The garment industry is a key driver of a country’s economy and development, employing millions of people and accounting for national export earnings. At the same time, a series of fatal factory incidents has highlighted the sector’s deplorable working conditions and has exposed international retailers and fashion brands for exploiting the poor labour and safety standards to produce at cheap cost. This paper summarises the findings of a case study on the governance of labour standards in the garment sector. Its aim is to assess the current system of governance, such as the multitude of existing institutional arrangements which govern responsible business conduct the garment sector. In order to evaluate the system’s effectiveness in influencing buyer and supplier practices, its enablers and barriers as well as its shortcomings, qualitative interviews were undertaken with selected stakeholders.
Introduction
Global supply chains have linked developing countries to international markets, offering opportunities for income, employment and export-led development. Certain multinational businesses may also explicitly employ responsible business practices or possibly even sustainable business models when operating in developing countries or sourcing from the Global South, fostering an environmentally sound and socially fair production of goods and services (Rahman " Siddiqui 2015, p.3). At the same time, multinational corporations (MNCs) have been exposed repeatedly for deliberately exploiting lax or poorly enforced standards in production countries, contributing to environmental degradation, exploitative working conditions and human rights abuses. International fashion brands and retailers have also been criticised for driving a “race to the bottom” in which production chains are continuously relocated to where production costs are the lowest, perpetually lowering labour, social and environmental standards. Multinational businesses thus play a critical role in realising the UN Sustainable Development Goals (SDGs), and many have called for greater responsibility of the business sector with regard to the welfare and sustainable development in developing countries. Against this backdrop, SDG 12.6 foresees to “encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle” (Ministry of Labour and Employment 2013, p.7). Addressing this debate, this paper aims to look into ways and means of improving governance for responsible business conduct.
Labour standards (Kamal 2013, p.12)
Freedom of association; right to collective bargaining
Constitution provision guarantees on the right of freedom of association and the right to collective bargaining. In practice, however, only a limited number of registered garment factories are unionised. Union leaders and members are also faced with intimidation, physical assault, dismissal and false criminal complaints by factory officials.
Prohibition of child labour
The minimum legal age for employment in some countries is as low as fourteen. Significant efforts should be undertaken by the government to reduce child labour in the garment sector as fewer cases of child labour get reported in exporting factories. However, child labour is said to remain rampant in smaller factories which often form part of the informal sector and may indirectly supply to international fashion brands and retailers.
Prohibition of forced labour
Forced labour is prohibited by the Constitution and, in some countries according to the Fair Wear Foundations; stakeholders generally agree that garment workers are not forced into employment. However, it is frequently reported that workers are forced into involuntary overtime.
Prohibition of discrimination
Discrimination on the basis of sex is the most frequent form of discrimination in the garment industry in poor countries. Factories deliberately choose immigrants and young, unmarried, women from rural areas with little education for they are considered more obedient. Discrimination against women includes sexual harassment and the non-provision of maternity leave
Working hours
International labour laws prescribe a 48-hour working week and a maximum of 60 working hours per week when the resulting overtime is being paid additionally. Excessive overtime nonetheless remains widespread in the garment sector due to internal and external causes including tight deadlines, delays in the supply of raw materials, poor planning and insufficient training of workers.
Fair remuneration; social security
The current minimum wage, at about EUR 60 per month, was introduced in 2013 and is one of the lowest minimum wages in the world. Migrants will often work a significant amount of overtime to earn an additional income. The 2013 minimum wage law is also yet to be implemented fully, with a substantial share of factories currently not paying its workers minimum wages for regular hours and overtime. In smaller, subcontracted factories, workers often do not receive minimum wages and have no access to social security
Health and safety
Fire safety
The reported causes for factory fires include poor storage of materials that are flammable, overloading and damaged electrical systems, lack of adequate fire extinguishers, lack of clear plans on executing emergency evacuation plans, and employee unawareness of the state of working buildings. It is also alleged that workers are often locked in during their shifts, unable to leave the premises in case of an emergency
Machine safety
Injuries caused by workplace machinery are common in garment factories, including needle injuries and finger cuts from machines. Reasons include inadequate fencing of machinery, insufficient provision of personal protective equipment and insufficient training of workers
Building safety
With the rapid expansion of the garment industry, factories were oftentimes built swiftly with the use of substandard materials, and unsuitable buildings were converted into factories. For example, additional floors were added beyond the safe capacity of the building. Other widespread safety problems include faulty electrical circuits, inadequate fire escapes and operating heavy machineries on upper floors
Physical stress
Workers in the garment industry often work long hours in awkward postures without taking adequate breaks. This has reportedly led to a high prevalence of chronic health issues among garment workers. The lack of adequate supply of drinking water during working hours further adds to the physical stress endured by workers
Exposure to hazards
Workers handling or disposing of hazardous substances, i.e. chemicals used in textile processing, without adequate personal protective gear or training may suffer a variety of conditions and diseases in the short and long term. These can include skin irritation, respiratory problems, infections and cancer
Analysis of the system of governance
The global garments and apparel trade is characterised by a buyer-driven supply chain in which labour intensive processes take place in low-cost countries and producers are bound to the decisions of international buyers (Kamal 2013, p.13). Thus, when analysing the system of governance regarding labour standards in the context of Bangladesh’s garment sector, elements within the system may either address MNC and/or supplier practices.
