The Rana Plaza legacy Article icon

The The deaths of more than 1,100 people at a garment factory in Bangladesh have had a lasting legacy as retailers have collaborated to change working conditions and improve safety

It is now almost 18 months since the retail world suffered its worst industrial disaster when Rana Plaza, an eight storey garment factory in Dhaka, Bangladesh, collapsed, killing 1,133 people, injuring more than 2,500 and leaving at least 800 children as orphans.

Such was the scale of the tragedy that Western retailers – stung by headlines detailing poorly-built factories and shoddy working conditions – immediately began a major push to improve safety at the Bangladeshi factories with which they did business.

They rushed to compensate victims, inspected hundreds of plants and made supply chains more transparent - all with the goal of preventing another catastrophe in one of the world’s poorest countries.

Fast fashion brands are working to ensure that the Rana Plaza disaster remains an isolated incident, never to recur, but progress has since been slow and uneven.

Their actions are not entirely altruistic. Bangladesh offers the cheapest labour in the world, moderate production costs and an eager workforce based in approximately 5,000 factories scattered around the capital Dhaka.

In return, fashion is big business for Bangladesh. Its £12 billion clothing industry - the world’s largest after China - is vitally important for its economy, generating nearly 80 per cent of its export earnings and providing four million jobs, mostly to women from rural areas desperate to raise their living standards.

The fashion industry’s first actions came a few weeks after the disaster when a group of 180 mostly European brands and retailers, including Debenhams, H&M (which did not have any garments produced at Rana Plaza), River Island and Inditex, owners of Zara, signed the Accord on Fire and Building Safety in Bangladesh alongside 14 labour unions.

The five-year legally binding Accord was created by two global unions IndustriALL and UNI and non-governmental organisations Clean Clothes Campaign and the Workers Rights Consortium. It ensures that all factories used by its members are independently inspected and all safety reports made public.  

But not all retailers joined the Accord. Many predominantly North American brands, such as Gap, Walmart and Target, argued that it gave unions too much control, and instead established a rival Alliance for Bangladesh Worker Safety, which has similar objectives to the Accord, although it is not legally binding.

As of July, the Alliance has inspected all 587 factories used by its 26 members, and closed or partially closed ten due to safety violations. (Once repairs have been made, they will reopen).

The Accord has also been carrying out its own work. According to Joris Oldenziel, the group’s head of public affairs in Amsterdam, teams have inspected almost 1,000 factories used by its members and plan to inspect the rest – about 1,500 – by next month. To date, seven factories have been shut down due to ‘significant findings’.

In some cases, workers have located to another factory while essential repairs are carried out. But in two factories, the Accord’s orders have been flouted and workers are still operating in the unsafe site, says Oldenziel. As a result, the Bangladesh Inspector General has initiated legal proceedings against them. (In about 200 cases, there has been an overlap with the Alliance and the Accord both examining the same factories.)

Another major initiative has been the setting up of the Rana Plaza Donors Trust Fund, backed by the UN’s International Labour Organisation (ILO), to compensate the families of those who died or were injured in the collapse.

The 28 retailers who manufactured goods at the site agreed to contribute, and a target of £24 million was agreed. According to the Clean Clothes Campaign, Primark has led the way with a £7 million donation while other contributors include Asda, Bonmarche, Canada’s Loblaws and Spain’s Mango and Inditex. But to date, just £10.4 million has been raised with only half the brands contributing while others have made excuses.

For example, discount chain Matalan was the only major British retailer that failed to make a donation, arguing that it had given an undisclosed amount to a Bangladeshi non-governmental organisation and had no need to donate further.

Only after receiving thousands of emails, tweets and calls from the public and a direct request from the UK government did Matalan, which generates annual profits in excess of £100 million, change its mind - and give a donation. However, it chose not to reveal how much it had given. But campaign group 38 Degrees claims the amount was £60,000, far short of the £3 million requested by the International Labour Organisation.

Other companies have been even stingier. To date, 16 companies linked to Rana Plaza, including American chain JC Penney, French grocery giant Carrefour and global fashion brand Benetton, have failed to pay up. Their reasons vary. Benetton, for example, at first denied any ties to Rana Plaza. However, after photographs showing their clothes peeking out of the wreckage were published, the retailer sent out a statement: ‘A one-time order was completed and shipped out of one of the manufacturers involved several weeks prior to the accident. Since then, this subcontractor has been removed from our supplier list.’

As for the others, some in the industry believe corporates are hesitant to give money as it could be construed as an admission of guilt - leaving them vulnerable to lawsuits. Ineke Zeldenrust, spokeswoman for the Clean Clothes Campaign, disputes this. ‘I think it is just sheer reluctance to part with their money,’ she says.

The Rana Plaza tragedy has thrown up another issue which has dogged retailers for ages: lack of ethical and transparent supply chains.

Twenty years ago, the global textile market was much smaller and simpler. Retailers worked to a set timetable. Four times a year stores changed their on-floor collections; order lead times were about six months and supply chains were easily traceable as most factories were based in Europe or the US.

Then along came fast fashion led by Zara. The Spanish retailer slashed clothing lead times to just 12 days - allowing it to offer fashionable clothes at a fraction of the price all year round. Other retailers followed and soon the consumer could buy jeans for £10 and T-shirts for £1. Fashion purchases grew exponentially. In 1997, the average UK woman bought 19 items of clothing a year. Ten years later, she bought 34.

This change coincided with a shift in global garment production. Protective tariffs, put in place in the 1970s, expired, making countries like Bangladesh, with their vast and cheap labour pools, hugely attractive to retailers.

