Most Recent Articles In The Markets Features
Latest The Markets Features Articles
- Think Tank: Looking at the Influential Role of Color
- Licensing Deals Driven By Omnichannel Retailing, Changing Consumer Preferences
- Atlanta Buyers Poised for Strong Fall Sales
More Articles By
The office of the Alliance for Bangladesh Worker Safety reflects everything that the factories could use: it is gleaming, clean and functional, with a training room for the trainers and two conference rooms, all of which were used last week as members of the board flew in.
The team has a strong local mix and getting the operations off the ground is clearly happening rapidly: all factory inspections are expected to be completed by September. Here, Ian Spaulding, the alliance’s senior adviser, talks about the progress.
WWD: Has a lot been done in this time since the alliance has started?
Ian Spaulding: It’s been a year, but the alliance was formed in July, so in the nine months or so a lot has got done. So that is the silver lining in terms of Rana Plaza and its influence on global supply chains, but the reality is there is still so much more work that needs to be done. So it’s bittersweet and all of us should be proud of where we are, but when you think of the long-term needs and our overall plans and objectives, we are really at the very beginning phase of this effort.
WWD: Looking at it from the ground level, working here in Bangladesh, what have been some of the major milestones?
I.S.: First, I think, is that 26 companies in the alliance joined in an initiative to upgrade the garment industry. The fact that they joined forces is a significant step because they didn’t want to repeat the same mistakes of the past in terms of duplicating efforts and fragmenting our leverage and distracting from real progress.
The next milestone is we have a member agreement that is legally binding that requires these 26 brands to do certain things. The most important of that, of course, is to inspect factories and remediate factories, but it is also to report publicly on our progress and to release all the inspection data periodically. Those are important commitments that the alliance has made.
We also have to address some of the root causes of Tazreen and Rana Plaza and one of those is that workers did not know what to do, they were not empowered to stand up and speak on their own behalf, they did not have a worker representative who would allow them to stand firm when managers or supervisors are telling them what to do.
WWD: Is training one of the major milestones?
I.S.: So one additional milestone is this basic fire training program, which is geared to train 1.1 million workers by July. We’ve already trained more than 400,000 workers, so we’ve made tremendous progress, building that training and launching it.
Another one is that we are building the infrastructure so that we can do remediation in a structured manner. For example, today there are no domestic manufacturers of sprinkler systems or fire doors. They simply don’t exist. So we organized an expo to bring in companies who do these from around the world, and had more than 3,000 participants. We realized that the cost of doors and sprinkler systems was very high. The government taxes this so we thought let’s try to create a local market, but also try to eliminate the taxes on these.
So in the next few days you should hear an announcement where the government will eliminate or significantly reduce the duties on those fire doors.
The last thing is that we have assembled individual companies that will give out $100 million in low-cost loans. It is a real commitment, it is real money. The cost of capital in Bangladesh is 14 to 18 percent in the local banks and we will be providing at no cost or 3 to 4 percent.
WWD: How have employers responded to alliance team members?
I.S.: It is hard to say that all factories react the same way. Some factories are going to be scared and anxious about anything that we do. They’re scared of the ramifications or losing their business. Others view it as a way to strengthen themselves and tell workers their factories are safe. What we’ve done that is different is that we’ve brought stakeholders along. We have members of BGMEA on our board, we’ve done a fair amount of outreach to members of the industry to establish good relations with them; in addition, we have offered mini training and orientation sessions for factory owners so that they can understand more about what we’re doing. We have partnered with Bangladeshis and have an office run by Bangladeshis in Bangladesh. The team is there to run this program with our support. With the staff that we have selected — we provide local support, local engineers with international oversight and support, and that is a very different model.
It’s part of the need to build long-term suitable solutions.
WWD: The reports of the inspections cited that at least 40 percent of factories so far are in shared spaces. Is that a matter of grave concern?
I.S.: Well, it’s kind of a complicated issue. Shared spaces for multitenanted buildings are actually at a higher risk than other buildings. The number-one reason is that they’re not necessarily purpose-built and are retrofitted to become an industrial building. Second, if they are multitenanted, they might be just fine.
In a multitenanted situation you would have to coordinate between different owners. So the position of the alliance is that multitenanted factories are perfectly acceptable so long as we have access to the entire building, so long as fire and safety is maintained throughout the building, not just for the floor where a factory is working for an alliance member.
WWD: Looking ahead, is it more heartening?
I.S.: The growth is there, but let’s make sure we recognize that. The smaller factories that do not comply, that do not meet certain factory standards, will not survive. They will go out of business, their business will reduce. And that’s what should happen. The factories that are investing will continue to grow. And overall, our hope is that the business within Bangladesh will continue to grow and prosper. We want to make sure the entire industry grows, but we want to minimize and eliminate these factories which pose a health and safety risk to the workers.