BUSINESS
04/24/2014 07:34 am ET Updated Apr 24, 2014

A Year After Deadly Collapse, Bangladesh's Garment Industry Remains Broken

NEW YORK -- A year after a building collapse killed more than 1,100 people at a factory in Bangladesh, the country's garment workers remain exposed to dangerous work conditions, untouched by widely publicized reform efforts from major retailers, according to a new report.

Released Monday by New York University's Center of Business and Human Rights, the report found that the two major safety plans launched by coalitions of international retailers in the past year -- though unprecedented in size and scope -- fail to address the "greatest risks" facing millions of workers.

Less than 2,000 factories in Bangladesh will be covered by the international programs, report co-author Sarah Labowitz said in a presentation at NYU's Stern School of Business on Tuesday. That's out of a total of about 5,000 to 6,000 factories and facilities in the country.

"There is a universe of factories registered with the trade association and a universe of factories that aren't registered at all," said Labowitz, the co-director of NYU's Center for Business and Human Rights. "How you cover that remaining group of factories is a big question."

After the deadly catastrophe at Rana Plaza, the factory building outside Dhaka that collapsed last April, retailers came together to form two separate pacts: the Bangladesh Accord on Fire and Building Safety and the Alliance for Bangladesh Worker Safety. The Accord is largely made up of European companies, while the Alliance was spearheaded by the most powerful apparel companies in the U.S. The pair encompass more than 175 global retailers, including industry titans like Walmart, Zara, H&M and Gap.

Inspections of Bangladesh's garment factories are underway. The Alliance has inspected 400 factories thus far and the Accord has looked at 300. They've found serious problems throughout the network of factories, according to a report from The New York Times.

"The Alliance -- like the Accord -- focuses efforts on the factories from which our member companies source," Ellen Tauscher, chair of the Alliance board of directors, said in a statement to The Huffington Post. She added that the organization is working closely with the government of Bangladesh and other parties "so that equivalent standards can be developed and used broadly across the entire industry."

Representatives from the Accord did not respond to a request for comment.

But the problems facing the garment industry in Bangladesh span far beyond the need for inspections. The horror at Rana Plaza sheds light on a systemically flawed industry that some feel retailers have lost control over.

The way retailers purchase clothes from factories -- often indirectly, through sub-contracted orders -- creates a chaotic atmosphere in which retailers may not even know where their own products are being made, according to the NYU report. Suppliers look to subcontractors when they're unable to meet the stringent demands of retailers, which are always pressing to keep their own stores stocked with clothes. This allows garment orders to end up in factories that are off the grid and often don't meet minimum safety standards, dodging the eyes of regulators.

By ordering clothes through subcontractors, the supply chain becomes much more complex and nearly impossible to control. Following the deaths at Rana Plaza, Italian retailer Benetton first claimed it wasn't involved with any of the factories inside the doomed building. Once photos of Benetton clothes within the rubble emerged, the company changed its tune. Chief executive Biagio Chiarolanza explained to The Huffington Post that one of his Indian suppliers had subcontracted two orders from one of the factories. The company blamed the flip-flopping on the vastness of its supply chain, which includes 700 manufacturers around the globe.

Meanwhile, the government of Bangladesh remains largely powerless to do anything about worker safety, hamstrung by corruption and lack of resources. Weak labor laws and enforcement have allowed power to remain with the local industry, stalling regulation efforts. The garment industry makes up a staggering 80 percent of the country's exports, allowing the major players to have serious influence in politics.

"The government of Bangladesh lacks the political will, the technical capacity and the resources necessary to protect the basic rights of its workers," the Monday report states, calling for the local government to reclaim its own regulatory system, rather than outsourcing it to foreign-funded watchdogs.

Many families impacted by the Rana Plaza tragedy still await remuneration. Retailers, NGOs and the government of Bangladesh came together to form a compensation program considered "groundbreaking," but the money pool remains grievously underfunded. Brands have committed $15 million to the fund, falling well shy of the $40 million goal. Anglo-Irish retailer Primark, which admitted it had clothes made at a factory in Rana Plaza, has contributed $7 million.

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