The Bangladesh garment factory fire highlights the social responsibilities of the buyers in the age of globalization.
By Francesca Rheannon
A Tale Of Two Tragedies
The parallels are eerie: a mainly young and female garment factory workforce, piles of highly flammable fabric terrifyingly ablaze, locked exit doors, workers jumping to their deaths from upper floors that were engulfed in flames.
Let’s read the words of one survivor:
I saw the fire in the tables, where they were all full with lingerie material, you know, and that had come up in a flame. When I saw that, I ran out. I went to the door that was closed. I didn’t know that was closed. I went there, knocked on the door. Closed. I just stood there 'til they opened it. Forty people going down the steps, we all tumbling one right after another. And I saw people throwing themselves from the window. And as soon as we went down, we couldn't get out, because the bodies were coming down. It was terrible.
That’s Pauline Pepe, a survivor of the first fire, 94 years old when she told her story. Now listen to a survivor of the second fire:
When we heard “Fire!” we all rushed and were trying to get out of the factory. The factory worker broke a window, and one of the workers pulled me through the window. Immediately after the fire broke, we tried to run out, but the door was locked.
The tragedies occurred a 101 years apart, but they tell a common story: companies extracting maximum production with minimum cost and a flagrant disregard for worker safety. In 1911, it was the Triangle Shirtwaist factory in Manhattan; in 2012, it was the Tazreen garment factory in Bangladesh.
Tazreen: Triangle, The Globalization Version
Yet there are differences, because the Tazreen fire is Triangle: The Globalization Version. Bangladesh is outranked only by China in apparel exports. Wal-Mart is its largest customer. Other giants like the Gap, H&M, Disney, Sears, and PVH (Tommy Hilfinger, Calvin Klein et al) all source their goods from Bangladesh suppliers.
The industry employs some 3 million workers, mostly women, who toil at near-slave wages averaging about $37 a month -- 18 to 20 cents an hour. They are the cheapest workforce in their industry on the planet.
Working conditions are abysmal: more than 700 garment workers have died in factory fires since 2005. And, like garment workers in New York City a century ago, Bangladesh’s garment workers had begun to speak out, pouring into the streets by the tens of thousands to demand better wages and working conditions before the Tazreen fire erupted.
Why Did Tazreen Happen?
The chain of events leading up to the Tazreen fire is instructive; a summary is useful (and kudos to the Wall Street Journal for laying out the details):
- The mounting toll of occupational deaths from fire and the abysmal wages sparks mass protests;
- The authorities and owners crack down: factory owners lock workers out and file charges against them, police arrest workers, and a well-known labor activist’s body is found, riddled with marks of torture;
- Meanwhile, the holiday season is ramping up in the U.S. and big companies are pressing to have their orders filled. Wal-Mart is the biggest (at Tazreen, five of the fourteen production lines were churning out clothes for the retailer.) But...
- Fearful of repression, hundreds of workers fail to return to work after a religious holiday; there aren’t enough workers at the usual feeder factories to fill the demand.
- Simco, the supply broker for Wal-Mart, switches orders from an authorized factory where 380 workers have failed to show up to Tazreen (actually to the parent company, Tuba Group, which Simco says had been authorized by Wal-Mart in the past.)
- But Tazreen is not authorized to produce for Wal-Mart, after having been found to have major fire safety and other problems in a 2011 audit.
- Fire breaks out on November 24 at Tazreen and more than 112 workers lose their lives.
Who Bears the Responsibility?
Wal-Mart denies culpability for the disaster, pointing out in an official statement:
A supplier subcontracted work to this factory without authorization and in direct violation of our policies. Immediately following this incident, we have terminated the relationship with that supplier. The fact that this occurred is extremely troubling to us, and we will continue to work across the apparel industry to improve fire safety education and training in Bangladesh.
But as Steven Greenhouse and other journalists have reported, Wal-Mart was the leading force in 2011 behind the rejection of an agreement by U.S. retailers to pay suppliers in Bangladesh to ensure better safety at the factories. As an official in Bangladesh’s Ministry of Labor and Employment said, “The buyers write to us to improve working conditions. We asked them to raise prices by 25 cents per clothing unit that would go to workers' welfare. They refused.”
On a truly Orwellian note, it was the company’s Director of Ethical Sourcing who nixed the deal. “Specifically to the issue of any corrections on electrical and fire safety, we are talking about 4,500 factories, and in most cases very extensive and costly modifications would need to be undertaken to some factories,” he said, as recorded in the minutes of the meeting. “It is not financially feasible for the brands to make such investments.”
The words are chilling in the aftermath of the Tazreen fire’s grisly toll.
Who Can Afford To Pay For Worker Safety?
You may ask: why shouldn’t the factory owner be responsible for worker safety? The answer lies in globalization. Wal-Mart is primus inter pares for pressuring suppliers to the wall to cut costs. The factory owners in Bangladesh operate on the tightest profit margins. If they increase the price of their goods, they fear their buyers will go elsewhere -- like Pakistan.
It’s easy for Wal-Mart to claim “plausible deniability,” but the fact is, only the buyers have the wherewithal to pay for worker safety.
The Cautionary Tale of the Auditor
What about the auditor Wal-Mart hired to assure that proper standards were being maintained? Was it falling down on the job?
Intertek was the auditor for Wal-Mart (full disclosure: Intertek is a CSRwire member.) But Intertek can only audit companies that it knows are in the supply chain. When work is subcontracted out to un-authorized suppliers – in this case, under Wal-Mart’s frantic pressure to get orders filled for the holidays – the auditor is helpless.
In a 2008 report on ethical sourcing, Intertek cited “unrealistic buyer/supplier expectations” as “a negative factor in the ethical sourcing debate.” Does this refer to buyers’ reluctance to pay what it takes to create an ethical supply chain then?
The limitations of auditing provide a cautionary tale for the CSR community. The lesson: the ability to exercise oversight depends on the commitment of the buyer to promoting worker well-being across the board, including decent wages, good working conditions, and fair prices to suppliers.
PVH Corp and Tchibo Support Worker Safety in Bangladesh
While Wal-Mart and other companies (including the Gap and H&M) have so far failed to live up to promises to ensure better working conditions for workers in Bangladesh, two other companies are showing it can be done.
PVH Corp. and German company Tchibo have signed an agreement with labor advocates and unions to develop a fire safety program. Wal-Mart also has a fire safety program for Bangladesh, as does the Gap. But there is a crucial difference: the program PVH-Corp and Tchibo are supporting is more likely to be effective.
That’s because it “includes independent inspections, public reporting, mandatory repairs and renovations, a central role for workers and unions in both oversight and implementation, supplier contracts with sufficient financing and adequate pricing, and a binding contract to make these commitments enforceable.”
That’s a program with teeth – and so far, Wal-Mart and the Gap have refused to sign on to it.
Whether they will be moved to do so after the horrendous fire at Tazreen will show whether they are willing to put their money where their mouth is on corporate social responsibility. Their reputations are on the line – as are the lives of workers in Bangladesh.
The Triangle Fire was the impetus for passing tough industrial safety laws in the U.S. It’s a lesson not be lost in the months after Tazreen.