As the financial walls of the COVID-19 pandemic continue to close in on Bangladesh, the country’s largest trade group for garment factory owners has threatened to blacklist a British retail group unless it forks up payment.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) sent a letter Thursday warning British billionaire Philip Day, owner of England’s Edinburgh Woollen Mill (EWM) Group, to settle 27 million pounds ($33 million) in unpaid bills by May 29 or face a complete cessation of production and deliveries for its umbrella of brands, which include Austin Read, Bonmarche, Jane Norman, Jaeger and Peacocks.
Any discount requested by the retailer “beyond permissible limits” could result in legal action, BGMEA noted.
“The demand for the discounts will not only be financially catastrophic, but will also expose our members to various claims and liabilities from regulations, banks and other third parties, which will eventually legally implicate the buyers themselves,” the letter read. “We will have no option but [to] take the decision to place an embargo and blacklist the buyers and their agents who do not comply with our instructions, which will prevent them from conducting business with our members in the future either directly or indirectly.”
The shots fired by the BGMEA may only mark the beginning. Western brands and retailers have canceled or suspended more than $3 billion in orders, the organization said, leaving some 2 million workers in a state of limbo and possible destitution despite the limited-scale reopening of factories.
“We are blacklisting non-responsive buyers who are not only not paying but also not responding to suppliers,” Rubana Huq, president of the BGMEA, told Bangladesh’s Daily Star Saturday. “We are never going to go for a confrontational relationship with anyone, and we have always been strategic. But with our businesses hanging by a thread, we need to step up and also rate and rank buyers.”
The BGMEA wrote in the letter that companies like the EWM Group have been taking “undue advantage of the COVID-19 situation” by asking for deep discounts, canceling orders and withholding payment for completed and shipped goods.
According to the Workers Rights Consortium, brands that have not committed to paying in full for completed and in-production orders include Topshop owner Arcadia Group, C&A, Gap, Urban Outfitters and Walmart-owned Asda.
“There is a lot of discussion on sustainability, but sourcing practices are often not syncing with sustainability concerns,” Huq said. “For example, many buyers haven’t paid us but we have had their offices chasing us about salary and bonuses and whether those have been paid. This is not fair. So, we have to step up and take a stand and ensure that our terms of engagement with our buyers change for the better and that we end up with a more sustainable relationship with them.”
A spokesperson for the EWM Group said in a statement that the BGMEA’s letter left the retailer with a very bitter taste in [its] mouth” and insisted it has been engaging with suppliers with “the best of intentions.”
“When this global crisis hit, we had already paid for the majority of future stock, and we have since had productive discussions with individual suppliers about remaining stock,” the spokesperson said. “We have engaged with all our individual suppliers with openness, honesty and the best of intentions, even when the circumstances are difficult.”
“We are left with a very bitter taste in our mouth over the sincerity of this letter,” the spokesperson added. “We think their approach has been unproductive and uncollaborative.”
A copy of the letter was sent to the Bangladesh High Commission in London, the Ministry of Foreign Affairs, the Bangladesh Export Processing Zones Authority, the Ministry of Commerce, Bangladesh Bank, the Bangladesh Investment Development Authority and the British High Commission in Dhaka.