American and European Union retailers will help only their suppliers in Bangladesh to improve safety standards, leaving over 400 factories without any support.
Out of a total of 2,425 active factories, the EU retailers will cover around 1,200 factories and the US more than 800 factories for drawing up safety standards, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
The factories not covered by the retailer inspections might create future unrest in the industry, and adversely affect the economy as well, analysts say. Authorities need to devise a mechanism to come out of the woods, they said.
Seventeen US retailers and clothing manufacturers including Wal-Mart, Gap, and JC Penney on July 10 announced a pact to improve safety conditions at garment factories in Bangladesh. Just days before the US retailers, 77 mostly European retailers reached an accord to a similar purpose but with a different operational plan.
Both attempts are geared at preventing recurrences of the Rana Plaza collapse in April that killed over 1,100 workers. They include five-year commitments by multinationals to perform factory inspections, drawing up common safety standards, providing information sharing and better worker training, all of which is underpinned by financial support.
The retailers plan to inspect all of their suppliers in Bangladesh and form worker committees to which workers can report safety concerns without worrying about reprisals from managers.
“The situation will improve only marginally unless the riskiest subcontract factories are taken into account,” said Rubana Huq, managing director of Mohammadi Group, a large manufacturer that supplies retailers such as H&M, Zara, Wal-Mart and Esprit.
“So far as I know, global buyers will help only their suppliers to improve working conditions in their factories,” she said.
“If we do not take the responsibility of the subcontract factories, many people will become unemployed, leading to a negative impact on the economy,” said Huq whose company has already cancelled subcontract work that has left 2,000 people unemployed over the last two months.
“But subcontractors exist and will exist in the future too,” she said.
Political unrest, poor infrastructure and pressure to meet the deadline usually force many garment exporters to resort to subcontracts. There are several hundred non-BGMEA member factories engaged in subcontract work.
The country’s worst industrial accident took place in subcontract factories housed in the eight-storey building - Rana Plaza, which killed 1,129 people. A number of major western retailers, including British high street giant Primark, were being supplied by factories in the building.
In November last year, Tazreen Fashions in Ashulia was gutted in fire, killing 112 workers. Tazreen was manufacturing garments for the US retail giant Wal-Mart under a subcontract from a local firm.
Another factory, Smart Export was executing orders on a subcontract for brands – Bershka and Lefties – owned by the Spanish retail giant Inditex when a fire broke out on January 26.
Former BGMEA president Anwar-ul-Alam Chowdhury Parvez said: “If we fail to ensure safe working conditions in the riskiest factories, it will create chaos and unrest.”
“A uniform safety standard plan is needed for all factories in the country,” he said. The inspection teams should include members from the government, BKMEA and BGMEA to put things on the right track.
BGMEA Vice-President (finance) Reaz-Bin-Mahmood said factories not covered by the global retailers might be financed by donor agencies like Jica to improve working conditions.
Japan International Cooperation Agency (Jica) has promised to provide Tk1bn through Bangladesh Bank to help improve working conditions in garment factories. However, the money should be disbursed at a reasonable interest rate instead of the existing 10%, he said.
