Large garment retailer strives to mitigate production cost has led to the growth of Ready-Made Garment (RMG) Industry in Bangladeshi. Both low safety regulation and poor working conditions of the supply chain (SC) have resulted in the Tazreen factory fire in 2012 and the collapse of Rana Plaza in 2013 with over thousands of deaths. These have focused global attention on SC unsafe working conditions in Bangladeshi. Directed to Labor Rights which can be seen as a subset United Nation’s (UN) Declaration of human rights. For instance, “Article 23; the right to desirable work and join the trade union, and Article 24; right to rest and leisure.” (United Nation) International Labor Organisation (ILO) has developed an international labor standards on behalf of labor rights. “We aimed at promoting opportunities for women and men to obtain decent and productive work, in conditions of freedom, equity, security, and dignity.” (ILO)
This essay argues that huge garment retailers; Walmart, are expected to be responsible yet accountable to a certain extent for the practice of labor rights among supply chain including subcontracted factories. The Alliance for Bangladesh Worker Safety (The Alliance) and The Accord on Fire and Building Safety in Bangladesh (The Accord) were the two major initiatives launched by retailers shortly after the tragedy. On the other hand, The Transparency Pledge is not supported by the retailer due to the fear of revealing their propriety information. In fact, there are more than the retailer to blame. As consumer share an equivalent responsibility while purchasing from sweatshops. Pressure is also mounted on the government’s supervision. However, outsourcing brought with it a host of new regional challenges such as different expectations with regard to health and safety and environmental regulation.
“We thought we were going to die and we were saying goodbyes to each other” (Khalida, Rana Plaza factory worker)
On the same day morning before Rana Plaza collapsed, “it was reported that 3,639 workers refused to enter the factory due to a major crack in the wall.” (Larry Cata Backer) However, factories owner who prioritized shipment over labor rights hired gang members to beat the workers with sticks and force them to work. Under of the violation of labor rights, workers are being paid thirty-two cents per hour to work in an illegally constructed building which has caused over thousands of lives. It is devastating for people to die that way. In SC, the global concern of labor rights has been drawn specifically to the working conditions including wages, safety and freedom from harassment.
In order to prevent the similar tragedy, The Alliance was set up by twenty-nine North American retailers voluntarily including Walmart while The Accord has over one hundred eighty companies as European members, including Benetton and Mango. The former is committed to fire and building safety, however, it is not legally binding and membership can be terminated anytime. The latter has a commitment to maintain long-term sourcing relationship with the main suppliers under the conditions that they have met certain fire and safety regulations.
Walmart in The Alliance
Drawing Walmart as a case study, the RMG industry has been highlighted as the archetypal buyer-led supply chains which multi-national brand exceed a downward pressure on their suppliers. The company has made a statement by joining The Alliance with other twenty-eight companies. The company is particularly active in collaborating with other firms on engaging in the role of training in promoting factory safety and fire safety regulations. https://corporate.walmart.com/our-commitment-to-the-workers-of-bangladesh
By joining The Alliance, Walmart has successfully helped over 900 factories setting up a helpline for anomalously to report the safety issue. Besides, over 1.4 million factory employee is being trained with safety knowledge. Factories electrical and fire suppression system has been upgraded since the tragedy. Over 80% of the workers in RMG industry are female, Walmart has contributed to a woman factory training program as well. On top of that, the company has donated 1.6million to support Environmental, Health, Safety (EHS) Academy in Bangladesh. As a result, more apparel manufactures gained access to high quality, affordable and comprehensive training. Partnering with the government, trade unions, and employers, The Alliance’s ultimate goal is to sustainably improve workers safety in the RMG industry with five measurements; Standard and Inspections, Remediation, Worker Empowerment, Training, and Sustainability.
Walmart Codes of Conduct (CofC):
It is a legal document drafted that MNC requiring their supply firms including sub-contractor to contractually agree and meet their codes of conduct. It allows them to set up different boundaries according to reality as there is no such “one size fits all”. Walmart has promoted a responsible sourcing program of their own. It is being developed under four major measurement; setting expectations for the supplier, auditing and monitoring, training, and promoting responsibility.
