Eight years after the Rana Plaza Disaster, we still aren’t doing enough to protect garment workers

April 29, 2021
ESG Insights

It is estimated that 100 pairs of hands touch your clothes before they arrive in your wardrobe. That’s 100 people at risk of modern slavery, poor working conditions, and exploitation.

Eight years have passed since the collapse of the Rana Plaza factory complex in Bangladesh resulting in the death of 1,134 garment workers and 2,600 injured. This massive tragedy drew attention to pervasive human rights abuses in the garment sector, as well as the failure of the Bangladesh government and corporations sourcing there to create workplaces that both protect and respect the lives of workers, and mitigate the risks to companies and their investors.  

Directly following the collapse, the Interfaith Centre on Corporate Responsibility (ICCR) formed the Bangladesh Investor Initiative – currently comprising 250 institutional investors with over $4.5 trillion in assets under management - to press global companies sourcing in Bangladesh to become directly involved in helping to transform the Bangladesh apparel sector. The accord was a comprehensive independent agreement to make garment factories in Bangladesh safer by requiring independent building inspections and reviews of safety standards.

Unfortunately, the existing Accord agreement, which only applies to Bangladesh, expires on May 31st – with campaigners calling for brands to sign a new international contract to ensure the safety of garment workers in other countries globally, too.

The timing of the expiration of this accord could not be worse, with COVID significantly restricting monitoring and visibility in supply chains, whilst simultaneously increasing pressures on suppliers that will undoubtedly lead to increased worker vulnerability.

Since Baptist World Aid began publishing the Ethical Fashion Report in 2013, they’ve seen a 32% increase in companies who are tracing inputs suppliers (like fabric mills), and a 31% increase in those tracing raw materials suppliers (such as cotton farms).

If this agreement is not renewed or an international contract is not signed, progress that has occurred could be set aside. Since this program began, two and a half million garment workers have been working under safer conditions. However, in the past two months alone, more than 40 garment workers have died in the Middle East and North Africa region due to factory safety issues. It is clear there is still more work to be done.

It is for this reason that Ethical Partners has recently signed the Investor Statement in Support of the maintenance and expansion of the Bangladesh Accord that is urging global brands to sign a new legally binding agreement with global unions that:

1. Includes enforceable obligations for brands that ensure worker health and safety is protected;

2. Maintains the role of the Accord secretariat as an independent mechanism of accountability for the RMG Sustainability Council;

3. Is international in scope, providing a framework to expand the Accord’s lifesaving inspection and remediation program to other countries where garment workers’ lives are at risk from fires and structural failures.

By signing this statement, Ethical Partners are committing to promoting the power of the Accord model in our corporate engagements both to safeguard the health and safety of workers in Bangladesh and in global supply chains in other countries.

Ethical Partners has been engaging on this issue since our inception in 2018, with one of our very early “Our Views” articles focussing on this in August that year. We have been active supporters of the NGO’s Oxfam and Baptist World Aid in their campaigns with Australian corporates to improve working conditions in the garment supply chain, and we continue to engage with ASX companies who have yet to sign on to the accord.

We commend Woolworths and Wesfarmers (Target and Kmart) for signing on to the accord, and for their work in disclosing their factory lists and having clear sourcing policies. This transparency and commitment is vital for investors to have faith that the companies are committed to ensuring the labour rights of the workers in their supply chain are upheld.  

We also commend Kmart and Target for their B and B+ ratings on the Baptist World Aid Ethical Sourcing Guide respectively, which considers 44 specific criteria along 3 critical stages of the supply chain: raw materials, input production and final manufacturing. Worryingly, this analysis has found, however, that whilst there have been some improvements over the last few years, still only around 18% of companies trace their inputs, and eight% of companies trace raw materials. Ethical Partners remain committed to continue to engage with those companies that rate poorly on this criteria.

Additionally, Ethical Partners continues to view favourably for investment those companies who have demonstrated their commitment to improving the lives of workers in their supply chains, which we believe not only carries a very clear moral imperative, but also reduces real financial, reputational and brand risks for these companies.

We will continue to engage with all ASX companies to uphold the commitments of the Bangladesh Accord, regardless of when it expires, and to continually improve their polices, practices and impact on garment workers in their supply chains.

See Full Statement attached

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