SubSist: Will safety deal help us to find ethical clothing?

Big brands sign up to try to prevent another disaster

This post was published by SubScribe on May 17, 2013

Three weeks ago 1,127 people were killed when an eight-storey factory block collapsed in a Dhaka suburb. The victims were largely garment trade workers, most of them making clothes for the Western market.

This week 31 big-name Western clothing chains endorsed a fire and safety accord designed to ensure that such a tragedy never happens again. Between them, these chains buy from more than a thousand factories in Bangladesh. Campaigners were delighted with their haul and declared it a watershed, the dawn of a new era.

Wow, that was quick! You wouldn't have thought it possible. Well, it's without doubt an achievement, but it wasn't quite that quick and it is sadly unlikely to be a cure-all.

The idea for the accord grew not from the Rana Plaza disaster last month, but from a series of fatal fires culminating in one that killed more than a hundred workers at the Tazreen factory in the city last November.
In January this year, the Dhaka Government, garment manufacturers and workers' organisations agreed to work together to produce an action plan to improve fire safety at work across the country. A committee was formed and its recommended strategy was approved by the Government at the end of March.

That basically called on ministers, employers and workers to recognise and fulfil their responsibilities and for outside organisations - such as brands and international development agencies - to be encouraged to join the party. PHV, which is behind Calvin Klein and Tommy Hilfiger, and the German company Tchibo signed up straight away.

The latest tragedy gave the campaign for action added impetus, and a deadline of midnight on Wednesday was set for retailers to sign up. The fact that so many household names did so in the final 48 hours, with H&M leading the charge, suggests that a tipping point may have been reached. Customers are demanding action and more information about the clothes they buy.

The accord aims to establish a new inspection regime that places makes the retailer as well as the factory owner and the Government take responsibility for workers' safety. Stores will be expected to put up to $500,000 a year into the project and to contribute towards work needed to bring factories up to standard.
If manufacturers fail to meet the required standards, the retailer will have to stop doing business with them.
The agreement also aims to give workers more muscle. They should be trained in fire safety practices and be allowed to refuse, without penalty, to work in a building if they fear that it is unsafe. Health and safety committees are to be set up at factories and workers should make up half the representatives.

So far, so good. Even better is the fact that implementation is intended to start immediately and that it should be well on the road by the end of next month. A steering committee is to be set up to get things moving, with its major task the appointment of an independent safety inspector 'with fire and building safety expertise and impeccable credentials'.

Workers and the exporters will have equal representation on the steering committee, whose chairman will come from the International Labour Organisation. The factory bosses are excluded from this area, although they will have seats on the advisory board that will discuss strategy and - with luck - build stronger relations between the various interested parties. They will also be represented on the committee that actually runs the show.

The Government has meanwhile promised new laws by the end of the month. The minimum wage is to be raised - at £25 per month, Bangladeshi clothing factory workers are the lowest paid in the world - and the ban on the unionisation of factories is to be loosened. It has also said that it will train 200 more safety inspectors by the end of the year - at the moment there are only 50 to cover 200,000 factories (or 18 to cover 100,000, depending on whose figures you use).

There are still many hurdles to be overcome, however. Many factories are in Export Processing Zones from which trade unions are banned. If the Government produces its promised legislation (which is by no means a given) workers will be able to form unions and enter into collective bargaining. Yet it will still not be illegal for employers to fire employees trying to organise workers. How is that going to work? Who is to determine whether people have got together in a reasonable manner or whether they have been suborned by a rabid firebrand?

And always at the back of people's minds will be the torture and murder last year of Aminul Islam, a local president of the garment workers' federation. His killer has not been brought to justice.

We are a long way from happy families here. Factory owners have a huge influence on the Government - both inside and outside of parliament. About half of the country's MPs have business links and a tenth own clothing factories. They are hostile to trade unions and will not like their central role in the new regime.

