A global trading system where low paid factory workers put their lives in danger every day to produce cheap clothes for consumers who are themselves much better off is seriously flawed. The recent devastating fires in Pakistan, Bangladesh and also in China show the dark side of globalisation.
Main blame can and should be put on those who caused the disasters, who neglected fire safety rules and who locked workers into these death trap buildings. A heavy responsibility falls also on those politicians and government authorities who failed to ensure that even basic fire safety provisions would exist, which are effectively enforced in their countries.
Pressed by hard price competition on their consumer markets, buyers are often not prepared to pay enough of a premium for decent and safe working conditions. There also tends to be a push for fast and large deliveries that invite and force factories to grow production capacity in ways that make working conditions deteriorate even further.
This surely played in when fire struck both at Ali Enterprises in Pakistan in September, and Tazreen in Bangladesh in November. New floors were added illegally by the factories, large numbers of temporary workers were crammed into the dangerous facilities, and whatever space could be found was apparently filled with both raw materials and products. When fire broke out, the buildings became huge furnaces, with the few exits blocked or locked by management to hinder products to be carried out.
On-going investigations and judicial processes are now trying to uncover what really happened and to establish the legal responsibilities. What they would probably not show is the role of corruption in causing these deaths, with authorities clearly having turned a blind eye to enforcing safety provisions, probably also requested so by influential factory owners and managers.
Pakistan and Bangladesh placed 139 and 144 in this year’s Transparency International corruption index, out of 174 countries. Their public sector corruption levels were assessed to 26 and 27 on a scale of 0 to 100 where 0 is totally corrupt and 100 totally clean. In both countries, apparel production for the world markets is critically important, and competition with other global producers is brutal. Under these circumstances, protecting workers and their rights cannot be left only to local authorities.
The situation is not helped by the weakness or total lack of trade unions or other genuine workers representatives in most supplier companies and workplaces. Workers are not empowered to influence their conditions, neither can they monitor them and ring the bell when their conditions are dangerous or otherwise unacceptable.
This is also why corporate social responsibility programmes and audits figured in connection with both the Ali and the Tazreen fires. Many if not most of the large international brands and retailers need and want to make sure that certain minimum social conditions apply in their supply chains. This is a demand from end consumers, but also linked to their ethical codes when they exist. It is also an important part of corporate risk management.
Both in Pakistan and in Bangladesh, the factory fires unearthed important shortcomings of this audit system. In the Pakistan case, local subcontractors to Italian audit company RINA have clearly not done what they were supposed to do, and the effectiveness of the mother company’s ‘distance-oversight’ has been questioned. In Bangladesh, the group that owns Tazreen had apparently placed production to this sub-standard and dangerous plant even if they had no acceptance for this from the buyers. These are all issues that need to be looked closely at when the whole system is reviewed.
Even if we already know much about what went wrong here, we would need to wait for the more formal local inquiries and court cases to bring whatever light they can to these man-made disasters.
The Ali Enterprises factory fire in Karachi, Pakistan cost the lives of nearly 300 workers, most of them young women. Very soon it emerged that the Italian auditing company RINA had only some weeks before had the factory audited and subsequently granted it an SA 8000 Certification. This was so recent that the news came as a total surprise also for Social Accountability International SAI, which owns the SA 8000 Social Standard.
The following weeks were to be dominated by one issue – intense pressure from some social campaigner organisations on SAI to publish the names of international brands and retailers that were buying from this factory. Both SAI, which does not have access to audit report contents, and the independent but related oversight agency Social Accountability Accreditation Services SAAS referred to their legal confidentiality obligations and declined the requests for releasing audit contents.
I can confirm this as a member of the Board of Directors at SAI, who did of course seek the advice of legal counsel. But also as a trade unionist I insisted on the confidentiality of audit reports under all circumstances. This confidentiality is necessary to protect workers and others who speak out on problems at supplier workplaces and who can face serious risks and even danger if their identity is revealed.
A certain irony was – if the word can be used in this tragic context – that there cannot even be a buyer list. Almost all production went to one large German retailer, which was already identified and had confirmed this. Also, the SA 8000 audit format is such that it does not ask for information concerning buyer identity. It is now being discussed whether this should be changed.
That there was an SA 8000 Certification – however flawed or dishonestly granted it was – was a coincidence. The factory had previously been audited by another CSR initiative, although their certification had been withdrawn much earlier and had not been valid for a considerable time.
A disturbing dimension to this whole issue is that the government of Pakistan has actively pushed apparel factories to seek social certification, and contributed financially towards this. As such, one could think that there is nothing wrong with this practice. After all some western European countries encourage similar approaches. What makes the Pakistan approach much more problematic is that it clearly aims at gaining a competitive advantage on the global markets without necessarily leading to an improvement of conditions.