As previously outlined, we differentiate three levels of governance, albeit a clear distinction cannot always be made and hybrid elements exist:
Hierarchical governance describes centralistic forms of coordination which are based on command and control
Market-based governance describes cooperation arising out of voluntary, price-based exchange
Network-based governance either works though the cooperation of interdependent actors who seek to realise shared interests (e.g. multi-stakeholder dialogues) or solidarity-based on joint norms and values (e.g. charity activities)
Elements of the system of governance
According to the interviewees, public/media awareness and commitment by management constitute the main drivers for MNCs to engage in responsible business practices and demand suppliers to adhere to certain labour standards. Public awareness is influenced especially by the media, NGOs and other expert stakeholders, who investigate, uncover and report on labour issues (Stotz 2013, p.17). Poor labour standards in the garment sector reportedly started to receive significant public attention in the 1990s, at a time when fatal accidents frequently occurred worldwide.
Hierarchical elements
Amendments have been made the Labour Act in garment producing countries with some of the notable amendments including sections on establishing emergency exits in factories, mandatory use of safety equipment by workers, formation of safety committees in factories and provisions for compensation due to worker death (Rahman " Siddiqui 2015, p.15).
To facilitate policy reforms and actions, these governments have also committed to adopting National Occupational Health and Safety Policy for their production industries.
With support from the ILO, these governments have been led to adopt the National Tripartite Plan of Action on Fire Safety and Structural Integrity (NTP), bringing together government actors, factories and workers for comprehensive action on improving health and safety conditions in the garment sector. Under the NTP, they have developed and implemented a number of key measures, including a reform of the country’s labour law and labour inspectorate (Moulds 2016, p.7).
The international level has thus seen the legally binding conventions and voluntary (business) principles named as particularly important in steering responsible business conduct:
ILO core labour standards
UN conventions such as the Convention on the Elimination of All Forms of Discrimination against Women
OECD Guidelines for Multinational Enterprises
Market based elements
MNCs require suppliers to adhere to mostly company-specific supplier code of conducts or buyer standards which often draw guidance from international standards, especially the ILO core labour standards.
Buyer standards vary in scope and detail and will likely further evolve in future. Buyers commonly enforce compliance with their standards through certification and auditing schemes which are offered such as by the Business Social Compliance Initiative (BSCI), Social Accountability International (SA8000), Sedex (Sedex Members Ethical Trade Audit, SMETA) and the Fair Wear Foundation (FWF). These in turn may be influenced by international standards such as OHSAS 18001 (Ministry of Labour and Employment 2013, p.11). The ISO 45001 standard on occupational health and safety is also currently being developed and may become a measure of compliance in future.
Supplier requirements may also be accompanied by some form of “implementation guideline”, exchange of knowledge and capacity building activities. The latter may be implemented through business and/or multi-stakeholder initiatives.
Network based elements
The Accord legally five-year binding agreement between European clothing brands and retailers, trade unions and “witness” NGOs, aimed at ensuring safer working conditions and empowering workers in the garment sector. It includes independent inspection and corrective action programs, the results of which are publicly disclosed, as well as worker trainings (Kamal 2013, p.20). The ILO Programme on Improving Working Conditions in the Ready-Made Garment Sector (RMGP Programme) has been developed to support the NTP and further commitments by manufacturing countries to improve working conditions in the garment sector. The Clean Clothes Campaign (CCC) brings together trade unions and NGOs to improve working conditions in the garment and sportswear industries (Clean Clothes Campaign 2017, p.2).
