Facebook Pinterest Search Icon SourcingJournal_horiz Tumbler Twitter Shape photo-camera graph-trend Shape latest-news icon / user

COVID-19 Is Rapidly Unraveling Asia’s Garment Sector

Join Isko and Rivet magazine on June 3 at 11 am ET for REFASHIONED, a roundtable discussion on the denim industry’s new normal, from concept to consumer.

When the dark cloud of COVID-19 finally starts to lift, the garment supply chain left in its wake could be a ravaged and more at-risk version of what the world last knew.

And the fate of the supply chain’s garment workers could be worse than the wonder of whether they’ll get paid, with factories idling under both lockdown orders and a lack of orders. A new report from risk analytics firm Verisk Maplecroft shows that in Bangladesh, the world’s second-biggest garment manufacturing country, most factories are located in the highest-risk areas for occupational health and safety, meaning the chance that coronavirus spreads in these communities is “extreme.”

Already, with retailer cancellations or postponed payments piling up, more than one million garment workers in Bangladesh have been furloughed or let go, according to a report released last month by Penn State’s Center for Global Workers’ Rights.

“South East Asia’s 40 million garment workers are at the sharp end of the coronavirus crisis,” Verisk Maplecroft human rights analyst Sofia Nazalya wrote in the report. “The pandemic has devastated the sector, leaving thousands unemployed and facing poverty, while the health and safety of those who continue to work is at serious risk in factories that are not geared up for social distancing.”

Confirmed coronavirus cases in South and Southeast Asia reached 75,262 with 4,604 new cases in the past day, according to the World Health Organization’s Friday situation report. That’s 2.87 percent of the world’s 2.6 million total confirmed COVID-19 cases. By contrast, cases in the U.S. reached 830,053 Friday, with 29,127 new cases in the last 24 hours, accounting for 31.6 percent of global cases. Europe, meanwhile, accounts for 48.8 percent of the world’s confirmed coronavirus cases.

While cases in the West are considerably greater than in the major sourcing countries, the knock-on effect of upended economies in the nations that buy from them has already proved detrimental, most critically, where labor is concerned.

“Asia’s garment hubs already perform poorly across our labor rights indices, with all rated high or extreme risk for forced labor, child labor and occupational health and safety. However, we expect an increase in these risks across the board as staff are laid off and livelihoods are threatened,” Nazalya wrote. “As a result, laid-off workers are likely to turn to exploitative employment that increases the risks of forced labor. The chances of children entering the workforce will also rise exponentially, as families attempt to make up shortfalls in earnings.”

What’s more, while cases may appear on the lower side in South East Asia for now, testing isn’t as wide-reaching as it needs to be, which means many more in the countries have the virus than what’s being reported. The cases are only expected to climb as factories look to reopen and attempt to navigate production in facilities where social distancing may be near impossible. And the factories themselves are located in densely populated areas where many expect cases of coronavirus will spike.

Bangladesh factory map

In looking at its index for Occupational Health and Safety, Verisk Maplecroft said the central area of Bangladesh, where the country’s capital, Dhaka, is located, constitutes a higher risk than the rest of the country.

“Dhaka administrative region is home to most of the country’s garment manufacturing factories and was already rated extreme risk for OHS prior to the pandemic,” the report said. “We are likely to see the region’s score worsen even more.”

While some brands are stepping in to make good on their commitments to accept placed orders and pay for them on time so workers will receive their salaries, others aren’t. And the efforts of the few still won’t be enough to protect the many garment workers from what Verisk Maplecroft says will be “sustained unemployment.”

“As the pandemic continues to spread across Asia and the world, we expect layoffs of garment workers to continue in 2020-Q2, reflecting the serious economic disruption facing the sector,” Nazalya wrote.

Bangladesh, Vietnam, India, Indonesia and Cambodia—all vital suppliers of the world’s clothing—are expected to be hardest hit. With many factories in places like Bangladesh still not open or fully operational, workers may go too long without pay, and factories too long without revenue, and some won’t be able to sustain themselves or recover from the blow.

“Massive layoffs will ignite labor unrest and union activity as workers protest unfavorable working conditions and demand wages owed. In the capitals of Bangladesh and Cambodia, thousands of laid off workers have already held protests demanding wages owed and severance pay, which may only be the start,” Nazalya said. “This leaves fashion and retail companies facing a combustible mix of reputational risks that cannot be offset by onsite inspections, along with ongoing disruptions from shortages of material and potential are ups of civil unrest in their key hubs.”

Related Articles

More from our brands

Access exclusive content Become a Member Today!