Workers' Rights Fashion Industry Tackles Factory Conditions

Retailers are scrambling to get in front of the news that textile workers in Bangladesh are being underpaid, in addition to being arrested and shot at when they have the nerve to go on strike. While many brands are calling for fairer pay, it is unclear who will end up footing the bill.
Quelle: Bloomberg
Workers conditions in Bangladeshi textiles factories are becoming an important issue.

Even discount retailers like to advertise themselves with high-gloss images when it comes to fashion, featuring radiant models showing off their collections in exotic landscapes. But the reality in the countries producing these goods, however, is far less luxurious. Bangladesh, in particular, has not had great press when it comes to its textiles industry lately. 

Thousands of textile workers in Ashulia, a suburb of the capital Dhaka, recently protested against starvation wages and the arbitrary firing of their coworkers. They demanded an increase in the minimum wage, which is around €60 per month. But instead of negotiating, the factory owners fired thousands. The police also fired rubber bullets at the strikers, arresting dozens.

For a long time, Western fashion retailers and manufacturers have stayed silent about the conditions in their key supplier countries. However, in the face of this new escalation in Bangladesh, just three years after the collapse of a factory at Rana Plaza that killed more than 1,000, they once again fear for their reputations. Going on the defensive, the fashion industry is distancing itself from the factory owners and starting pilot projects to improve the production conditions.

 

All parties should return to the negotiating table and find a solution that takes account of the interests of the workers and the competitiveness of the site in Bangladesh. Ansgar Lohmann, Head of Sustainability and Social Responsibility at Kik

 

Patrick Andrist, founder of Omnibrand, a fashion sourcing company based in Hong Kong, called the actions of the factory owners and authorities “inhuman.” He connects orders from companies like Basler, Bogner, Breuninger and Peek & Cloppenburg with local factories and is very familiar with the conditions at each location. Wages are too low in many factories in Bangladesh, according to Mr. Andrist. “And that is exactly the reason why we want to make sure that we do not give orders to such exploitative entities,” he said.

Ansgar Lohmann, Head of Sustainability and Social Responsibility at the textile discounter Kik, considered the layoffs and the arrests to be a misstep. "Any further escalation of the situation should be avoided," he warned. "All parties should return to the negotiating table and find a solution that takes account of the interests of the workers and the competitiveness of the site in Bangladesh."

An Aldi Süd spokeswoman also backed the workers’ demands. There needs to be a suitable mechanism to adjust the minimum wage based on rising prices, she said. In Bangladesh, inflation is six to seven percent. The minimum wage, however, hasn’t been increased for three years. The protests are "understandable from the employee's point of view," the spokeswoman for the discount supermarket said.

Competitor Lidl apparently felt compelled to react too. The discounter published online its main production facilities for the approximately 650 suppliers of its own brands’ textile and shoe lines. "We want to create transparency in the supply chain and engage ourselves as a retailer in Germany with socially and environmentally compatible conditions with the manufacturers of our goods on site," said Jan Bock, member of the management of Lidl Deutschland who is responsible for purchasing.

Even Primark, the Irish retailer known for rock-bottom prices on its mass produced clothing, has responded. The managers there, along with those of 20 other companies such as Tchibo, C&A, Esprit and S.Oliver, have written a letter to the prime minister of Bangladesh. It calls for respect for workers' rights, condemns the arrest of trade unionists, and encourages the review of wages.

But the fact is that German discounters also rely on factories in Bangladesh where workers have criticized the working conditions. Both Kik and Aldi Süd admitted this when asked whether three factories supplying them were affected by strikes. Lidl didn’t disclose a number, but at least 18 of its 188 suppliers in Bangladesh have manufacturing facilities in Ashulia. Aldi Nord did not comment at all.

And despite all the official messages of solidarity with the workers, the willingness to pay higher wages is not yet very strong in practice. Kik, Aldi and Lidl, in their contracts with suppliers, only demand that the statutory minimum wage be paid. "In general, we do not block a discussion of this question," said Kik manager Mr. Lohmann. Within the framework of a textile alliance, an initiative of German Development Minister Gerd Müller, other textile manufacturers are talking about higher wages and improved working conditions, he said. Still, one must also keep competitiveness in mind, he added.

Fashion buyer Mr. Andrist is tired of the endless discussions. Together with the development ministry, he launched a pilot project a year ago to improve the production conditions in four factories with which he works. The plan is not only to improve social standards for the workers, but also environmental issues such as water consumption or carbon dioxide emissions, he said.

As the factories do not belong to him, he had to convince the owners first. As an incentive, he has paid €200,000 for investments, which was matched by the development ministry. "For some improvements, high investments are needed, but sometimes even small changes are enough," said Mr. Andrist. For example, better lighting in a sewing workshop would help the workers but also increase their productivity.

"These projects are not in competition with, but are a sensible addition to the textile alliance," said Bernhard Felmberg, undersecretary in the development ministry. The ministry promotes 32 different projects with companies on sustainability in the clothing sector. "We are very much paying attention to what is happening in Bangladesh. We see that there is still a huge need for action," he said.

Two years after it was founded, the textile alliance is slowly taking action. The companies that joined this initiative represent around 52 percent of German textile retailers, including Aldi, Lidl and Kik.

"By the end of January, members will be asked to define concrete measures to improve these and other grievances," Mr. Felmberg said. Each member had to create a road map with verifiable goals for improvement that would be reviewed by independent third parties in February and March. Then, at least, it will be clear how serious the textile discounters are about their commitment to fair working conditions.

 

Georg Weishaupt covers fashion and luxury goods companies for Handelsblatt. Florian Kolf heads the trade and consumer goods desk. To contact the authors:[email protected], [email protected]