‘Fashion Victims’: Rana Plaza and the response from Business.

In THIS post last week, I outlined and posted a link to the Four Corners program story ‘Fashion Victims’, on the horrific Rana Plaza collapse in Bangladesh on 24 April 2013.

As you are probably aware, the issue of exploitative labour practices in the apparel industry is not new. What this devastating collapse did was once again point the spotlight on unethical outsourcing in the fashion industry – and place well earned pressure on Western retailers to be more accountable in regards to the treatment and safety of the real life people who make their business operations and profits possible.

Following the Rana Plaza collapse, a few Australian retailers announced plans to sign on to the Accord on Factory and Building Safety in Bangladesh – initially signed in May this year. This is a five-year legally binding agreement between international labour organizations, non-governmental organizations (NGOs), and retailers in the textile industry, to maintain minimum safety standards in the Bangladesh textile industry.

Other than safety auditing practices, signed-on retailers must provide enough money for Bangladesh manufacturers to maintain safe buildings, and to continue to support the textile industry there even with higher costs. All this necessitates cooperation with the International Labour Organization, and the government of Bangladesh. You can read the accord HERE.

The big Australian retailers who have expressed “intent to sign on”, or similar:

KMart (announced 7 June 2013)

Big W (announced 7 June 2013)

Forever New (11 June 2013 to 4 Corners, said they had “put steps in place to join the international Bangladesh Fire & Safety Accord”)

Target (20 June 2013)

Coles told Four Corners it only had one small order remaining for their Mix clothing range, and that after that was complete, it had “no further plans” to source from Bangladesh. It said that, if that plan changed, Coles would “be prepared to sign the Bangladesh Safety Accord.” Globally, big retailers that signed on to the Accord include the Cotton On Group and Benetton (Benetton order sheets were found in the Rana Plaza rubble).

As for MANGO (whose dishonest response to the disaster is documented in the Four Corners story), they signed on too, but not before coming out with this garbage: “It would have been impossible to detect the structural defects of the collapsed building. Mango would not have been able to ascertain the owners had built three more storeys than is permitted”.

It is generally understood that retailers have been drawn to outsource to Bangladesh because of how cheap labour is there. But I wonder – is that even a good business strategy?


Back in April, AMP Capital were advising investors that they did not see transferring sourcing to Bangladesh, in many cases, as a sustainable strategy, and instead advised that building sustainable supply chains with long-term relationships with suppliers would be the more successful long term strategy. Why? A few reasons. One is that, due to increasingly consciousness amongst consumers (in an already weak consumer market) about the social and environmental impacts of their buying habits, the exposure of exploitation of workers can lead to brand damage and, hence, revenue loss.

Beyond that, exploitation, from a purely financial perspective, has a very poor risk/reward ratio. For example, underpaid labour can lead to poor productivity, high factory worker turnover, industrial action, supply chain disruptions and product quality issues in the short term. In the long term, wages that don’t cover the basic living expenses of workers, other than being cruel and disgusting, are just not sustainable. Moreover, an aggressive focus on profit puts pressure on suppliers, which in turn often leads to more sweatshop issues and subcontracting – which threatens to produce even more quality and sweatshop risks.

Businesses also take into account infrastructure issues of the countries they source from (of which Bangladesh has many, like reliable energy supply and transport issues). These can result in production disruptions and longer lead times. Simply relocating to a country because it has low labour costs isn’t such a good idea if, say, a large proportion of the input materials have to be imported from some other country. There are so many other costs and risks that erode the profit margin for these guys – the total cost of goods sold and moving production around to take advantage of lower labour costs might not produce great returns after all.


The way retailers decide which sourcing strategies to pursue is, of course, economically complex – albeit simply motivated (PROFIT). I think it is, however, important for consumers to be aware, at a basic level, of how retailers they may purchase from are doing business – who they source from, what kind of auditing practices they are complying with, etc. That is something I think we can all get a basic grasp of.

As a humble consumer, what I am interested in these days is doing business with retailers and clothing companies who are making ethical garment sourcing a key part/priority of their long-term practice – as ethical consumption gradually becomes part of my own long-term practice. Personally I have no qualms with overseas outsourcing, but I want to know that every effort is being made to ensure that production Workers are being paid adequately, and are carrying out their work in safe working conditions.

In my next two posts on this issue, I’ll investigate how one becomes an ethical consumer, options for ethical consumption, and the activists and organisations who are uncovering and advocating for the fair treatment of workers in the garment industry internationally.


 I listen to this song about once a fortnight (still. Album just soothes me). I had forgotten, until yesterday, that Radiohead made a video clip for it for MTV’s EXIT (End Exploitation and Trafficking) Campaign. The story is depicted in split screen: one side depicting a day in the life of a young child from an affluent, developed area; the other showing the day in the life of a child being forced to work in a sweatshop:



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