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Raz Godelnik headshot

Latest Garment Factory Fire Shows Apparel Industry Puts Profits Before Workers

The holiday season is supposed to be a joyous time for the apparel industry, filled with pictures of happy consumers buying new clothes for themselves and their loved ones. Yet, somehow, this season seems to be going to opposite direction, filled with pictures from Greenpeace Detox campaign as well as from Pakistan and Bangladesh, where about 400 people died in the last couple of months due to fires in garment factories.

So instead of talking about the $386 that people are expected to spend on gifts this year, from which 51 percent, or $197, goes to clothing, the discussion has shifted to the  $30-$50 garment workers make a month, in return for hard work, long hours and exposure to unsafe working conditions.

The latest tragedies in the garment factories were devastating in particular – not because they spoiled the holidays for retailers and fashion industries, but because they show that with all the progress that we've made so far, we’re still up to our neck in exploitative capitalism. In a way, it reminded me what Aron Cramer, BSR President and CEO, said at the last BSR conference: “As we reflect on the past 20 years, it seems that everything has changed, and nothing has changed.” With all the progress made in the last 20 years after Nike and others were criticized for selling goods produced in sweatshops, it looks like we’re back to square one.

It’s important to note that these are not unique events, but only the latest ones – according to the International Labor Rights Forum more than 600 garment workers have died in such fires since 2005, and you can easily find similar reports of fires in garment factories in Bangladesh from a decade ago. In most cases, this is a result of a deadly combination of lax regulations in poor countries like Bangladesh combined with companies that are mainly interested in getting their orders filled at the lowest cost possible. While there’s nothing wrong with keeping your costs down, it seems like time and again companies fail to balance their willingness to reduce costs with their responsibility to ensure fair and safe working conditions in their supply chain.

It’s not that companies don’t do anything at all. Take Walmart, which was one of the main customers of Tazreen Fashions factory in Bangladesh where 112 workers died last month in a fire. The New York Times reported that a Walmart spokesman said the company stopped authorizing production from the factory, “many months before the fire,” but did not say why. He added that external auditors inspected the factory on Walmart’s behalf at least twice in 2011. According to the Times, the factory owner claimed the factory failed the audit last year due to excessive overtime (there was no mention of fire safety or other issues).

Walmart claimed it had no idea Tazreen was working for it (just like Sears did).  So what happened here? Well, the answer is simple – Tazreen worked as a subcontractor to a local contractor that Walmart worked with. This is not out of the ordinary - many times when garment makers receive large orders from retailers they send the work to factories that can deliver the order for a low cost.

Still, the main issue is not whether companies like Walmart can do a better job of ensuring that factories like Tazreen won’t be part of their supply chain. The issue is that these companies put lower costs first, and fair working conditions second, and create an environment where costs are squeezed at the expense of fair and safe working conditions.

Evidence was provided by the New York Times in a separate article about a meeting in April 2011 in Dhaka, Bangladesh, which brought together global retailers, Bangladeshi factory owners, government officials and nongovernment organizations, after several apparel factory fires in Bangladesh had killed dozens of workers the previous winter.

The Times reported that according to the minutes of the meeting, which were made available to The Times, Sridevi Kalavakolanu, a Walmart director of ethical sourcing, along with an official from another major apparel retailer, noted that the proposed improvements in electrical and fire safety would involve as many as 4,500 factories and would be, “in most cases,” a “very extensive and costly modification." “It is not financially feasible for the brands to make such investments,” the minutes said.”

Walmart might be the one that was exposed, but it is certainly not the only retailer or fashion company that makes it a zero sum game, where safety and fair working conditions of workers in the supply chain compete with low costs. This is exactly how exploitative capitalism is created, and therefore our hope was that companies will stop making these irresponsible equations. Apparently we’re not there yet.

How will fashion companies and retailers like Walmart understand that their perception of fair working conditions in their supply chain as a part of a zero sum game is wrong?  I doubt if they will reach this conclusion all by themselves without some pressure from stakeholders that will make clear that exploitative capitalism is just not acceptable anymore, even if it means that the clothes shopping on the holidays will be a little bit more expensive.  Can we do it?

[Image credit: Clean Clothes Campaign]

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and the New School, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.

Raz Godelnik headshotRaz Godelnik

Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.

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