Part One: Introduction

Part One: Introduction An Unspeakable Disaster It has been five years since the horrific collapse of a Bangladeshi garment factory complex called Rana Plaza. The dead numbered 1,134, mostly young women; the injured, some 2,500. It was the worst accident in the history of the apparel industry and one of the deadliest industrial disasters of any kind. This report marking the fifth anniversary operating on floors three through of Rana Plaza describes the economic eight produced t-shirts, pants, and forces that contributed to the catastro- blouses for such Western brands phe and evaluates what has happened as Benetton, Bonmarché, Joe Fresh, since. It then charts a path toward a Mango, Primark, and Walmart. Called Bangladesh deserves safer and more secure future for the to the scene, a local engineer declared Bangladeshi garment sector. the building unsafe. Police ordered it attention, not only because“ emptied pending further inspection. it ranks as the world’s Bangladesh deserves attention, not But the owner, Mohammad Sohel only because it ranks as the world’s Rana, insisted that, despite indications second-largest clothing second-largest clothing manufacturer, his building had begun to come apart, behind only China, but because the manufacturer, behind only all was well. Factory managers ordered human rights concerns affecting its employees to return the next day or China, but because the workers also affect workers in garment- risk losing their jobs. manufacturing countries around the human rights concerns world. Since the 2013 disaster, Most did return. Just before 9 a.m. affecting its workers also Bangladesh has served as a laboratory on April 24, a power outage stopped for international brands and retailers, work. On the upper floors, diesel affect workers in garment- unions, and civil society organizations generators weighing several tons seeking to address factory safety. One apiece rumbled into action. Vibrations manufacturing countries of the central questions posed by this rippled downward. Built illegally, the around the world. report is whether Bangladesh offers top four floors lacked necessary support lessons for protecting human rights in walls. The building’s foundation rested global supply chains for apparel and on swampy ground that compromised other goods. We conclude that to a its integrity. Destabilized by the degree it does, but the experiment is generators, the entire structure incomplete, and more work needs to crumpled inward, story by story, ” be done. creating a nightmare pile of concrete slabs, shattered columns, mangled Before looking at the responses to sewing machines, and crushed bodies.4 Rana Plaza or the industry’s future, the disaster itself warrants recalling. Rana, the owner of the fatally flawed building, made a run for the Indian On April 23, 2013, workers at the border, but Bangladeshi authorities massive eight-story structure on the caught up with him four days later. outskirts of Dhaka, the Bangladeshi So far, he has been sentenced to three capital, noticed deep cracks forming years in prison on corruption charges in the building’s walls and support and still faces prosecution for murder. pillars. Five separate factories FIVE YEARS AFTER RANA PLAZA: THE WAY FORWARD 5 Blame also shadowed the Western International Responses fashion brands and retail chains that patronized Rana Plaza’s factories— and Their Limitations Whatever the precise and thousands of other manufacturing To their credit, Western brands and facilities in Bangladesh. The catastrophe number of garment-“ retailers responded swiftly to the humani- raised anew questions first posed in tarian and public relations crises of April exporting factories in the 1990s about the global garment 2013. Within months, they formed a pair industry’s responsibility for working Bangladesh—the figure of unusual initiatives—the European-led conditions in places like Dhaka: Accord on Fire and Building Safety in shifts as facilities open By driving down prices they pay to Bangladesh and the American-led suppliers, do corporations such as Alliance for Bangladesh Worker Safety— and close—we remain Gap, Walmart, and Inditex create designed to get garment factories up to incentives for factory owners to convinced that existing international standards. The initiatives scrimp on safety and put worker were different in some important inspection and remediation lives at risk? How far would Western respects, such as the involvement of companies go to please consumers regimes are not sufficient European-based trade unions and in the United States and Europe who non-governmental organizations in the to protect all of the demand ever-cheaper casual clothes? Accord. But they shared the basic goal And in a country such as Bangladesh— country’s workers. of leveraging the economic power of whose economic fortunes turn on the member companies to see that factories success of its apparel sector, but whose were inspected and then made safe. government so far has proven unable Bangladeshi suppliers that refused to or unwilling to protect workers—how comply with