Low-cost goods often come at the expense of workers, who labor in unsafe conditions, receive unsustainably low wages and have no collective bargaining rights. Perhaps nowhere is this more clearly illustrated than in Bangladesh’s ready-made garments industry. Here, ICCR's David Schilling addresses the virus's collateral damage.
The 2012 Tazreen garment factory fire and the April 2013 Rana Plaza building collapse together resulted in the deaths of over 1,500 garment workers.
Background:
Ten years have passed since the collapse of the Rana Plaza building in Bangladesh, and we are reminded of the human rights risks inherent in outsourcing apparel manufacturing to factories with inadequate safeguards to protect workers. The jobs of 4.1 million garment workers also continue to be threatened, as global brands have either delayed payment of or canceled billions of dollars in orders, due to the COVID-19 crisis.
The Bangladesh Investor Initiative, organized by ICCR in May of 2014 in response to the tragic collapse of the Rana Plaza building outside Dhaka, has encouraged apparel companies to sign The Bangladesh Accord on Fire and Building Safety, a multi-stakeholder initiative that includes global brands, trade unions, civil society organizations and a representative of the International Labor Organization as the independent chair. Accord signatories agreed to binding commitments to make the changes necessary to ensure worker safety.
In the past decade, the Accord has successfully established safer factories in Bangladesh for over two million workers through unprecedented collective action.
The days of voluntary CSR are fading, now replaced by a combination of mandatory human rights due diligence laws and regulations. For ten years, the Bangladesh Accord has proven that legally binding agreements anchored to a governance structure comprising trade unions and companies with authentic worker engagement and effective grievance mechanisms are the best recipe for meaningful, long-term change. Meanwhile, the global regulatory landscape has continued to evolve, leading to a growing number of initiatives advocating corporate respect for human rights. Notably, in January of 2023, the International Accord for Health and Safety expanded to supplier factories in Pakistan, a move widely welcomed by investors.
Timeline
In April of 2013 nearly 1,200 garment factory workers lost their lives in the Rana Plaza building collapse and Tazreen factory fire. ICCR moved quickly to organize a coalition of over 250 institutional investors from twelve countries with over $4.5 trillion assets under management, to promote reform of the global apparel sector to guarantee the safety and well-being of workers.
On April 24, 2014, the coalition issued a public statement calling for renewed support for the Rana Plaza Trust Fund, established to help victims of the disaster rebuild their lives.
ICCR members and staff had the opportunity to meet with members of the Accord Steering Committee in New York City on October 15th, 2015. This productive conversation focused on key themes central to ICCR's Bangladesh Initiative. As a follow up to that meeting, and in continuing the work of the Initiative, ICCR has sent this letter to the Steering Committee to acknowledge the immense progress made by the Accord in Bangladesh, but to also reiterate that there is still work to be done. The speed of remediation for factories inspected under the Accord and the establishment of health and safety committees comprised of worker representatives, without interference of management, is critical to the legitimacy of the agreement and progress going forward.
On April 21, 2016 - the 3rd anniversary of the collapse, the coalition issued a press release and public statement focusing on the promising progress made in Bangladesh during the past three year and key areas where more steps needs to be taken.
Said David Schilling, ICCR Program Director, “We believe it is critical that all Accord signatories take serious action to overcome any obstacle to timely remediation since the health and lives of workers are at stake.”
On September 10, 2016 a boiler exploded at the Tampaco Foils Ltd. factory in Bangladesh causing a fire and building collapse that took the lives of 35 workers and injured over 50 more. Two major companies—British American Tobacco (BAT) and Nestle--have a business relationship with the Tampaco factory to package their products. An investor statement coordinated by ICCR has called on the two companies to commit to:
- Comprehensive fire and safety inspections that include thorough inspections of boilers.
- Worker training on fire and safety procedures and worker/management safety and health committees.
- Compensation to the workers injured and to the families of those killed at Tampaco, following the model of the Rana Plaza Donors Trust Fund.
Sixty-six investors with over $2.3 trillion in assets under management signed the statement. Investors have requested dialogue with BAT and Nestle to get their responses to these recommendations.
In January of 2018, the Initiative welcomed the legally-binding 3-year extension of the Accord for Fire and Building Safety. Their letter was endorsed by 147 global funds representing $3.7 trillion in assets.
On April 23, 2020, ICCR highlighted the collateral damage COVID-19 is causing the Bangladesh garment sector, and articulated 4 key steps global brands can take to protect workers.
On April 22, 2021, a coalition of 180 investors with over $3.7T USD in AUM organized by ICCR's Bangladesh Initiative issued a statement cautioning against allowing the Accord to expire.
On April 20, 2023, a coalition of nearly 200 investors organized by ICCR's Bangladesh Initiative issued a statement calling on companies to prioritize worker health and safety in supply chains.