According to a new report, the scope and scale of Bangladesh’s ready-made garment sector—and the state it’s in—has been grossly underestimated, leaving scads of subcontractor factories unaccounted for. And despite considerable efforts to remediate some of the country’s factories, limited funding and oversight has meant many are still lacking when it comes to adequate fire and safety standards.
A research brief released this week by the NYU Stern Center for Business and Human Rights—which has done extensive research into the garment industry in Bangladesh—said estimates in a June 2016 study by the International Finance Corporation (IFC) and the International Labour Organization (ILO) that said the funding gap between the cost of addressing safety issues in Bangladesh and the capital available to fund them was nearly half a billion dollars, fell short of reality.
“The IFC/ILO study is limited to about 4,000 factories that have been identified by the three major initiatives and therefore does not include the true scope of facilities producing for garment export in Bangladesh. Our research identified an estimated 7,100 factories and facilities producing for export. A subsequent study by BRAC University and the BGMEA concluded that there are more than 8,000 factories producing for export. The IFC/ILO study also does not address major deficiencies in Bangladesh’s critical infrastructure,” the research brief said.
Remedying what’s needed in the RMG sector in Bangladesh, according to the NYU Stern Center, will be a “considerably larger and more expensive endeavor.”
As many as 3,200 factories are missing from the IFC/ILO study figures, which were said to include factories enrolled under the Bangladesh Accord on Fire and Building Safety and the Alliance for Bangladesh Worker Safety, plus Bangladesh’s own National Tripartite Plan of Action on Fire Safety and Structural Integrity (NTPA), and would have been based on the Bangladesh Garment Workers and Exporters Association (BGMEA) overall estimate of 4,296 garment factories in the country.
A report from 2015, Beyond the Tip of the Iceberg: Bangladesh’s Forgotten Apparel Workers, also published by NYU’s Stern Center, pointed to a factory number closer to 7,100. The report got a lot of pushback from stakeholders in Bangladesh who claimed it double counted certain factories and included others that were no longer in operation, including Rana Plaza—and the report came after the collapse.
In an interview with Sourcing Journal, Dorothée Baumann-Pauly, the research director and author of the new brief, said, “There’s mounting evidence now that this universe of factories in Bangladesh is currently larger than any stakeholder is willing to acknowledge. If you now assume a universe of factories that’s larger than 8,000, that just shows that a lot of workers are still unprotected and fall outside of the scope of these programs.”
Subcontracting has been an ongoing problem in low-wage sourcing countries, as factories pressed for deadlines will dole out work to smaller, unaccounted for—and often unsafe—factories to help them meet demand. And this largely goes unbeknownst to the brand.
Though news about subcontracting has gone quieter since Bangladesh has been under increased scrutiny post Rana Plaza, the problem hasn’t abated, according to Baumann-Pauly.
“Those subscontractors work in a very dark world,” she said. “And they’ve just developed their work even further underground than before.”
With all these factories considered, the ones Baumann-Pauly says aren’t counted in many of these estimates of the size of Bangladesh’s garment sector, the total cost of remediation for the industry there could exceed $1 billion.
And now that safety inspections and remediation plans will soon start shaping up differently than they had been, it’s hard to tell how any of this will go.
Bangladesh announced in August that the BGMEA would form its own agency to undertake factory inspection and remediation efforts similar to what the Accord and Alliance had been doing in the country. Both the Accord and Alliance programs expire in 2018, and while the Accord has said it will stick around, renewing its agreement, the Alliance said its tenure will end as planned.
The new Bangladesh-run inspection agency, Shonman, will start up in January and be run by an ombudsman selected by the Prime Minister and have a steering committee comprised of members of the BGMEA, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), the International Labour Organization, brands, trade unions and labor ministries.
[Read more about plans for Shonman: Bangladesh to Take Factory Inspections Into Its Own Hands as U.S.-Led Alliance Steps Aside]
While Bangladesh appears pleased to be reclaiming control over matters of factory safety, others have already expressed doubt.
“The universe that they take on is even smaller than what falls under the Accord and Alliance. They would only make sure the facilities that are remediated under the Accord and Alliance stay safe,” Baumann-Pauly said, adding, however, that the intended makeup of Shonman does seem to be very inclusive. Regardless, she said, “A comprehensive plan around a shared responsibility model is the way to go, and then figuring out a fair share for each stakeholder.”