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The retail supply chain on the ground

Clients and EOS spend a week in Dhaka

Home / Hermes EOS Blog / The retail supply chain on the ground – Clients and EOS spend a week in Dhaka

Naheeda Rashid,
18 December 2014
EOSSocial

Last week, clients joined Dominic Burke and me in Bangladesh to participate in engagement meetings. The following paragraphs are an initial account of the week and clients will see more communication in the following months on further outcomes and insights of the experience.

We arrived at Dhaka airport in Bangladesh on Saturday evening eager to begin our week of discussions and site visits with international brands, factory owners and workers, charities, government bodies and UN organisations. Our visit was to determine the next sets of priorities for the apparel industry and to ensure that the high quality suppliers selected by the retailers are adequately addressing the environmental, governance, efficiency, labour and building safety risks, the negligence of which has been blamed for the collapse of the Rana Plaza building in 2013, which killed over 1,100 garment workers.

Apparel everywhere
Just before reaching immigration, we came across a billboard advertising the first ever Dhaka Apparel Summit, which we were also to attend. This was the first sign of many illustrating the importance and scale of the garment industry in Bangladesh. It also reinforced to us why we were here. Responsible shareholders need to visit Bangladesh to see how the country is protecting its human capital.

But after only one day in Dhaka it became evident that ensuring proper supply chain management was never going to be an easy and straightforward task. For example, we found ourselves learning about the Child Marriage Act to understand the social factors that influence how business interests are aligned to protect the interests of the vulnerable.

To verify our understanding of how the system works, we met experts from different areas to find out whether there is a disconnect between the rules set in the wake of Rana Plaza and the on-the-ground management of companies in the apparel sector.

Openness
Throughout the trip we were surprised at how openly we were able to reflect on Rana Plaza with locals and assess the changes that have taken place since. We compared this to our experiences of engaging in other Asian countries where sometimes an obvious mismanagement of risks is followed by denial.

Lack of audit
We travelled on rough, dusty roads, surrounded by tooting vehicles, criss-crossing rickshaws and high-rise buildings. What became evident to us was the lack of regulatory oversight of the factories that were not covered by the auditing processes of the Alliance for Bangladesh Worker Safety and the Accord on Fire and Building Safety in Bangladesh – could this lead to another disaster? We passed factory after factory in the industrial area of Gazipur, knowing that some of the residential buildings could be used for unauthorised subcontracting, something the Accord and Alliance outlaw. In addition, we noticed that the views of workers are not necessarily sought or taken into account by some companies. We believe that engaging with workers beyond audit and training can only help the companies identify hidden risks and assess how corporate behaviours are being embedded in the culture. With 80% of the factory workforce being women and supervisors predominantly male, factories also need to address how they deal with sensitive and taboo issues, such as sexual harassment.

Remaining concerns
A lot of investment appears to have gone into improving fire and building safety. However, the question is whether the right resources exist to oversee this once the five years of Alliance and Accord auditing are completed. Our trip also helped us understand that implementing a fair living wage is a complex challenge but that there is scope for brands to collectively influence the Bangladeshi government. Worryingly, environmental management – particularly waste and water management – were absent from our discussions with companies.

Nevertheless, lessons seem to have been learnt from Rana Plaza in Bangladesh. Now it is time to transfer the learnings to other countries.

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