and the end of livelihoods for thousands. A better response is to genuinely look at the whole supply chain and ordering systems and see how at a very base level, minimum safety standards and pay can be achieved and then continue to build from there.

Consumers must also take responsibility too. If you are buying a t-shirt for a £1, logic would tell you that someone has got much, much less than that for making it for you. We all need to save money in hard economic times, but should our savings be at the expense of human life?

Companies need to be heavily involved in assurance and sustainability throughout their entire operation and supply chain. On a business level, the risk to brand is massive. On an even more important level – the risk to lives and livelihood, both here and abroad is even greater.

To find out how your company can become more ethical click here

Sources:

http://metro.co.uk/2013/04/25/at-least-161-killed-as-primark-supplier-factory-collapses-in-bangladesh-3666106/

http://money.cnn.com/2013/04/24/news/companies/bangladesh-factory-collapse/

http://uk.reuters.com/article/2013/04/24/uk-bangladesh-building-idUKBRE93N06U20130424

http://www.foodsecurityatlas.org/bgd/country/access/poverty

 

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