Dr Rosaria Burchielli
Co-authored with Dr Annie Delaney, lecturer in management at Victoria University.
First published on The Conversation on 21 May, 2013.
It’s been almost a month since the collapse of the Rana Plaza garment factory in Bangladesh, resulting in the deaths of 1100 garment workers.
Some significant responses from business and governments have since emerged. First, in Australia, our biggest retailers – Woolworths, Coles (Wesfarmers), Myer and David Jones “have distanced themselves” from sourcing clothing in Bangladesh. EU-based retailers – H&M, Primark, Zara and others – have agreed to sign a code to improve safety at Bangladesh’s garment factories, although Australian retailers have refused to sign the code specifically regarding Bangladesh.
The Bangladesh government has said it will “begin allowing garment workers to form trade unions without permission from factory owners".
The human cost of low prices
Kmart promises to “make low prices irresistable”. At Big W, “cha ching” marks the sound of cheaper prices. The loss of over 1100 lives reminds us of the casualties and real costs of cheap fast fashion in the global garment industry.
Over the last 10 years, hundreds of workers have lost their lives due to the common practice of employers locking building exits and forcing workers to keep sewing when there is a fire consuming the factory building. Anti-sweatshop campaigners have been urging brands to sign on to a memorandum on fire and building safety; few have signed on to date.
Australian business is hot on the heels of global brands lining up to do business with Bangladesh – a popular destination for lower operating costs and delivering bigger profits. Amid the horror of so many deaths, Australian retailers want distance. But this behaviour is not without precedent.
In August 2011, Coles launched the new Mix brand, touting it as the beginning of the Wal-Mart experience where consumers could purchase clothes alongside their groceries. This short-lived foray into fast fashion came crashing down when extensive labour and human rights abuses were exposed in the factories producing Coles Mix garments. Australian media reported that these Coles factory workers “worked like slaves”. Under the heat of human rights watch and media pressure, Coles wanted to “cut and run”, as reported by Australian press. This is similar to Australian companies putting “distance” between themselves and the garment factories in Bangladesh.
Improving standards and conditions
Many commentators and human rights organisations question the reasons behind a firm’s distance. Are our Australian firms taking a moral stand, or are they just protecting their precious brands?
In these cases, it becomes obvious that there is no moral stance but simply an exercise in keeping their noses clean. The Institute for Global Labour and Human Rights (IGLHR) specifically requests that firms not withdraw their production from these factories but work with the factories to improve conditions for workers.
It’s important that big international brands – H&M, Primark, Zara – are signing on to the legally binding Bangladesh safety standards agreement, and it’s distressing to learn that Australian firms have refused to sign this specific Bangladesh code. Firms such as Woolworths and Coles claim that they have their “own policies” to ensure good practice. If this were true, they should have no issues with the conditions of such an agreement.
Signing up to voluntary codes that specify practices that a company must adopt is another option. While voluntary and with limited enforceability, these set industry standards on supply chain monitoring, transparency, independent audits and statements from workers that they are able to seek union assistance. These standards go some way in ensuring that workers are treated decently, receive their legal wages and are not subject to death traps.
Who should monitor corporations?
An issue related to codes is the question of monitoring and enforcement. If codes are to have any teeth, there has to be monitoring. This task often falls to governments, but other civil society organisations such as unions and human rights NGOs often assume this role.
According to IGLHR, the Bangladesh government had not put in place improved labour standards and protection for workers. Workers had been denied basic rights such as freedom of association and unions were denied access to garment factories.
It is significant that the Bangladesh government is now giving permission for garment unions to organise and protect workers. The United Nations Guiding Principles on Business and Human Rights specify the duty of the state to protect human rights. These principles identify the lack of regulation of corporate activity transnationally as a governance gap.
State responses to regulating corporate activity have varied. While many developed nations have enacted domestic laws imposing human rights obligations on businesses, others have found it more challenging as the lure of firm investment in national economies outweighs other considerations. It remains to be seen whether the Bangladesh government’s permission for union representation will be consequential or an empty promise.
The need for binding international laws
Australia has world-leading regulation to regulate the supply chain and prevent labour rights abuses workers in the garment industry. These standards did not come overnight; they are the result of numerous reports and inquiries into abuses of garment workers and campaigning over 20 years by the Textile, Clothing & Footwear union, the FairWear campaign and others. Yet there are few binding human rights obligations applying to transnational corporations.
The labour and human rights abuses occurring in Bangladesh illustrate a lack of state response (from Bangladesh, Australian and other governments) to labour and human rights abuses at the transnational level and an inability to regulate business practices. The absence of agreed enforceable standards mean that the only option for non-state actors, such as NGOs and unions, is to take their claims against corporations to the court of public opinion.
Dr Rosaria Burchielli is a senior lecturer in business ethics at La Trobe University.