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24 Apr 2020

Worker Rights Consortium

Commentary: Rana Plaza factory collapse and fall out of COVID-19 for garment workers highlight the power imbalance & exploitation underlying global garment supply chains

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“Two crises, one flawed supply chain model: How the imbalance of power in global supply chains harms worker”, 23 April 2020

… [T]he Rana Plaza factory collapse … put a spotlight on the grossly unsafe labor conditions plaguing Bangladesh’s garment sector and catalyzed fundamental reform.

… [I]nternational attention and public outrage … forced brands to agree to sign the … Accord on Building and Fire Safety in Bangladesh …  [T]he  … Accord has resulted in sweeping improvements in safety conditions…

On the seventh anniversary of the Rana Plaza tragedy, the well-being of millions of garment worker is again at grave risk … [B]rands and retailers have abruptly halted production and canceled orders across their supply chains. Many brands are refusing to pay for apparel that suppliers have already produced … leaving [suppliers] unable to recoup their costs and pay workers.

Brands and retailers’ responses to the pandemic have had a devastating impact on … millions of workers [who] have been suspended or terminated with little or no compensation … [and] risk economic destitution … Informal, home-based, and migrant workers are especially vulnerable …

… [The crises] were both made worse by a flawed supply chain model ... Brands and retailers’ market power allows them to dictate how profits are made and distributed … [resulting in] an ever-smaller share for suppliers.  This … has meant unsafe practices, poverty wages, and non-payment of benefits, including compensation due to workers when they lose their jobs.

A glaring example of the inequities … are the terms of payment between buyers and suppliers … [S]uppliers … must cover all the up-front cost of apparel production … Brands don’t pay … until weeks or months after they receive the finished goods. In effect, suppliers with a tiny fraction of the financial resources their customers possess are required to subsidize their customers’ cash flow.

Brands and retailers are now taking advantage of … [this] to protect their own bottom line at suppliers’ expense …

In response to garment union protests … a number of brands and retailers have recently … committed to pay in full for all apparel orders already in production or completed, greatly reducing harm to suppliers and workers …

… [I]t is imperative that buyers honor their obligations ... Beyond the immediate crisis, fundamental reform to address the deep inequities of the existing supply chain model are a prerequisite for the living wages, safe conditions, and basic economic security every worker deserves.

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