the process faced a can foreign corporations ensure the draconian punishment: being cut off safety of supply chains made up of ” by the participating Western buyers. factories they don’t own or operate Nothing quite like this had been tried to prevent more Rana Plazas? before, certainly not at this scale. How Bangladesh Stacks Up Globally Top clothing exporters*; US$ billion and (percentage of merchandise exports)+ China $161 (8.0%) Bangladesh $28 (80.9%) Vietnam $25 (13.0%) India $18 (5.5%) Hong Kong $16 (3.9%) Turkey $15 (10.6%) Indonesia $7 (4.4%) Cambodia $6 (54.3%) USA $6 (0.4%) 050 100 150 200 *2016 statistics, most recent available; +2014 statistics Source: World Trade Organization 6 FIVE YEARS AFTER RANA PLAZA: THE WAY FORWARD The foreign initiatives have improved Other researchers at such institutions conditions in many factories. They are as Pennsylvania State University have not, however, panaceas. In two earlier contested NYU Stern’s analysis, Western brands gravitated reports, published in April 2014 and estimating that the figure is between December 2015,5 the NYU Stern Center 4,000 and 5,000.9 “to Bangladesh because for Business and Human Rights pointed out some of their built-in limitations. Whatever the precise number of export of its extraordinarily low The chief constraint is that between them, factories in Bangladesh—the figure prices, which over time the they now cover only about 2,300 shifts as facilities open and close— active factories serving their member we remain convinced that in the long brands drove even lower. companies. The Bangladeshi government run, existing inspection and remediation separately retains oversight for another regimes are not sufficient to protect all of 1,650 or so. But that total of nearly the country’s workers. This conclusion seems self-evident, as the industry- 4,000 leaves out thousands of additional What made Bangladesh successful as backed programs initially were designed factories—and their workers. a supplier of casual fashion, however, to last for only five years. The Alliance ” has also historically made its garment Many of the left-out factories primarily is essentially phasing out in 2018. business dangerous. Western brands do subcontracting work and don’t have The Accord has announced it will gravitated to Bangladesh because of direct relationships with the large continue provisionally for up to three its extraordinarily low prices, which Western buyers, which often are not additional years, through 2021. Once over time the brands drove even lower. even aware of the subcontracting of their the foreign-funded programs pull Rock-bottom prices reinforced low orders. “Unauthorized subcontracting is out, the Bangladeshi government will wage levels and translated into paltry a significant challenge in Bangladesh’s inherit responsibility for all factories investment in factory safety. Even before [garment] industry,” the U.S. Senate and workers, despite widespread Rana Plaza, Bangladeshi garment Committee on Foreign Relations said in a concern that it lacks the resources facilities were perilous: Between 2005 report in November 2013. The committee and determination to meet the need. and 2012, more than 500 workers died went on to describe “unknown factories in fires and building collapses.11 that operate in the shadows” and are The Deeper History of a “often the most dangerous in terms of To understand how apparel making 6 worker safety.” While some subcontrac- Vital Business evolved into such an economically vital tors have closed down in recent years but often-hazardous business, one has to The ready-made garment sector, or RMG, because of greater vigilance by Western go back to the decade after Bangladesh’s as the industry calls itself, has fueled the companies, others have opened, and the War of Independence in 1971, when Bangladeshi economy for three decades. practice remains common. Networks of the country broke away from Pakistan. With annual sales now exceeding $28 subcontractors play a vital role in helping The Bangladeshi military, which took billion, the sector generates 80 percent larger mother factories handle the ebb over by coup in 1975, reversed an initial of Bangladesh’s export revenue and and flow of export orders. Operating on move toward socialism and instead employs close to five million people. very slim margins, subcontractors also encouraged private enterprise and Since the mid-1990s, it has helped help maintain low production costs. foreign investment. Later in the report, we describe our propel, on average, a 6% overall annual recent visits to subcontracting facilities. growth rate. Despite a reputation for Bangladesh wasn’t an obvious place government corruption, monsoon- to start a new industry. Its roads were In part because of uncertainty over the season floods, and rural destitution, poor, its electrical grid unreliable; it number of subcontractors, there isn’t a Bangladesh actually presents a case lacked raw materials and a deep-water consensus on how many factories in study of successful development.

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