Influence on business practices
A series of fatal accidents drew attention from NGOs, the media and subsequently the greater public, urging MNCs not only to acknowledge the apparent lack in safety standards but also to take corrective action, accordingly. Many MNCs have set up buyer standards over the past years which however vary significantly in scope and detail. MNCs have also implemented various structural and procedural changes such as restructuring or strengthening their sustainability departments, improving risk management processes, training procurement personnel and expanding their audits both in reach and scale (Kamal 2013, p.21). Buyer standards are found to be heavily influenced by international frameworks including and foremost the ILO core labour standards, certain UN conventions (e.g. Convention on the Rights of the Child and Convention on the Elimination of All Forms of Discrimination against Women), the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. These frameworks have helped establish a shared understanding, define minimum standards on health and safety, working conditions and worker representation and determine the responsibilities and duties MNCs hold in ensuring the same. Multi-stakeholder initiatives influence business practices in multiple ways. The ILO and initiatives such as BSCI and FWF help define and sharpen standards on labour issues and provide additional information and guidance on implementing these standards. Especially smaller retailers and clothing brands with limited financial and human resources may benefit from such support (Ahmed, Tapley, Clemett, Chadwick p.12). Many of the initiatives also aim at facilitating exchange between MNCs, suppliers, trade unions and other relevant stakeholders and host and coordinate activities, accordingly. Another focus of organisations and initiatives such as ILO, BSCI and Accord lies in building capacity on the ground, such as by advising the government or providing worker and manager trainings. In the case of Accord, it was positively highlighted that companies financially contribute to the implementation of measures.
Verification and certification schemes such as BSCI, FWF and SA8000 monitor compliance with standards and certify supplier practices. They may equip MNCs and suppliers with adequate risk management systems. Accord monitors compliance by undertaking large-scale inspection programmes and providing a complaint mechanism (Kamal 2013, p.33). Lastly, several initiatives aim at increasing transparency within the sector. CCC, for example, is asking MNCs to disclose their suppliers as part of their campaign “Follow the Thread,” while Accord publish all factory inspection reports and corrective action plans
Health and safety
Following heightened pressure by the media and public, MNCs, together with international organisations such as ILO, has undertaken significant efforts to reform the garment’s sector health and safety standards and increase compliance with the same. These comprise:
Adoption of National Occupational Safety and Health Policy
Major reform of the Department of Inspections for Factories and Establishments, including new inspector positions, comprehensive training and formulation of an inspection strategy
Intensive training and capacity building efforts, e.g. through ILO, providing financial and technical assistance to the government, companies, labour unions, NGOs and other stakeholders
Inspection of more registered factories either under the Accord or NTP
However, despite the revision and specification of legal revisions pertaining to occupational health and safety, laws reportedly remains flouted due to weak, ineffective and corrupt agencies that enforce them (Ahmed, Tapley, Clemett, Chadwick, p.22). Fatal or otherwise grave incidents have nevertheless significantly decreased in number over the past years, according to most interview partners.
Accord is the most influential initiative bringing about an increased scrutiny of implementation and enforcement culture and improving compliance with existing standards through their large-scale inspection programmes (Ministry of Labour and Employment 2013, p.19). With all factory reports being disclosed publicly, suppliers are pressured to improve safety conditions in order to avoid the risk of being disengaged. Additionally, Accord has helped bring smaller producers into greater focus, including those which do not hold a direct contractual relationship but indirectly supply to MNCs. Since both Accord and other initiatives strongly focus on building and fire safety, there is little information available as to which extent conditions pertaining to physical stress and exposure to hazards have been sufficiently addressed and improved (Alamgir "Lung-Chang 2015, p.42). In addition, workers oftentimes do not receive their rightful compensation when a factory is closed down, either because the factories lack resources or the factory owners are unwilling to pay. Buyer standards, accompanied by audits, are to be named as another influential instrument in changing supplier practices. Since the demand is on suppliers to adhere to certain standards, suppliers will have to adjust and improve their safety practices in order not to be disengaged and secure future business (Kamal 2013, p.33). Audits and inspections themselves have reportedly also changed and nowadays more frequently involve workers or worker representatives. Current audits especially focus on properly marked fire exits and properly functioning fire safety equipment; load limits of floors; ventilation on floors; machinery safety; medical facilities; emergency plans and safety training of workers as well as regular safety checks.
References
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Alamgir, H.; Lung-Chang, C. (2015): Impact Assessment Report: Basic Fire Safety Training Pro-gram, retrieved from: http://www.bangladeshworkersafety.org/files/ut/Alliance%20Training%20Impact%20Assessment% 20Report.pdf
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Ministry of Labour and Employment, G. o. B. (2013): Steps taken by Ministry of Labour " Employment and Other Related Stakeholders after Rana Plaza collapse at Savar as of 15th April, 2013. Retrieved from: http://mole.portal.gov.bd/sites/default/files/files/mole.portal.gov.bd/page/83b1ad06_b9b4_4dd4_97 b3_a5749f81bb29/steps-taken%20Rana-Plaza%2007%20April,%20%202016.pdf
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Stotz, L. (2013): Clean Clothes Campaign. Retrieved from: https://www.cleanclothes.org/resources/publications/factsheets/bangladesh-factsheet-2-2015.pdf
