To Prevent Another Rana Plaza, Build Better Societies, Not Just Better Factories

April 24, 2014
  • Racheal Meiers

    Former Director, BSR

Racheal Meiers, Director, BSR HERproject

It’s been a year since the Rana Plaza building collapse in Bangladesh, which killed more than 1,000 factory workers. Since then, leaders from business, government, and civil society organizations have come together to address fire and building-safety issues in the apparel factories. But the tragedy of Rana Plaza isn’t that a building fell down. The tragedy is that countless people died even though both workers and management knew something was wrong.

Part of this has to do with what rights activists might refer to as a “lack of voice”: Bangladesh has notoriously hostile working conditions, perpetuated by low wages, a lack of unions, and a thick layer of government and local industry corruption—not to mention the complicity of global fast-fashion timelines that focus attention on cost and speed, which can come at the expense of basic rights and wellbeing of workers.

But even considering these factors, there’s more to the story. In particular, the tremendous growth of Bangladesh’s ready-made-garment sector (RMG)—from 50 factories in the 1980s to close to 5,000 today, making up 13 percent of the country’s GDP—hasn’t translated to marked improvements in social protections and standards of living. Bangladesh, BSR’s HERproject learned, has only one nurse per every 5,000 people. (In the United States, there are 43 registered nurses for every 5,000 people.) A World Bank study tells us that the cost of land in Dhaka, where hundreds of thousands of garment workers live, is comparable to suburban New York. And according to research by the Solidarity Center, less than 1 percent of women in garment factories participate in worker associations in Bangladesh’s export zones.

These facts raise an important question: Do companies have a responsibility to understand, and potentially improve, the societies in which their products are made? To date, there has been minimal progress in this area. Bangladesh has a markedly different socioeconomic context compared to other manufacturing centers like China, which has a relatively robust system of social benefits and protections. Yet companies apply the same supply chain labor policies in both countries.

This needs to change.

While the primary responsibility of global brands remains to uphold labor rights standards and compensate victims when those standards are violated (as was the case with Rana Plaza), to truly manage their risks, maintain social license to operate, and deliver quality products efficiently, business must address what is happening beyond the factory walls. And as companies expand into new countries like Myanmar that have a limited infrastructure of social benefits, these issues will only grow in importance.

Making progress will take a renewed approach to collaboration, and businesses must be ready to join forces with uncomfortable partners, such as unions, industry associations, and activists. The Accord on Fire & Building Safety, a coalition of companies, government, and civil society organizations that is chaired by the ILO, seeks to do this, and the expansion of the ILO/IFC Better Work program into Bangladesh will also take a tripartite approach. It’s imperative that brands operating in Bangladesh join collaborations like these.

In addition, the leaders of these efforts must consider additional unlikely partners, such as urban planners, health workers, and women’s rights campaigners. Companies can also look at opportunities to join with other industries: Partnerships with mobile phone companies could help address personal-safety issues or help disseminate essential information, similar to what the partnership MAMA has done by providing information to new mothers via mobile phone during months leading up to birth and the year following.

Finally, business will need to take a different approach to measuring progress: Rather than focusing solely on safety inspections, companies need to set targets on health and wellbeing, gender equality, housing, and personal safety outside of the workplace. Levi Strauss & Co., working with BSR and others, has made some progress in this area by adding a new worker wellbeing survey to strategic supplier engagements. BSR also recently published a study with auditing firm UL to explore integration of personal wellbeing issues into traditional social compliance audits.

Measuring such issues will allow corporate decisionmakers to generate an objective picture of the context within which their businesses and suppliers operate: Are the jobs and growth they generate helping to reduce poverty among employees and their families? How are such advances linked to bottom-line benefits such as employee loyalty and higher productivity? Are they adding value to the company’s reputation and helping mitigate risk? This data can be used not only to improve business operations, but also can be leveraged for public policy engagement at local and international levels.

Beyond the front-page coverage of the Rana Plaza tragedy, Bangladesh has been stuck at the bottom of socioeconomic development ratings for years. With all the employment and growth generated by the RMG sector, that number should be changing.

Ultimately, the true measure of a productive and safe apparel sector in Bangladesh will not be reduced incidences of fires and building collapses. It will be when loss of life is prevented in the face of the industrial (and natural) disasters that inevitably will come. It will be when someone feels comfortable speaking up—and when managers and companies begin listening.

This article first appeared on the Harvard Business Review blog

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