Nor are they too happy with their customers, the big-name buyers from the West who have been pushing them on prices. Costs have risen over recent years, even before the promised reforms, but prices have been kept low. 'The buyers have not given anything. They just say "increase your productivity",' one owner told Reuters.

Unions and anti-sweatshop campaigners such as War on Want and Labour Behind the Label are understandably impatient for change. But there is an aggressive tone amid the accord celebrations. The main targets for their venom are Walmart and Gap, who have declined to sign up.

Gap said it was ready to sign but was concerned about possible ramifications of the accord being legally binding. It fears - probably quite reasonably, as the New York Times pointed out - the potential cost should any dispute end up in an American court. Walmart, which owns Asda, said it had already acted by starting its own inspections, including using thermal circuit imaging to check electrical systems. It has also promised fire safety training for all workers and to publish a list of approved factories and their inspection results. It has not, however, committed any money towards repairs or improvements.

Such explanations, or excuses, cut no ice with campaigners. Paul Jennings, general secretary of UNI Global Union, said: 'Walmart, the world's largest retailer, is out of step. By not signing up, the Walmart brand sinks to a new low.' Tim Noonan of the International Trade Union Federation, accused Walmart of sticking with a system that had failed 'year after year...corporate-sponsored investigations that aren't investigations'.

Murray Worthy, a War on Want campaigner told the Independent that Gap's position was absolutely outrageous and that its objection was a smokescreen that would rip the heart out of the agreement. 'It's a straightforward statement that they don't care at all about the safety of their workers and aren't interested in taking action to put that right.' The Labour MP John McDonnell said people should boycott the shop and that British customers had a duty to force it into action.

Are such complaints justified? Bloomberg Business Week notes that JC Penney had also remained aloof, commenting: 'These companies are concerned about preventing the fires and collapses...but signing a legally binding agreement with built-in systems to resolve disputes that was created with labour unions? That’s too European.'

Photograph by Susie Taylor
The Atlantic

American companies will need a lot of persuading to join in this sort of initiative - and activists know it. On the day of the Rana Plaza disaster, theAtlantic website told the story of a Tazreen fire survivor who was in Washington to try to persuade big chains to act. "I've come to America to tell people that we deserve safe working place, that factories in Bangladesh are no safer for workers than before," Sumi Abedin told the site. Ms Abedin, above, is a powerful ambassador, as Jason Motlagh and Susie Taylor's report testifies:

When a fire engulfed the Tazreen Fashions garment factory in late November, Sumi Abedin was resigned to die. Defying orders from floor bosses to stay at her sewing machine after word got around that a blaze was spreading down below, she and her co-workers ran to the two "women's" exits, only to find them padlocked. Another "male" stairwell was choked with smoke and bodies, forcing her to retreat by the light of a cell phone.
Amid the screams and confusion, a ventilation shaft offered a way out: a three-story fall to the ground, one that could also be fatal. "I did not jump to save my life; I jumped to save my body," says the 24-year-old, hoping her family could identify her remains.
Will she be able to sway Walmart, which buys from 279 factories in Bangladesh and is the industry's second-biggest customer, spending $1bn a year in the country?

Shortly before the deadline for signing the safety accord on Wednesday, the company broke off relations with a supplier because documents in the Rana Plaza wreckage included an order dated May 2012 for more than 5,000 pairs of skinny jeans destined for its shops. Walmart had said after the disaster that it had no dealings with factories in the building.

The timing of the announcement and the detailed explanations are interesting. Walmart's supplier was the Canadian company Fame Jeans, which had apparently given an assurance that it had not dealt with Rana Plaza. Walmart said: 'Based upon our policy on unauthorised sub-contracting we are terminating this supplier.' Fame Jeans immediately put up its hands, with Alen Brandman the chief executive, saying: 'It's very clear that Walmart did not authorise me in any capacity to work within this factory.' A 'rogue employee' had placed the order without the knowledge of senior managers. Ah, those rogue employees. You just can't trust them.

