The collapse of Rana Plaza in Dhaka, Bangladesh, in April 2013 sent a shockwave through the textile and clothing industry. More than 1,100 lives were lost in the incident, and Bangladesh’s reputation as a reliable low cost location in which to manufacture clothing suffered a severe blow in the eyes of consumers and the major brands. In addition, the industry has received a high level of bad publicity with regard to employment practices.
Retailers and brands are, for good reason, increasingly sensitive about their reputations in the eyes of the media, consumers and lobby groups. It is not surprising therefore that some Western buyers have cancelled orders in the aftermath of the Rana Plaza collapse and placed them elsewhere. Moreover, a number of Bangladeshi factories have been “blacklisted”.
Furthermore, sales in the US import market could be negatively affected following a decision by the US government to suspend Bangladesh’s preferential duty treatment under the USA’s Generalised System of Preferences (GSP) scheme, and Bangladesh’s preferential access to the EU could also be revoked if the Bangladeshi government does not take the necessary steps to significantly improve building safety standards and overall labour conditions in the country.
These issues are made especially acute by the fact that the Bangladeshi economy is heavily dependent on the USA and the EU -- which together take 84% of the country’s total textile and clothing exports.
Bangladesh can ill afford to lose the momentum its clothing industry has built up over the years. However, there is a danger that retailers and consumers will view cheap clothing from Bangladesh as coming at too high a cost in human terms, and that they will prefer other countries where costs are low but where similar tragedies have not occurred -- such as Cambodia and Vietnam.
The threat of shunning Bangladesh’s clothing industry is real but is being eased by a series of initiatives set out by Western retailers, non governmental organisations (NGOs) and a number of apparel unions.
The Ethical Trading Initiative (ETI) has announced a health and safety plan for Bangladesh’s garment sector while IndustriALL and UNI Global Union have set out an agreement for addressing the issue of fire and building safety in the industry.
The spotlight is being focused in particular on the responsibility of the leading brands and retailers as it is they who source the goods in question and, at the same time, drive down prices so that they can maximise their margins and satisfy consumer demand for cheap clothing.
The brands are in an especially strong position to improve working conditions as they can insist that safety inspections take place and that essential work is carried out to make factories fit to work in.
Governments and major brands need to work together with suppliers to change the apparel industry into one in which there are safe factories, decent wages and respect for workers’ rights.
However, it is important to note that gains will only be sustainable if the added labour costs are absorbed by buyers as well as manufacturers.
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