Four Years After Rana Plaza, New Research Brief Spotlights Lagging Progress on Workplace Safety

Monday, April 24 marks the fourth anniversary of the Rana Plaza factory tragedy in Dhaka, Bangladesh. More than 1,100 people were killed and more than 2,500 injured when the eight-story factory complex collapsed. The worst industrial accident in the history of the garment industry, the implosion occurred just months after a fire at the Tazreen Fashions factory, also in Dhaka, in November 2012 claimed the lives of 112 garment workers. 

These incidents—part of a broader spate of deadly industrial accidents affecting Bangladesh’s apparel sector —drew global attention to the hazardous working conditions that garment workers endure, including substandard factory construction and inadequate regulation and enforcement of building and safety codes. They also put pressure on foreign brands that produce apparel in Bangladesh to account for labor risks in their supply chains.

2013-07-09 05.50.49.jpg

In the aftermath of Rana Plaza, two coalitions of retailers and other interested parties vowed to improve working conditions. Mainly European retailers and unions developed the Accord on Fire and Building Safety in Bangladesh. North American retailers, including Walmart and Gap Inc., signed a compact called the Alliance for Bangladesh Worker Safety. Both made a five-year commitment to inspect all factories producing apparel for their member companies, devise corrective action plans to address factory safety violations, and work with factories to remedy these problems. 

Recent research by the NYU Stern Center for Business and Human Rights reveals progress has been slow and scattered. Four years after Rana Plaza, only 79 factories—out of some 2,256 factories—have fully completed the remediation process. This completion rate amounts to just 3.5 percent. Both programs have yet to fix about one-quarter of identified factory safety issues. Many factories, moreover, lag considerably behind their timeframes for addressing these code violations, including 94 percent of Accord-affiliated factories. 

These findings call into question the Accord and the Alliance’s ability to achieve their mandates within the next year. Consider the progress still necessary to address structural problems, which led to the Rana Plaza tragedy. The Accord has yet to address more than two-thirds of structural issues identified, while the Alliance has yet to address two-fifths. And, as of June 2016, the International Labour Organization reported that the financing gap for garment factory remediation in Bangladesh measured around US$448 million. (Note that this figure also encompasses the cost of remediation action prescribed by the ILO-supported National Tripartite Plan of Action, which the ILO estimates accounts for approximately 46 percent of remaining remediation costs.)

2013-07-09 05.23.36.jpg

  
What steps, then, are necessary to prompt far-reaching workplace safety improvements in Bangladesh’s apparel sector and sustain them over the long haul? Past research by the NYU Stern Center for Business and Human Rights suggests that firms should assume greater financial responsibility for addressing safety issues impacting their supply chains. As the Center noted in its first report, issued in 2014, the requirements of the two initiatives placed factory owners in a “Catch-22.” Although factories covered by the Accord and the Alliance must comply with safety requirements to maintain their business relationships, no clear system exists to help them finance the costs of required remediation efforts. International donors, meanwhile, have invested primarily in training, inspection, and empowerment programs, as opposed to tackling far more costly infrastructure repairs. 

Taking on such responsibility will require foreign brands to not only invest more heavily in remediation but also reexamine their business practices. Even as brands press for improved factory safety standards, they are simultaneously encouraging their suppliers to produce orders faster for less money. Amid competition from cheaper manufacturers in Southeast Asia and Ethiopia, factories are engaged in a race to the bottom on lead times and prices. This leaves garment factories with scant funds to finance improvements or secure the loans necessary to do so, even as their employees endure chronic overtime. 

The Center’s past research also points to the importance of acknowledging the scope of indirect sourcing and informality. As of March 2017, 2,256 factories have remedied or are currently in the process of remedying their working conditions under the Accord and Alliance. These factories employ 3.2 million people. Yet indirect suppliers not covered under the two initiatives employ another 1.9 million garment workers producing for export. Efforts to upgrade factory safety across the entire Bangladeshi garment industry must encompass these indirect and informal suppliers, whose workers are especially vulnerable to safety violations and labor rights abuses. 

As the Center has emphasized previously, a shared responsibility model could enable relevant stakeholders, including foreign brands, local manufacturers, and the government of Bangladesh, to establish an equitable formula for allocating remediation costs and following through with remediation financing. Although the Accord and the Alliance will come to an end in July 2018, the Center’s research suggests that hazardous working conditions will remain the norm after both programs expire. Further investments and carefully designed cost-sharing arrangements will be necessary to address workplace issues that remain and sustain safety gains.

 

Zoe Rubin serves as a Gordon Grand Fellow with the Center. She previously conducted research on foreign domestic workers’ vulnerability to exploitation and abuse in Hong Kong. She holds a B.A. in History from Yale College.