#1 How shall we describe the relationship between the Alliance and the Accord? Are they collaborators or competitors? Do you think the Alliance and the Accord can join forces?
#2 How many inspectors are “enough” for Bangladesh? The case study mentions that the Alliance and the Accord are observing around 2,000 factories, but how about the other 3,000 in Bangladesh? And how about those unknown and “undocumented” factories, where the working conditions could be even worse?
#3 Do Western fashion brands genuinely care about what is happening in the Bangladeshi garment factories? Or do they actually care about their own interests—profit, public image and reputation among consumers?
#4 What has made Western fashion brands stay in Bangladesh after the Rana Plaza tragedy instead of moving their sourcing orders to other Asian countries in the area such as Cambodia and Vietnam?
#5 How transparent should be companies’ supply chain? Should fashion brands be required to disclose more supply chain information—such as where their products were made and who made them? What could be the difficulty of enforcing a more transparent apparel supply chain?
#6 In addition to more frequent inspections, what other measures can be taken to improve social responsibility practices in the garment industry?
#7 Four years after the Rana Plaza, are you satisfied with the changes that have happened in Bangladesh? What major social responsibility problems in the Bangladeshi garment industry remain unsolved?
[Please feel free to join our online discussion. For the purpose of convenience, please mention the question # in your reply/comment.]
This video is a great reminder of the impact of our fashion apparel industry, in particular through trade and sourcing. One key learning objective of FASH455 is to help students get aware of those critical global agendas that are highly relevant to the textile and apparel sector.
Discussion Question: After watching the video, do you have any new thoughts about how you can contribute to the building of a better world as a FASH major?
[Note: The 2017 U.S. Fashion Industry Benchmarking Study has been released]
The report can be downloaded from HERE
Key Findings of the study:
I. Business environment and outlook in the U.S. Fashion Industry
- Overall, respondents remain optimistic about the five-year outlook for the U.S. fashion industry. “Market competition in the United States” is ranked the top business challenge this year, which, for the first time since 2014, exceeds the concerns about “increasing production or sourcing cost.”
II. Sourcing practices in the U.S. fashion industry
- U.S. fashion companies are more actively seeking alternatives to “Made in China” in 2016, but China’s position as the No.1 sourcing destination seems unlikely to change anytime soon. Meanwhile, sourcing from Vietnam and Bangladesh may continue to grow over the next two years, but at a slower pace.
- U.S. fashion companies continue to expand their global reach and maintain truly global supply chains. Respondents’ sourcing bases continue to expand, and more countries are considered potential sourcing destinations. However, some companies plan to consolidate their sourcing bases in the next two years to strengthen key supplier relationships and improve efficiency.
- Today, ethical sourcing and sustainability are given more weight in U.S. fashion companies’ sourcing decisions. Respondents also see unmet compliance (factory, social and/or environmental) standards as the top supply chain risk.
III. Trade policy and the U.S. fashion industry
- Overall, U.S. fashion companies are very excited about the conclusion of the Trans-Pacific Partnership (TPP) negotiations and they look forward to exploring the benefits after TPP’s implementation.
- Thanks to the 10-year extension of the African Growth and Opportunity Act (AGOA), U.S. fashion companies have shown more interest in sourcing from the region. In particular, most respondents see the “third-country fabric” provision a critical necessity for their company to source in the AGOA region.
- Free trade agreements (FTAs) and trade preference programs remain underutilized in 2016 and several FTAs, including NAFTA and CAFTA-DR, are utilized even less than in previous years. U.S. fashion companies also call for further removal of trade barriers, including restrictive rules of origin and remaining high tariffs.
The benchmarking study was conducted between March 2016 and April 2016 based on a survey of 30 executives from leading U.S. fashion and apparel brands, retailers, importers, and wholesalers. In terms of business size, 92 percent of respondents report having more than 500 employees in their companies, while 84 percent of respondents report having more than 1,000 employees, suggesting that the findings well reflect the views of the most influential players in the U.S. fashion industry.
For the benchmarking studies in 2014 and 2015, please visit: https://www.usfashionindustry.com/resources/industry-benchmarking-study
- Zara Hayes, Director of Clothes to Die For
- Sarah Hamilton, Producer of Clothes to Die For
- Mara Burr, Senior vice president from the Albright Stonebridge Group
- Avedis Seferian, President and CEO of Worldwide Responsible Accredited Production(WRAP)
- Marsha A. Dickson, Professor of Department of Fashion and Apparel Studies, Irma Ayers Professor of Human Services, Co-Director of Sustainable Apparel Initiative, University of Delaware
Panel discussion questions:
- What does the Rana Plaza tragedy bring out those aspects of the garment industry that many people don’t know?
- What was it like going to Bangladesh and talking to survivors of the Rana Plaza? What are the behind the scene stories of filming the documentary Clothes To Die For?
- What changes are happening in the Bangladesh garment industry after the Rana Plaza? Particularly, what people in Bangladesh are doing to prevent tragedies like the Rana Plaza from happening again?
- The Alliance for Bangladesh Worker Safety (the Alliance) is a major effort from the U.S. business community in response to the Rana Plaza tragedy. What the Alliance has being doing, what major accomplishments have been achieved and what is the future work plan of the organization?
- Has corporate social responsibility (CSR) practices in the Bangladesh garment industry critically improved after the Rana Plaza? Compared with other leading apparel manufacturers in the world such as China, Vietnam, India, Cambodia and Indonesia, is Bangladesh still significantly lagging behind in terms of corporate social responsibility practices?
- How does the academia look at the Rana Plaza? Does the tragedy lead to some new research questions? What is the “academic” recipe for improving the CSR practices in the Bangladesh garment industry?