Looking at this now, after the Ali Enterprises disaster, the government involvement should have led both the social auditing community and oversight institutions such as SAAS to tighten their controls. SAAS did issue an alert to the auditors – certification bodies – and asked for caution, but now we see that this was not enough of a warning signal for them. Instead, the deteriorating security situation in Pakistan lead auditors to the opposite. Local subcontractors performed the audits and certifications were issued from far away without sufficient involvement. The government subsidies that were provided as an encouragement for seeking certification apparently created a reluctance to deny certificates, which meant that eyes were closed where they should not have been.
One of the lessons to be drawn from this tragic fire in Karachi is to put in place much more stringent controls and also define the conditions that must exist for credible audits and certifications to be issued. This is now well underway at SAAS, perhaps late in the day if one is self-critical, but a necessary thing to do. Much details on how SAAS has followed up can be found on the SAI webpages at www.sa-intl.org . In my view it is an impressive work which hopefully will lead to major improvements to the whole audit based system of monitoring and reporting on supply chain working conditions.
Yes, this will make audits more expensive, but if it is necessary for their reliability it is a cost that has to be taken.
All this has been and still is a crisis for the whole CSR approach on conditions in global supply chains. Voices have already been raised that declare the death of these voluntary initiatives. The more radical campaigners that like to target leading multinationals have been vocal in these demands. Their view seems to be that exposing these buyer companies and their practices and pressing them to make concrete changes in their supply chains is more efficient than the work done by multistakeholder or business driven schemes and initiatives.
There is surely a genuine frustration behind this reaction. To translate social commitments and ethical codes into a change in buying practices is a slow and tedious exercise. One can also ask – with much justification I think – whether all corporate decision makers and commercial managers understand the needs for improved social supply chain conditions, beyond the most basic risk management, and accept the expenses that this entails.
Regrettably, some social campaigners give the impression of being worried that their role diminishes if business itself starts to do some of the things voluntarily that they have been pushing for so long. Many doors are already open, not necessary to kick them in, and it is perhaps not so easy to find a new task that is interesting enough to draw substantial support. The often aggressive way that this is driven, questioning systematically the motives of large global buyers , and the right of existence of CSR initiatives comprising brands and retailers, may prove to be a disservice for these campaign and advocacy organisations themselves.
There is also a political agenda. Exposing real or perceived supply chain problems can also be a part of campaigns to force changes in the employer behaviour of these brands and retailers, many of whom are not unionised, particularly in the United States. I know this so well from my years in the trade union movement. This was discussed in depth also when my organisation UNI Commerce decided to engage in various CSR programmes, including SAI, the Business Social Compliance Initiative BSCI and the Global Social Compliance Programme GSCP. Many companies that we were to work with in these structures were opposed to our affiliated trade unions organising their own personnel.
Our final decision, unopposed, was to get on board, to influence from within, and to make sure that no ‘window-washing’ is possible. This showed a mature and responsible attitude among the affiliated commerce trade unions, who did not want to use the supply chain workers as tools to reach their own goals at home. This reflected very well the ethical and moral values that should always define the labour and trade union movement.
One would hope and expect that also now the leading unions and particularly the global union federations focus on correcting the flaws with CSR initiatives and social auditing, rather that distancing themselves. It is clear that audit based systems can never replace a genuine worker empowerment to influence their own conditions through trade unions, social dialogue and collective agreements. The fact is, however, that in many parts of the world we are still far from this situation. If we would now give up these voluntary CSR schemes and initiatives, however insufficient they are, there would be nothing to replace them with. It would be a huge disservice particularly to the very large numbers of supply chain workers and their families who depend on this support.
Ideological differences and other interest conflicts must now be set to the side, and we must focus instead on concrete measures to help create a safer and more decent world of work also where people themselves are still unable to do it on their own. Much has already been done on the ground. Some large retailers have reached out to hundreds of supplier factories with training and awareness raising about fire safety, including brands such as H&M, Carrefour and others. This means that there is something practical to build on.
It is, however, clear that also structural changes must be made. Multi-storey factories in closely built urban quarters, often without building controls and authorisations, will always be deadly dangerous. Production sites that can continue to be used need to be reconstructed to provide good fire safety conditions, and effective escape ways must be there should catastrophe strike, as should quality fire fighting equipment. This costs money, and at the end buyer companies and their own customers – the consumers in developed countries – have to be prepared to participate and enable these necessary measures.
Fire safety is an urgent and important area where a broad coalition of business, governments, unions and campaigners is needed to bring about real change. I am pleased that we have began to see signs of this forming now.