Bangladesh's ready-made-garment industry in the aftermath of the Rana Plaza collapse
On April 24, 2013 in Savar, Bangladesh, an eight-story garment factory collapsed, killing 1,127 people.
Every year factory fires and other incidents take the lives of Bangladeshis, mostly young women who, in spite of this, work in Bangladesh’s Ready-Made-Garments (RMG) industry with a great sense of hope as they make gains in gender equality through employment and contribute to the growth of their country. McKinsey forecasts that Bangladesh's RMG sector could soon surpass that of China’s to reach $30 billion by 2015 and $50 billion by 2021. If Bangladesh can solve the human rights abuses while maintaining its competitive advantage, the sector would solidify its role as the country’s single greatest weapon against poverty.
But most human rights reforms are led by activists and regulators who either don’t understand business or are openly hostile to it. The result is perennial gridlock as people continue to suffer.
In 2014, I recruited my friends Christopher Cugliari, a Columbia MBA candidate at the time, and Connor Chelsky, now at Impact Engine, to conduct an independent study of Bangladesh’s Ready-Made-Garment (RMG) industry post Rana Plaza.
Building from my contacts in the country from a film I had previously produced there called Strong Bodies Fight, we scheduled a complete cross section of the sector. We began by visiting the site of the Rana Plaza collapse, spent time with survivors in their homes and interviewed communist activists fighting on their behalf. We then visited factories producing for Calvin Klein, Nautica, and others. We met with the CEO of the largest Bengali-owned fashion brand and with JCPenney’s Director of Social Responsibility. We met with reformers from “the Alliance” and “the Accord,” including the director of the latter, and shadowed one of the Accord’s fire safety inspectors on his evaluation of a major factory. I met with the CEO of Hathay Bunano, maker of Pebble brand’s fabrics-based toys, whose scalable model for rural production was especially inspiring for its environmental and cultural benefits.
At a TESCO “Supplier Day” with 32 factory managers, a young woman discussed TESCO’s commitment to partnering with factories to improve safety. One of the 32 factory managers leaned over and whispered, “She’s sincere, but she’s not the one who calls me to cut our contract if I raise my price two pennies so I can afford new fire sprinklers.”
Our takeaways were many and included these: 1) sweatshops won’t be beaten by regulators; they’ll be beaten by better businesses; 2) companies need to integrate their values vertically throughout the supply chain, instead of siloing CSR in a separate department with no influence over operations or supplier relations; 3) despite the challenges, investment opportunities abound in Bangladesh, and indeed throughout the developing world.