Referring to the issue earlier that workers are either beaten up or threaten to work in Rana Plaza. Walmart has emphasized on “refining from corporal punishment, harassment, threatening behavior and abuse, including when imposing discipline.” (Walmart) Besides, according to Walmart’s standard for supplier report, they require the suppliers to “be aware of involuntarily labor, such as migrants, women, and young people”. (Walmart) Besides, fire safety regulation has clearly indicated that “factories that fell within serval high-risk categories were asked to shift production to other facilities.” (Walmart)
“The initial inspections were conducted by international engineering firms contracted by the Accord.” (The Accord)
The Accord has covered more than one hundred eighty brands, mainly European. By gathering them, it allows them to share cost, information, and responsibility which provides an effective way that allows smaller brands to contribute as well. Disappointedly, there seems to be a lack of support from the North America retailer such as Walmart and Gap. According to Christy Hoffman, deputy general secretary of UNI Global Union, Gap was concern about the legally-binding nature of the terms. Without a doubt, it shows that the firm is not ready to commit to improving SC at a certain level. Although Gap was not linked to Rana Plaza, it is currently working with over eighty factories in Bangladesh. On top of that, their garment was found in the Tazreen factory fire in 2012. Also, private labor standard has proliferated in the textile sector, but they lack The Accord’s ability to coordinate multiple approaches, leading to competition and lack of coordination. (Fransen, 2011)
Responsibility VS Accountability:
“ Labor rights are universal and inalienable.” (International Labour Rights Forum)
Responsibility is considered as the MNC’s own will; voluntarily, thus it is not restricted by law. However, with the prevalence of developed country’s national protections policies, workers in third world country like Bangladesh has been a victim of the rise in global supply chain due to the violation of labor rights. The very fact that MNC now have a huge influence on employment rights, supply chain, and even a country’s GDP has drawn global attention to the corporation accountability. According to the Clean Clothes Campaign, the garment retailers have hired in total of over three million people, which accounts for twelve percent to Bangladesh’s GDP. If MNC is accountable for labor rights in SC they will have to take it a step further. “It implies rights of authority, which includes the right to demand answer and impose sanctions.” (Mulgan.R,2000)
need to have transparency in order to be accountable
Subcontractor VS Transparency Pledge:
After the tragedy in Rana Plaza, there was virtually no public information available regarding the apparel company sourcing from the factories involved. As most of the suppliers are subcontracted or sub-subcontracted in some cases they are even unauthorized. Indeed, Locals have to search through rumbles to look for garments with brand tags. According to Walmart’s director in the international corporate affair, unauthorized contractors can “make it difficult to audit and confirm our suppliers are adhering to the standards we insist are upheld.” Whiteout a doubt, transparency is the key to tackle certain limitation. However, historically supplier list has been considered as proprietary information to MNC. While in other cases, Walmart refused to sign the transparency pledge due to their own existing transparency mechanism. This has left us with a question that with a certain responsibility that Walmart has taken up by implementing their own measurement, it may not be enough. Though the pledge does not contain an enforcement mechanism, once an MNC has signed the agreement it will lead to a greater accountability.
Consumption Based Actors and Social Movement Organisation
“Online campaign group such as SumOFUS helped raise consumer awareness and exert consumer pressure through online petitions against companies to sign the Accord, such as Walmart in the US.” (cite)
The purchasing power of consumers can be conceptualized with The Exit, Voice, and Loyalty Framework (Hirschman’s, 1970). Consumers have a choice to boycott retailers, filing complains or remains as a loyalty customer. With the rise of social movement organizations including faith groups and human rights activists, for instance, Clean Clothes Campaign. These voluntary organizations have mobilized consumers with concerns on the current situation in a global supply chain. By encouraging consumers to sign petitions and wear campaign badges they hope to raise the organization alert. The consumer can, therefore, act as a force to implement pressure on MNC to take on more responsibility for labor rights in SC.
As to conclude, large US retailer such as Walmart has the responsibility to ensure the existence of labor rights in SC. In fact, retailers have been doing so by either joining The Alliance or The Accord. However, by drawing attention to our case; Walmart, it is likely that they can take it one step further. US retailer such as Walmart and Gap should join The Accord which legally binding and takes more accountability in. Though significant process are made by Walmart with their responsible sourcing program, it is
Besides, by signing the Transparency Pledge, pressure is mounted on when they are selecting supplier and sub-contractor. It is less likely for them to be price driven as SC factories have to meet certain safety and fire regulation. “Cheap labor is what Michel Porter calls a ‘lower order’ competitive advantages, since it is an inherently unstable basis on which to build a global strategy.” (Gary G. and Miguel K)