Bangladesh’s garment makers want American brands and retailers to play fair.
At an event held at the Bangladesh Embassy in Washington, D.C. Friday, Faruque Hassan, president of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA), an influential trade group, urged U.S. buyers to be more “rational” in their pricing demands to promote better jobs and safer and more sustainable workplaces.
“Our factories are increasingly investing money for safety and sustainability. Besides, production cost has gone up by more than 30 percent in last five years,” he said. “On the contrary, the price of our apparel is declining every year. While it’s a fact that in a free market economy price cannot be dictated…nobody can justify a lower price to produce socially fair goods.”
Speaking to other participants at the roundtable, which included senior U.S. and Bangladesh government officials and representatives from the U.S-Bangladesh Business Council, the American Apparel and Footwear Association, Target and Walmart, Hassan described the “massive transformation” Bangladesh has undergone over the past few years. Not only is the South Asian nation one of the safest garment-producing countries in the world, he said, but it also hosts the largest number of green-certified factories.
Garment manufacturers have long complained of cutthroat purchasing terms that continue to squeeze their already razor-thin margins. The practice has become orders of magnitude worse during the Covid-19 pandemic, they say, with many brands and retailers demanding steeper discounts than usual to protect their own battered bottom lines. Factory owners, desperate for business in the wake of widespread order cancelations, have not been in a position to say no. In a poll of 75 factories in 15 countries published last October, 56 percent of them said they have been forced to accept some orders below cost, while the majority predicted that they will have to do so in the long term. Many of the suppliers polled said they felt like they were being held hostage, since pushing back placed future business at risk.
Studies have also shown that poor purchasing practices can have a ripple effect on workers, resulting in increased layoffs, extended worker overtime and wage loss. One survey of 17 apparel, footwear and furniture factories in Vietnam found that nearly 53 percent of suppliers said they were having a harder time providing good working conditions and wages due to the heightened economic pressure. The majority of their workers said they felt more anxious and stressed than they did pre-outbreak.
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Bangladesh is one of the founding members of the Platform on Sustainable Textiles of the Asian Region, better known as the STAR network. By aligning with organizations from Cambodia, China, Indonesia, Morocco, Myanmar, Pakistan, Turkey and Vietnam, the country’s goal is to present to buyers a united front regarding payment and delivery terms and in so doing shift what it perceives as a fundamental power imbalance.
“We want to come together as associations and manufacturers in Asia, to agree on common positions regarding payment and delivery terms so that we have a stronger voice in individual and in collective discussions with brands and buyers on improving purchasing practices,” Miran Ali, vice president of the BGMEA and a spokesperson for the STAR network, said earlier this year. “This common position will be powerful.”
Meanwhile, Hassan called on U.S. lawmakers to consider reducing import duties on apparel products from Bangladesh. According to a 2018 Pew Research Center analysis, Bangladesh pays the highest import duties out of all the 232 exporting nations to the United States, equivalent to 15.2 percent of the total value of its shipments. Bangladesh exported $6 billion worth of goods to the American market last year, more than 90 percent of which was apparel and footwear related.
Hassan also underscored the need for a unified code of conduct that makes multiple—and often repetitive—inspections unnecessary, saving time and money while enabling better compliance. Most of all, he stressed the need for all stakeholders to work in concert to ensure sustained growth of Bangladesh’s apparel industry as it continues to upskill its workers, upgrade its technology and enhance its efficiency.
“It is the collaboration and partnership between brands and our suppliers that [have] helped us to achieve tremendous growth so far and future cooperation and partnership will help us to maintain this,” Hassan added.