Subcontracting refers to when products are made in factories that have no direct link to the company it is producing for. This happens when the factory that a brand is directly supplying from passes down some of the production down to another factory.
This poses a lot of problems.
Many of these factories will be unregistered, and so do not undergo any governmental labour inspections. These factories also don’t have a formal contract with the brand, and are therefore hidden and unregulated by brands who may have their own inspection programmes.
As a result, this paves the way for poor working conditions, with lower wages, increased overtime, lack of health and safety protections, and abuse towards workers, as there is no regulation.
Factories often subcontract work that is given to them by brands without informing them because of the pressure brands put on factories to meet their demands at the low costs and fast delivery expected. In particular, there is a lot of pressure to complete orders in the tight deadlines given to them, and pressure to meet the unanticipated last minute orders they are expected to complete. Brands can demand a discount on their orders if factories are unable to meet their demands, thus increasing pressure to meet them.
One example of the dire consequences of subcontracting is the Tazreen Factory Fire. On 24 November a fire broke out at the Tazreens Fashions factory in Bangladesh, killing 112 factory workers and injuring many more. Despite the fire alarms going off, management ordered workers to keep working. When workers tried to escape, escape routes had been locked by management. Many workers died trying to escape by jumping out of the window, while many died trapped inside. It was found that the brands sourcing from the Tazreen factory, including Walmart, had not authorised the factory to supply for them, and that their direct suppliers had subcontracted work to the factory.
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