Supply chains got complicated. ‘The further the goods get away from home, the more difficult it is to track them,’ says Edward Hertzman, founder of Sourcing Journal, a US online trade magazine. In many cases, retailers might not necessarily know exactly where their clothes were being made. They passed on their designs to an agent tasked with sourcing the cheapest supplier. The supplier, in turn, might outsource somewhere else - especially if there was a tight deadline looming.

Rana Plaza was an example of this. In the aftermath of the building’s collapse, triggered by the illegal addition of three floors by its owner, investigators found it difficult to discover which brands were producing goods there. In some cases, they were forced to search through the rubble.

For their part, some brands were reluctant to come forward. To this day Store Twenty One, an Indian-owned fashion chain, whose labels were found at the site, has refused to comment except to say: ‘We are investigating the situation with our supply base and overseas offices.’

Other companies have been much more proactive. Leading the way is Marks & Spencer. ‘They are a great example of a company which has done so much to make their supply chain as sustainable and transparent as possible,’ according to Martin Chilcott, chief executive and founder of 2degrees, an online community for sustainable business.

Seven years ago the high street retailer, which has suppliers in 70 countries, launched its environmental and ethical programme Plan A. Under the plan, factories working with the company are required to have regular fire, health and safety checks and regular audits. After Rana Plaza, M&S also made it a requirement that their supplier factories in Bangladesh, numbering about 50, had to be structurally assessed. ‘We didn’t want to wait for the Accord, so we started inspecting ourselves,’ said Daniel Himsworth, a spokesman at M&S.

Primark has also stepped up its actions. When Rana Plaza fell, the discount retailer was the first company to admit responsibility. Ironically, it had audited the factory twice before the disaster but had failed to conduct a structural survey – because no company did so at the time.

However, due to past problematic issues with supply chains, Primark was able to say exactly which garments were being made at the factory. In addition, it sent food parcels to more than 1,000 households and signed up 4,000 victims to bank accounts so they could receive short-term financial aid.

Like M&S, it also began assessing the structural integrity of the factories it used. In June 2013 it discovered serious structural problems at Liberty Fashion, a factory close to where Rana Plaza stood, and asked the owners to immediately evacuate the building. The owners refused and Primark, together with Debenhams and Tesco who shared the building, cut off all ties with their supplier. Prior to Rana Plaza, such a stance would have been highly unlikely.

H&M, the world’s second largest fashion retailer, has also been making changes to the way it does business in Bangladesh with its 300 suppliers. For instance, it permits factory owners to subcontract as long as the factory has been inspected by the Accord. If H&M discovers the supplier has been using a subcontractor in an unapproved facility, it issues a warning. If it happens again, the contract is ended.

The Swedish fashion retailer has also pledged to pay a living wage to 850,000 textile workers across 750 factories in its supply chain by 2018, and would support owners at two factories in Bangladesh and one in Cambodia to adopt a living wage next year. It will use the Fair Wage Method, an established process for achieving a living wage, and will support workers in their negotiations. The additional costs will not feed back into the prices of its goods.

Fast Retailing, owner of the Uniqlo brand - one of the world’s fastest growing retailers - uses a different way to strengthen the buyer-supplier relationship.

It calls suppliers ‘partners’ and often provides them with 18-month forecasts of order volume. If Fast Retailing fails to stick with the order, suppliers receive compensation and an apology. In this way strategic partnerships have been formed.

Despite these efforts, much still remains to be done to improve working practices. And there is a growing realisation that global brands and retailers cannot do this all by themselves. According to a recent report by the Stern Business School in New York, the international community - foreign governments, the World Bank, and other multilateral institutions - needs to step up to help rebuild Bangladesh’s factories and infrastructure. As for the Bangladesh government, the report says it must work to reclaim ownership of the country’s regulatory system and also establish its own systems for monitoring factories, instead of relying on the Accord and the Alliance.

But the report applauded the decision by the government, after huge pressure from trade unions, to nearly double the minimum wage to £40 (5,300 taka) a month from £23 – although it still remains the world’s lowest. It also changed the law to allow garment workers to form trade unions without prior permission from factory owners.

These and other changes have led some to say there has been a silver lining in the Rana Plaza tragedy. ‘For big name retailers, ignorance is not an option any longer. I would say in the last year or so we have seen real engagement on the issue of supply chain sustainability,’ says Ed Gillespie, co-founder of Futerra, a sustainable communications agency. ‘I also think you are starting to see an awareness, a connection among the younger generation.’

This awareness led to the successful first ever Fashion Revolution Day on 24 April, the first anniversary of the tragedy.

Tens of thousands of people from 60 countries took part – turning an item of their clothing inside out in a symbolic call to support ethical fashion. Using the hashtag #insideout, supporters tweeted pictures of clothing items to brands with the question Who made your clothes?

The day was the brainchild of Carry Somers, founder of a Fairtrade hat company, and was supported by such names as activist Bianca Jagger, eco icon Livia Firth, retail expert Mary Portas and entrepreneur Jo Wood.

‘I think there is a growing awareness of where our clothes come from but there is still a lot of ‘green washing’ being done by companies that say they are eco and ethic friendly - but in fact do little,’ says Somers. ‘Our aim is to give a voice to those who are usually not heard - from the farmers who grow cotton to the woman who sews on our buttons in Bangladesh.’

The event is now set to be an annual fixture in the global fashion calendar in an attempt to keep the most vulnerable in the supply chain in the public eye. More than £75,000 has been raised already and, in a twist, the campaign is selling t-shirts made by survivors of Rana Plaza.