The prevailing model for addressing poor working conditions in the apparel supply chain is failing.
With the growth of truly global supply chains over the past 40 years, multinational brands and retailers such as H&M, Nike or Target have stepped in to serve as labour inspectors when local governments in places such as China, Bangladesh, Vietnam or Honduras have failed to fulfill these functions on their own. Under this "policing" model, brands inspect factories repeatedly, but do little to change the root causes of poor working conditions and face little accountability when workers' rights are violated, or even when workers die.
According to O'Rourke Group Partners, retailers buy polo shirts made in Bangladesh for $5.67 each and sell them for $14 in Canada. To meet these extreme price demands, factories in Bangladesh rely on extensive networks of subcontractors that are invisible to Western brands, where some workers see just 12 cents a shirt.
The indirect sourcing model is not unique to Bangladesh and has allowed explosive growth in the global apparel industry. But dependence on subcontracting firms outside the system of monitoring and inspection operated by Western brands leaves a significant part of the work force vulnerable to poor conditions .
Indirect sourcing models, by their nature, reduce accountability and transparency in the supply chain. Even the most compliant factory will never admit to a client it they cannot meet their demand; it needs the business too much. The extreme competition creates an environment of taking risks, even for factories that may have passed all their inspections. The pressures all around are so great that when garment workers in the Rana Plaza building noticed cracks early on, they were told to return to work in order to meet the demanding targets for that day. These workers, who were threatened with being fired if they left the building, knowingly returned to a situation that eventually cost lives and affected livelihoods.
In Bangladesh, the measure of success of the various inspection programs is how many unsafe factories are shut down. The right yardstick is how many workers are walking into safe factories every day. No matter which brand they happen to be sewing for, workers should expect minimum standards for safety at work.
To be sure, factory owners in Bangladesh and elsewhere have an obligation to improve standards in their industry. Consumers rightfully expect that the brands they wear have taken steps to ensure workers are not exploited. But the evidence is clear: Relying on Western brands to police a subset of the most well-resourced and well-connected factories isn't protecting enough workers. It's time to expand the circle of responsibility for working conditions in the supply chain to focus on establishing and enforcing minimum standards across all factories producing for the export market.
Responsibility for minimum standards should be shared among Western brands and retailers, their primary suppliers, Western governments, financial institutions, labour unions and philanthropic organizations. Undoubtedly, this will take significant resources, but the costs of inaction are tragically high.
Sanchita Saxena is executive director of the Institute for South Asia Studies at UC Berkeley. Sarah Labowitz is co-director for the NYU Stern Center for Business and Human Rights.