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“10 Cents for Safety” Report Oversimplifies Thorny Accountability Problem

The Workers Rights Consortium (WRC) claims that minimum safety standards could be met at all garment factories in Bangladesh for only 10 cents a garment in additional costs for retailers and brands.

Walmart and others rejected a 2011 plan to implement a universal safety provision in standard procurement contracts, citing the high cost of modernizing Bangladesh’s estimated 4500 factories.

The WRC report on November’s Tazreen Fashions fire looked at the total amount of money needed to implement safety measures, against the total number of garments manufactured in Bangladesh. The country makes about 7 billion garments per year, and an additional 10 cents per garment would yield about $700 million.

The total cost of implementing all safety measures is estimated at $3 billion, but the executive director of the WRC suggests that the cost could be spread over 3 years.

International brands and retailers are reluctant to invest in improvements to factories that they don’t own. They prefer factory owner to make their own improvements based on standards enforcement. This idea has been widely criticized as unrealistic due to the lack of money for enforcement in Bangladesh, and the extremely tight margins at many factories.

Unfortunately, the WRC report fails to adequately address accountability concerns. It also ignores the risk that higher payments to garment factories would probably not go to improve fire safety without a strong accountability system. Without that, there would be nothing to stop factory owners from taking the extra money as profit.

The fire at Tazreen Fashions killed 112 workers and has sparked widespread attacks on Walmart and other retailers for their perceived greed and callousness on the topic of worker safety. More still needs to be done within the industry to determine what incentives could be created for factories to improve safety.