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Expert Insight: Gilmore's Daily Jab
By Dan Gilmore
Date: June 18, 2013

What Took So Long for Bangladesh and Pakistani Apparel Supply Chain Issues to Rise to the Surface?

 

Decades after Criticism of Nike and Its Supposed Sweatshops, and No One Knows What is Happening at Offshore Suppliers? Turning a Blind Eye

Did we fall into a time machine and slip back into the 1990s somehow?

Nike was first accused of having terrible labor conditions in its outsourced manufacturing locations in Asia as far back as the 1970s, but the heat really was turned up in 1990s, with the charge often around Nike clothes being produced in Asian "sweatshops."

Initially, Nike's defense was that it didn't own the factories, so what could it really do?

That attitude started to change by the decade's end. In 2001, Nike's Todd McKean stated in an interview that the "initial attitude was, 'Hey, we don't own the factories. We don't control what goes on there.' Quite frankly, that was a sort of irresponsible way to approach this. We had people there every day looking at [product] quality. Clearly, we had leverage and responsibility with certain parts of the business, so why not others?"

So at one level, since then many in the apparel sector (brands and retailers) had seemed to make progress, and certainly pledged to do so in Sustainability reports, industry presentations and more. I have no doubt progress was indeed made.

Yet despite that, late last year saw a fire in a apparel shop in Pakistan that was apparently a disaster in the making given conditions there, a tragedy that killed 112 (those conditions included many fire hazards inside and rooms with no exists or padlocked doors). More recently, a building housing several factories in Bangladesh collapsed, killing more than 1200. That was a few hours after the building was evacuated by inspectors, but company managers then ordered workers back inside - customer orders were due.

Now, a new report from the Associated Press says that after an inspection of scores of apparel factories in Bangladesh, the conditions of many other apparel facilities are not good.

"Bangladeshi garment factories are routinely built without consulting engineers. Many are located in commercial or residential buildings not designed to withstand the stress of heavy manufacturing. Some add illegal extra floors atop support columns too weak to hold them," the report said.

Now of course, a group of European retailers, Walmart, and the Bangladeshi governments have each launched inspection programs and claim to be throwing lots of money at the problem to help get factories up to snuff.

So no one noticed this problem in Bangladesh until now? The buyers and their agents never noticed the buildings looked ready to collapse?

Maybe most of these brands and retailers didn't truly know the scope of the dangers in these offshore factories, but clearly part of that must have had to do with turning a blind eye to conditions to get the price and delivery needed, despite all the wonderful things many are saying they are doing in their Sustainability reports.

I mean, 20 years after Nike and the sweatshop criticism, and no one even looks at factory safety in low cost countries?

To be fair, part of the issue apparently is that sub-contracting in the apparel sector is rampant. When it turned out that the fatal factory in Pakistan was making garments for both Walmart and Sears, each claimed this this was news to them. That factory had been given a contact by the prime supplier, a common occurrence as volumes for big chain orders can be huge, with tight delivery windows simply beyond the capacity of individual garment makers.

But the brands and retailers knew what was happening with that subcontracting, and that primary suppliers couldn't possibly fill new orders on their own - the blind eye, as I said.

Jahangir Alam, an officer for ethical sourcing at Walmart's office in Dhaka until late last year, told the Wall Street Journal in late 2012 that "with multiple subcontracts going on, it has become almost impossible for buyers to practice ethical sourcing in the true sense."

In other words, this issue was known and largely ignored.

In fairness, manufacturers and governments in Bangladesh were turning a blind eye too, as business roared into the country in recent years, pushing its exports up to some $18 billion annually, representing more than 70% of the poor country's total.

Said Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association last week: "Earlier it [factory building conditions] was not in our minds. We never, ever thought of this."

So, Walmart and others are taking actions, but it sure seems a lot more reactive than proactive. And I am fine with saying Western consumers are in part to blame, unconcerned about where the clothes are made and what the conditions might be there, as long as we like the style and the price. I never used to think about it either. I am now.

I did a lot of work in the apparel belt back in the early 1990s, and there were so many factories across the Carolinas, Georgia and Alabama. I assume most or nearly all are gone today, replaced by ones in China, Bangladesh, Vietnam, India, maybe soon Africa.

I am actually not some zealot in this area by any means. I think there are some times when having children work in these apparel factories, under reasonable conditions and limits, to help bring in some more income to the family, is just fine. That is not that different from the work my great grandparents and many of your great grandparents did on family farms not all that many years ago.

My point in the end is this. If the Sustainability reports and rhetoric are to be believed, then these dangers in factory conditions and sub-contracting risks should have been identified years ago. I have not heard anyone state why they were not, or if they were, why no action was taken.

And I just wonder if anyone is looking at these same types of issues in Cambodia or Vietnam instead of just Bangladesh. Or we need another disaster to start the chain of action there?

And while many of us (including me) often blow off the warnings and criticism of various human and workers' rights types, maybe we should give them more consideration.


Let me know your thoughts at the Feedback Button below.


 

Recent Feedback

Your answer is obvious; there is no ROI in responsible sourcing.   All of the incentives promote willful ignorance in the service of increasing profits and market share. I was at a food conference recently where one of the keynote themes was ”Food safety should not be a competitive advantage”, highlighting companies (like Earthbound and others) that share their research and innovations with the industry. One speaker got up later and said, “That’s true, unfortunately blindness and irresponsibility are an advantage, allowing companies to offer lower prices and gain market share.”   

This is equally true in apparel, consumer electronics and other industries where price is everything. Until you see CEOs’ comp plans with significant bonus for “0 worker injuries at supply chain partner sites” and similar measures, nothing will get fixed.


Bill Alrich
Not Provided
GSQA
Jun, 20 2013

As one of those “human and workers’ rights types,” I’d like to welcome you to the party.  I have been working on the Nike sweatshop issue in Indonesia for 15 years now and I can tell you that nothing of significance has changed, regardless of what Nike tells you in their CSR report.

I hope you will keep pushing on this issue.


Jim Keady
Director
Educating for Justice, Inc.
Jun, 20 2013

"Responsible but not guilty" was claimed couple of years ago by a French Minister. This is more or less what I feel reading your article. From professional point of view, buyers should be bold enough to do their job even if it means sometimes taking a risk and going against the management requirement. From a personal point of view, looking for a job for a while clearly changes the way I consume. Before, I paid attention to where goods came from, and now I'm much more interested in looking at the price today even if...I know!


CARTIGNY-FINCK
Supply Chain Manager
Seeking for new opportunities
Jun, 21 2013
profile About the Author
Dan Gilmore is the editor of Supply Chain Digest.
 

Gilmore Says:


Clearly part of that must have had to do with turning a blind eye to conditions to get the price and delivery needed.


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