It took 1,100 deaths in 2013 for fashion and large retail chains across Europe and North America to come together and address an inevitable crisis. Rana Plaza, an eight-story commercial building in Bangladesh, which is considered to be a hub of textile manufacturing, collapsed because of its shabby condition. This incident led to extensive loss of life and property and an international outcry for businesses to be more responsible. The inevitability of the crisis resulted from warnings ignored by the owner of Rana Plaza, Sohel Rana, about the building being unsafe for work given the appearance of cracks. Yet the following day, Sohel Rana insisted that the workers report for work, and of the 3,122 workers who reported that day, 1,100 met a horrendous fate.
One might conclude that Sohel Rana is the sole person to blame for this disaster. However I argue that the large retailers and fashion houses that are comfortably sourcing their supply from Rana Plaza, and selling it off for billions of USD halfway across the world, are also partly responsible. Fashion and retail giants such as H&M, JC Penny, Gap, Walmart and Target, source supplies, mainly apparel, from Bangladesh’s mammoth textile industry. Yet there are no records of measures taken to address the lamentable conditions surrounding the workers who produce these billions of dollars worth of goods. A business is not only responsible for ensuring that it taps into suppliers that provide the best value but also should take the extra step to critically evaluate the conditions surrounding the supply chain.
Bangladesh is second to China in terms of industry size. In 2011, Bangladesh’s exports were reported to be $20 Billion, 80% of the country’s GDP. What is even more remarkable is that the booming of this industry has led to widespread employment and empowerment among women, who are considered to be the main class of employees in the textile manufacturing business. Unfortunately the Rana Plaza incident revealed further appalling conditions which these women were subjected to in addition to the unsafe working environments. These women workers participate under extremely difficult work conditions and routines with a minimum wage that is quite possibly the lowest in the world – a mere $38 or 3000 takas per month (Economist, 2013). These work conditions include working hours of 7:30 AM – 3:00 AM in some of the 4000 or so textile factories in Bangladesh with little or no job security. Coupling these conditions with working in spaces that are not marked for safety, poses an even bigger concern – should the firms who outsource production to local manufacturers in Bangladesh shoulder responsibility for improving labor conditions?
A responsible business should take the necessary step to ensure that its entire value chain is free from practices or conditions that will likely harm people, the environment, the brand, the reputation, the end-consumer, and the stakeholders’ interests. But what we witness in the commercial practices of today is that businesses, while being aware of their supply chain and the conditions surrounding it, rarely take preventive measures to remedy a situation before it leads to a disaster. Businesses respond and react – preemption and prevention of such tragedies is rare, and this is a norm that extends beyond the textile industry.
Fierce competition has forced businesses to find every possible avenue in cost cutting and creating more value. This includes outsourcing production to countries with the least wages, in this case Bangladesh, which has 1/5th of the wage cost compared to China, one of the top textile exporters in the world. But while businesses are trying to cut costs, they neglect taking the extra step to ensure that their supplies are coming from companies that adhere to international labor rights and work environment standards. Following the Rana Plaza incident, notable leaders in the fashion and retail industry came forward to provide funds for improving building safety standards and lobbying for improved wages for workers. On May 13, 2013, a legally binding “Accord on Fire and Building Safety in Bangladesh” to help pay for fire safety and building improvements was signed by various firms, mostly from Europe. A fund was also created of $14 Million by these leading firms to compensate the victims of the families in the Rana Plaza incident. But the issue remains as to why a business could not act upon the knowledge that the workers who are responsible for producing its products are not being taken care of by the owners of these production houses? Can we assume that the businesses were simply unaware? Or could it be that they chose not to take the extra step to free its value chain of inconsistent and unsafe practices? These issues are difficult to explore because the assumption that a business knew of an impending incident is hard to prove. However one can conclude that it is the responsibility of the business to take preventive measures while it is dealing with unpredictable manufacturing houses in a country that is struck by poverty. Rana Plaza was a supplier of several retail chains and a quick inspection would have made it clear that it was unfit to be a constant source of apparel – yet the companies on both the buying and selling side of apparel chose to ignore the safety and conditions of workers and focused solely on meeting demand.
Loose stitches such as these cause international outcries because they are left unattended until the garment fragments and then everyone rushes to find thread and needles to sew the garment back together. Yet given the resources at the disposal of retail giants, it should be expected of them to dedicate some resources and employ a decent sewing machine and sew these stitches before the garment tears away.
