Buyers continue to exploit RMG factories despite improving safety: Report

Safety in large export-oriented garment factories in Bangladesh has improved but global apparel brands and retailers continue to put exploitative economic pressure on the factory owners, according to a global report.

It also showed that the low-paid workers are the worst sufferers of such practices as factory owners are responding to these exploitations by reducing wages and benefits for their workers.

"In the decade since the Rana Plaza disaster, safety in large export- focused factories in Bangladesh has improved. But the purchasing practices of global buyers have remained onerous and, in some ways, have grown worse in the wake of the pandemic," reads the report.

New York University Stern Center for Business and Human Rights published the report titled 'A Broken Partnership: How Clothing Brands Exploit Suppliers and Harm Workers - And What Can Be Done About It' on April 11 ahead of the 10th anniversary of the Rana Plaza factory collapse that occurred in April 2013.

It described efforts by major brands, through multi-stakeholder initiatives, to inspect factories and make upgrades such as fire alarms, sprinklers, extinguishers, and fire doors.

But the report urged greater attention to the failure of major apparel brands and retailers to take responsibility for the effects that their policies and practices have on poor garment workers even after a decade of factory-safety reform.

It also made a set of recommendations for how clothing brands and retailers can establish more constructive relationships with outsourced suppliers, with the goal of protecting the human rights and economic well-being of workers.

NYU Stern said that based on interviews with suppliers and workers in Bangladesh, the report illuminated harmful practices of corporate buyers and their representatives, some of which became extreme during the Covid-19 pandemic and persist in more subtle forms today.

The study identified that during the pandemic western clothing brands were exploiting their suppliers in South and Southeast Asia including Bangladesh through pressuring for unreasonable price reductions, delaying and cancelling orders resulting in layoffs of hundreds of thousands of workers.

"Economic conditions began to ease in 2021, and major clothing brands and retailers, whom we refer to collectively as 'buyers,' rescinded some of their harshest measures. But some practices unfavorable to suppliers in Bangladesh and elsewhere persisted, often in subtler forms," the report said.

Even though the Covid crisis has eased, the report said corporate buyers have continued to engage in exploitative practices that included pressuring suppliers for unreasonable price reductions, delaying delivery and withholding payment, canceling bookings and projections and reliance on third-party sourcing intermediaries.

Other factors, according to the report, put additional economic pressure on suppliers, including expensive new environmental mandates to reduce water use and carbon emissions.

"Global brands typically decline to pay for or otherwise incentivise these "green" initiatives. The combination of unforgiving purchasing practices and other expectations has exacerbated pressures on suppliers that keep factory wages low and can lead to the mistreatment of workers," it said.

The report recommended to brands and retailers ending unreasonable price reductions and excessive discounting practices for reducing economic pressures on suppliers to encourage better treatment of workers.

Its other recommendations included ceasing the delay of order delivery and committing to payment timelines that account for raw material purchases; recognising supplier projections as firm commitments and increasing transparency and communication with third-party sourcing agents.

It also suggested reconciling commitments to factory safety and worker wellbeing with commercial commitments to manufacturers.

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