Bangladesh Garment Industry

Power Imbalances and Sourcing Squeeze in Global Supply Chains

• Large agricultural corporations like Chiquita and supermarket chains like Walmart have monopolized the purchase of food products, leading to a squeeze on prices paid to farmers and workers.
• Changes in the retail industry contributed to the consolidation of buyer leverage at the top of apparel supply chains, displacing smaller retail outlets.
• Trade liberalization and China's entry into the WTO led to major restructuring in the global apparel industry, forcing countries to push down production costs.
• The consolidation of buyers and dispersion of suppliers resulting from changing trade rules has increased power imbalances in apparel supply chains.
• This imbalance resulted in a 'price squeeze' where buyers constantly seek to lower the price paid to suppliers and a 'lead time squeeze' where buyers demand shorter production periods.
• Most apparel production occurs in countries with the highest violations of freedom of association, and the decline in respect for workers' rights corresponds to a decline in the real dollar price paid for apparel imported into the United States.
• Women and girls are particularly affected by these trends in global supply chains.
• Prevailing wages in major apparel exporting countries fail to cover even 50% of a living wage, and many factories fail to pay even the legal minimum wage.
• 52% of supplier factories accepted orders whose price did not allow them to cover their production costs, impacting building safety in global garment supply chains.
• Bangladesh's ready-made garment sector accounted for 76.33% of the country's exports in goods and services and 13.64% of its GDP in 2015, with 4 million direct workers and millions more indirect beneficiaries.
• The sustainability of the RMG sector has a profound impact on the overall economic conditions in Bangladesh and the wellbeing of millions of people.
• Understanding the causes of problems in Bangladesh's garment sector can offer insights into approaches that might work in other countries facing similar challenges.

Workers' Rights and Building Safety in Bangladesh

• Bangladesh has been urged by the ILO to align its labor laws with international standards, especially by allowing unionization in export processing zones and facilitating the unionization process in the RMG sector.
• In December 2016, 1,600 garment workers were dismissed and 34 trade unionists were arrested, leading to pressure from labor rights advocates and international brands to release the detained workers and respect workers' rights.
• The European Parliament passed a resolution in June 2017, highlighting the persecution of trade union leaders and poor working conditions in Bangladesh.
• Violations of workers' rights have increased since 2000, with fluctuations corresponding to export pricing trends.
• Suppliers, the government, and buyers share responsibility in addressing workers' rights violations in Bangladesh.
• The Accord on Fire and Building Safety in Bangladesh has made significant progress in building safety, covering over 2 million workers and involving international brands and retailers in a binding agreement.
• Article 22 of the Accord ensures that participating brands and retailers negotiate commercial terms with their suppliers to maintain safe workplaces and comply with upgrade and remediation requirements.
• The Accord's governance structure includes a Steering Committee comprising representatives chosen by trade unions, company signatories, and an ILO representative, ensuring worker participation and decision-making.
• The Accord has a budget of approximately US$11 million per year and has hired and trained engineers and safety personnel to ensure the safety of factories and workers.
• The Accord has temporarily evacuated 50 factories due to structural safety concerns and terminated 96 factories for failing to implement required safety renovations.
• Building evacuations and recommendations are submitted to the government of Bangladesh Review Panel, with the possibility of being overturned by unanimous decision.
• Accord inspectors had d... (text incomplete)

Workers' Rights and Building Safety in Bangladesh

• Bangladesh has been urged by the ILO to align its labor laws with international standards, especially by allowing unionization in export processing zones and facilitating the unionization process in the RMG sector.
• In December 2016, 1,600 garment workers were dismissed and 34 trade unionists were arrested, leading to pressure from labor rights advocates and international brands to release the detained workers and respect workers' rights.
• The European Parliament passed a resolution in June 2017, highlighting the persecution of trade union leaders and poor working conditions in Bangladesh.
• Violations of workers' rights have increased since 2000, with fluctuations corresponding to export pricing trends.
• Suppliers, the government, and buyers share responsibility in addressing workers' rights violations in Bangladesh.
• The Accord on Fire and Building Safety in Bangladesh has made significant progress in building safety, covering over 2 million workers and involving international brands and retailers in a binding agreement.
• Article 22 of the Accord ensures that participating brands and retailers negotiate commercial terms with their suppliers to maintain safe workplaces and comply with upgrade and remediation requirements.
• The Accord's governance structure includes a Steering Committee comprising representatives chosen by trade unions, company signatories, and an ILO representative, ensuring worker participation and decision-making.
• The Accord has a budget of approximately US$11 million per year and has hired and trained engineers and safety personnel to ensure the safety of factories and workers.
• The Accord has temporarily evacuated 50 factories due to structural safety concerns and terminated 96 factories for failing to implement required safety renovations.
• Building evacuations and recommendations are submitted to the government of Bangladesh Review Panel, with the possibility of being overturned by unanimous decision.
• Accord inspectors had d... (text incomplete)