Funnily enough, Walmart had severed links with another supplier after the Tazreen fire. Funnily enough documents surfaced showing that a supplier had been buying clothes from that factory. "A supplier subcontracted work to this factory without authorisation and in direct violation of our policies," the company said.

Scott Nova of the Workers Rights Consortium, which monitors workers' rights in factories producing goods for sale in the US, was unimpressed by the coincidence: 'One disaster after another at factories producing Walmart goods, but it's never Walmart's fault. They always have some story about a rogue supplier or sneaky subcontractor.'

Other order dockets found in the Rana Plaza rubble showed that the Spanish Mango chain and the Danish group PWT had both had dealings with the Phantom Tac factory based in the building. Mango said it had requested samples and the order would not have been confirmed until the factory had undergone a successful social audit.

Profit and loss

Retailers have been criticised for their big profit margins, so it is interesting to look at these a little more.

The Mango order was for 12,000 polo shirts at $4.45 (£2.92) each, which it would sell in its British shops for £26 - £30.

PWT had ordered long-sleeved checked shirts at $5.08 (£3.34) each, which would be be marketed under the Jack's label for 25 euros (£21).

Inditex, which owns Zara, operates on a gross margin of 58% - the bald relationship between the cost of the goods and the price for which they are sold. But when other costs - premises, staffing, taxes, shipping etc - are taken into account, this comes down to 16%. H&M's margins are 55% and 9%.

Activists say that the published figures show that they could afford to pay more to see workers' conditions improve without a big increase in the prices in their shops. The TUC was quoted in The Times on Saturday as saying that doubling Bangladeshi workers' pay would add only 2p to the cost of a T-shirt.

The BBC has also looked at margins, taking as its example a pair of $50 jeans for sale in Germany. Breaking down where the money goes, Philip Hampsheir says that 39% ($19.50) goes to the retailer, 16% ($8) in tax, 9% ($4.50) on shipping and 20% ($10) on the denim, buttons, zips etc.

That leaves 16% ($8) to go to the producer, who has to pay his rent, fuel and equipment bills and taxes as well as his workers before taking his share. The BBC puts the cost of manufacture at $6 and the profit at $2. Some will take this as proof of how Western retailers are squeezing their suppliers, others will question the way that final $8 is split.

Is any of this helpful for the shopper who merely wants to know whether their jeans or T shirt have been made in a sweatshop? Probably not.

And so we come back to the Little Red Sewing Machine and the need for a reliable guide to whether workers are properly paid and decently treated. Remember, the accord that brought whoops of joy this week relates only to safety. That is obviously vital to avoid another tragedy, but even if it brings real change - a big if - we are still a long way from making sure that women are not chained to their sewing machines for 12 hours at a time for a pittance.

And another thing: this accord applies only to Bangladesh. Three people died and dozens were injured or trapped when a factory roof collapsed in Cambodia on Thursday.

It was making trainers for the Western market.

Some facts
The retailers who signed up to the accord are:

Abercrombie & Fitch
Aldi
Arcadia (Top Shop, Top Man, Dorothy Perkins, Burton,
BhS, Miss Selfridge, Outfit, Wallis, Evans)
Benetton
Helly Hansen
H&M
Inditex (Zara)
John Lewis
Lidl
Loblaw (Joe Fresh)
Mango
Marks & Spencer
Mothercare
N. Brown Group (various plus-size labels, Figleaves,
Ambrose Wilson, Heather Valley)
New Look
Next
Primark
PVH (Calvin Klein, Tommy Hilfiger)
Sainsbury's
Shop Direct (Littlewoods, isme)
Tesco

Carrefour (France)
C&A (Germany)
El Corte Ingles (Spain)
Esprit (Hong Kong)
G-Star (Netherlands)
Hesse Natur (Germany)
JBC (Belgium)
KiK (Germany)
Stockmann (Finland)
Switcher (Switzerland)
Tchibo (Germany)
WE Europe (Netherlands)

SubSist

Sunday, May 19, 2013

Will safety deal help us to find ethical clothing?

Profit and loss

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