Anner (2018): Binding Power: The Sourcing Squeeze, Workers’ Rights, and Building Safety in Bangladesh Since Rana Plaza

Very important research evaluating whether working conditions have improved in Bangladesh since the Rana Plaza collapse in 2013. Click here.

Notes I done made (these were made when researching my dissertation topic so not everything in the paper will be included here, just bits that were relevant for me and points I found interesting):

The sourcing squeeze and apparel supply chains

  • Trade liberalisation after Multi-Fiber Agreement -> garment industry had to push down costs to compete with China’s workers
  • Power imbalance between suppliers and buyers(brands)
    • Price squeeze- brands seek to lower prices paid to their suppliers- leads to wage decline and poor working conditions
    • Lead time squeeze- brands demand goods are produced in shorter periods
  • Price decline in amount paid for produced goods in Bangladesh, price squeeze by companies- not a result of external features

Profits, lead times, payments and order specifications

  • Decline in profit margins for suppliers as a result of increased production costs, as brands do not want to financially support increased production costs
  • Push for shorter lead times (time given for factories to make and shift a product) -> because brands keep wanting to push out new styles to sell more products (fast fashion model), retailers looking for greater speed
  • Increased pressure on suppliers to meet demands for products and speed especially when lead times are adjusted at short notice, leads to forced overtime and unauthorised subcontracting
  • Research shows lead times have reduced

Sourcing squeeze, wages and workers’ rights

  • After Rana Plaza -> increased minimum wage from 3,000Tk to 5,300Tk, but still lowest among garment industries globally
  • These low wages still don’t cover living needs
  • Still issues with labour law e.g. December 2016 protests, which led to arrest and dismissal of workers. International pressure on BD government to stop persecution of workers e.g. European Parliament passed resolution that BD needed to address persecution of trade union leaders and poor working conditions
  • International pressure led to some labour law reforms e.g. easier for trade unions to register
  • Increased unionising after Rana Plaza after international pressure, but there is an increased tendency of the  BD gov to deny union registration and continued anti-union practices by employers
  • Since 2000, there has been an increase in violation of workers’ rights, increased following Rana Plaza collapse

Accord on Fire and Building Safety

  • Significant progress in building safety because of the Accord
  • Brand are legally bound to the Accord
  • The Accord Steering Committee consists of trade union reps, brand reps, and the ILO as a chair- oversees operations, and decision by consensus/majority vote
  • Advisory board-> representatives from supplier factories, sourcing agents, Ministry of Labour, trade union federations, brands, BD civil society organisations
  • When a building is found to require an evacuation for immediate remediation, recommendation is sent to a Government Review Panel, who can overturn the decision
  • Transparency: information provided on factories, progress updates, worker complaints, steering committee meeting minutes, advisory board meetings
  • Safety committees- worker-manager committees, encourage worker participation, involved in safety training etc. Not democratic as agreed in the Accord
  • Complaint mechanism: worker complaint mechanism elevates workers’ voices
  • Binding Arbitration: Legal incentive for brands to meet obligations e.g. two cases held against brands for failing to meet requirements of the agreement resulted in settlements in both cases

2018 Accord

  • Aims to ensure BD gov and state institutions have the capacity to ensure building safety for all factories
  • State system of regulation needed
  • Safety committees and training for all factories
  • New: training on freedom of association and role of industrial relations
  • Potential expansion