- Will enhanced factory inspection increase production cost and make apparel “Made in Bangladesh” lose price competitiveness?
- To prevent tragedies like the Rana Plaza from happening again, what each individual consumer can do or should do?
- Sub-contracting is regarded as an indispensable part of today’s global apparel supply chain. But factories undertaking sub-contracting work operate in a “black box”—many of them are off the chart for inspection and audit. Any progress or new thinking on how to solve the sub-contracting issue in the garment industry?
This video provides a great summary of what we disused in class on trade and development. Please keep in mind that:
- Textile and apparel industry (T&A) plays a critical role in generating economic growth, reducing poverty and promoting human development both in history and today. This is why T&A remains a critical sector in the 21st global economy, even though people may think this is such a “simple” product.
- Apparel sourcing is far more about how to get the best quality product at the lowest price. Throughout the supply chain, sourcing decisions and practices are closely connected with many people’s destiny in the world, especially those living in the developing countries. As future professionals working in the fashion apparel industry, please think about your impact and responsibilities.
Welcome for any further comment and feedback on the topic.
Note: the followings updates are compiled based on the 2015 Bangladesh Development Conference held from June 5th to 6th at the Harvard University. The conference attracted over 100 attendants and speakers from various aspects of the apparel industry, government agencies, international organizations, non-government organizations and academia.
1. Overall, the industry side argues that tremendous efforts have been made to improve work safety in the Bangladesh apparel industry and things are gradually improving. However, representatives from some labor unions say that changes are not happening fast enough as they should.
2. Indeed, as one of the most noticeable changes after the Rana Plaza tragedy, the Bangladesh apparel factories are now facing more frequent safety inspection and audit from various parties:
- In addition to the regular inspection conducted by individual fashion brand or retailer, the Accord on Fire and Building Safety in Bangladesh (the Accord) and Alliance for Bangladesh Worker Safety (the Alliance) were established in 2013 respectively (mostly funded by western apparel brands sourcing from Bangladesh) to maintain minimum safety standards in the Bangladesh apparel industry.
- The Accord has a total five-year budget of $50 million to be used on factory safety inspection and improvement. However, it is far from being clear what will happen after the Accord agreement expires in 2018 and whether the inspection achievements can be maintained afterwards.
- The International Labor Organization and International Finance Corporation launched the “Better Work” program in collaboration with Bangladesh government, apparel factory owners, workers, fashion buyers and other relevant stakeholders. The program intends to provide assessments of factory compliance with national law and core international labor standards, paired with transparent public reporting on findings.
- Nevertheless, some people argue that audit itself is not the answer to the problem, just like “a pig will not gain weight simply by weighting it; instead, we have to feed it.” Reflecting on the limitation of inspection and audit, they refer to compliance as just a piece of paper whereas ethics is something that keeps people awake in bed.
3. Some foreign governments also have responded to the Rana Plaza tragedy, although in different ways:
- Stick: the U.S. government decided to suspend Bangladesh’s Generalized System of Preferences (GSP) status in 2013 as a response to the Rana Plaza tragedy. Because textile and apparel are excluded from GSP, this measure has no direct impact on Bangladesh’s apparel exports to the United States. But the movement is symbolic and significantly increases the publicity of corporate social responsibility (CRS) issue in the Bangladesh apparel industry.
- Carrot: in comparison, the European Union chooses to continue providing Bangladesh its GSP benefits. As a GSP beneficiary, Bangladesh’s apparel exports to EU can enjoy duty free treatment when competing with other Asian suppliers such as China and India. According to EU, from 2008 to 2012 EU28 imports from Bangladesh increased from €5,464 million to €9,212 million (+69%), which is more than half of Bangladesh’s total exports. While granting Bangladesh the benefit, EU also launches the GSP Action Plan and the Sustainability Compact to encourage responsible businesses in Bangladesh.
4. Training has been provided for Bangladesh officials to help them better understand building safety requirements.
5. More apparel factories in Bangladesh now have their own labor unions. According to the local law, 30 percent of the labor force in a factory can form its own labor union, meaning theoretically one factory can have up to three different unions. There has been more open discussions on “worker/women empowerment”, “social dialogue” and “stakeholder engagement” in the Bangladeshi society as well.
6. Some creative financial incentive mechanisms are suggested to improve the situation, such as offering factories with better compliance record with more attractive interest rate for bank loans; and adding building safety clauses in factory insurance contract.
7. Academia is actively engaged in finding a solution for improving the CRS practices in the Bangladesh apparel industry as well:
- Based on analyzing the factory inspection data, some scholars start to evaluate the effectiveness of the current inspection system (eg: does who pay for the inspection matter for the result? Does violation go down overtime in inspection? What is the role of on-going people to people relationship in inspection?).
- Some projects intend to develop an estimate of the true size of the Bangladesh apparel industry, given the fact that the worst work condition may exist in those undocumented factories. As a matter of fact, even the Bangladesh government doesn’t know how many garment factories they have in the country.
- Some scholars propose the idea of linking a company’s social compliance data with its business financial data to evaluate the business implication of CRS practices.
- Some studies compare the labor practices between Bangladesh and other developing countries in South Asia such as Cambodia and Sri Lanka.
- Some people suggest using case studies to develop hypotheses for a policy change.
- More and more studies are now conducted based on field trip and interview in Bangladesh.
8. Criminal charges recently are filed against a dozen individuals and companies identified responsible for the Rana Plaza tragedy.
9. Response to the Rana Plaza tragedy has further led to a discussion on the broader economic, social and political reform in Bangladesh.