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Covid Crisis Hits 4 Million Bangladeshi Garment Workers’ Bottom Line

More than a year since the Covid-19 pandemic plunged the world into an unprecedented state of chaos and flux, order cancellations, delayed payments and demands for steep discounts continue to have repercussions across Bangladesh’s garment industry, the world’s second-largest after China.

Many of the country’s 4 million garment workers have either watched their paychecks shrivel up or been cast out of their jobs without severance, according to a study published Thursday by the Subir and Malini Chowdhury Center for Bangladesh Studies at the University of California, Berkeley, in collaboration with the Institute for Human Rights and Business and with the support of the United Nations Development Programme and the Swedish International Development Cooperation Agency.

The failures of the government, international brands and suppliers to rally and attack the crisis head-on has left the “weakest link” of the global supply chain exposed and vulnerable, said the study, which drew its conclusions from interviews with suppliers, civil-society representatives, labor activists and brands such as H&M, Levi Strauss, Marks & Spencer and Primark.

All stakeholders must bear some of the blame: Authorities did not intervene in the negotiations between international brands and suppliers, for instance, and Bangladesh’s stimulus package was ultimately a loan made available only to larger, registered factories. Brands suspended in-progress and finished orders, invoked contractual force majeure clauses to escape liability or failed to provide material or financial assistance. And though suppliers redesigned factories and provided personal protection equipment such as masks and gloves, some paid their workers less, late or not at all.

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The report noted that most of the garment industry’s woes stem from the “inherent power imbalance” between large companies from the industrialized world and low-wage workers with weak or restricted representation. “In between are suppliers—factories in the developing world, which employ the workers and which must compete with suppliers in their own country as well as other suppliers around the world,” it wrote. “The suppliers are many and the brands are few and, in negotiations, the brands have the upper hand, making negotiations uneven.”

The eagerness of developing countries to attract and retain foreign investment has further created a “perverse incentive of reducing regulation and, sometimes, eroding minimum standards,” the report added. But the pandemic has led to a consolidation of brands and suppliers, which means the industry of the future could see even fewer suppliers working with global brands. “Standards must improve and performance must be monitored and reported in a transparent manner,” it said.

The Bangladesh government must strengthen social protection mechanisms, including health benefits and a social security net, and provide resources through “well-designed” furlough regulations so that workers’ wages are not imperiled when a crisis hits, the report said. At the same time, it should not reduce the minimum of what are already low compensation and ensure that workers receive a living wage. Trade unions, too, must be allowed to function unhampered.

Brands, the study said, should ensure that their actions do not squeeze their suppliers but rather use their resources and leverage to provide liquidity for them. They should oversee or supervise factories so international standards are met, avoid canceling contracts and pay for raw materials already acquired and work already in progress. Suppliers, who “bear direct responsibility for the well-being of the workers,” should provide for the necessary infrastructure to enable safe working conditions, while disbursing the wages required by law.

International organizations, the report said, should consider new initiatives to empower workers, enable suppliers to negotiate with brands as “equal partners” and facilitate dialogue between brands and local unions. “Ultimately, the burden of future crises should not fall disproportionately on the most vulnerable link in this chain—the workers,” it said.

Consumers have their role as well. “It is important that consumers inform themselves about work conditions at factories where their clothes are made,” the study wrote. “If consumers no longer show their appetite for ‘fast fashion,’ this could be the ideal time to acknowledge the power and think about a more ethical and sustainable business model that could disrupt the existing unequal power relationships between global brands, suppliers and workers.”

Creating workplace resilience

The report was issued just as the International Labour Organization (ILO) urged countries to put in place “sound and resilient” occupational safety and health (OSH) systems that would minimize risks when future health emergencies arise. This would require not simply investing in OSH infrastructure and but also integrating it into national crisis emergency preparedness and response plans, “so that workers’ safety and health are protected and the business continuity of enterprises is supported.”

“The second wave of the pandemic is sweeping across Bangladesh as we mark World Day for Safety and Health at Work 2021,” Tuomo Poutiainen, Country Director of ILO Bangladesh, said in a statement Wednesday. “Many hundreds of thousands of workers continue to work hard to keep the society and the economy functioning. The pandemic has clearly shown the importance of OSH in creating safe working environments and its impact on public health. The occupational safety and health of all workers in all industries must be a national priority.”

The current crisis highlights the need for “equitable, inclusive and human-centered” responses, Poutiainen said. In the absence of protections such as sick leave and unemployment benefits, millions of workers are “forced to make a cruel choice between their health and their livelihoods,” he added.

“Investing in OSH systems will not only contribute towards responding to the current pandemic and recovering faster by avoiding further contagion, but will create resilience to face any future crises that might lie ahead,” Poutiainen said. “At the same time, it is important to establish urgent safety net programs for low-wage workers, the self-employed and workers and enterprises in all the hard-hit sectors, including informal ones.”