Ten years ago tomorrow, more than 1,133 Bangladeshi workers were killed and 2,500 injured when the Rana Plaza factory complex collapsed on the outskirts of Dhaka, Bangladesh. The disaster is considered the second largest industrial accident in history and put a spotlight on fashion companies, which for the first time took responsibility for working conditions in their supply chain. Inditex either Mangothe largest Spanish companies in the sector, joined the global response from the industry that agreed to achieve greater security among their suppliers, which forced them to analyze their supply chain, hitherto unknown.
Photos of the rubble next to the labels of the biggest fashion companies in the world dominated the front pages. Many companies in the sector manufactured or had manufactured in those nine plants that collapsed, but the focus was not concentrated on them, rather it was understood that it was a structural problem. This is how the ‘Accord on Fire and Building Safety in Bangladesh’, the first multi-company agreement on safety and working conditions, signed by 200 companies.
Inditex, Mango and El Corte Inglés joined the ‘Accord’, an association that also includes union federations such as IndustriAll or Uniglobal, and NGOs, such as Clean Clothes or the Worker Rights Consortium. In fact, the largest fashion distribution company by turnover, Inditex, is part of the governing body of the ‘Accord’ and it has developed a very active policy from the beginning, according to the Amsterdam-based organization.
Currently, the ‘Accord’ has 190 associated brands and reaches 160 factories and two million workers. Through your activity Factory inspections are carried out, safety training is carried out, and problems found are resolved and monitored.. The entity monitors safety against fires, landslides and other accidents and, although it is not the main objective, they ensure union action so that the problems of the facilities can transcend. The contract between brands and unions is legally binding and also includes a complaint mechanism by workers. Specifically, from the association they indicate that more than 2,000 factories have been inspected and 93% of the identified dangers have been remedied.
Mango currently works with 132 factories in the country, including those of Tier 1, 2 and 3 suppliers. Inditex, for its part, has one of its strategic supply hubs in the country, with 452 factories. Although it is not the largest in terms of number of suppliers or factories, it is the one with the largest workforce: all the manufacturers that work for Inditex in the country have 929,404 workers. Tendam, owner of Cortefiel and the third largest Spanish fashion group, has not signed the ‘Accord’, although it has 42 suppliers and 30.3% of its purchases in Bangladesh, according to the latest data, corresponding to 2021.
For ten years, Spanish fashion has tripled its purchases in the country. In 2022, Spain bought clothing worth 3,650 million euros from Bangladesh, which placed it as the second largest supplier in the sector, only behind China, with 3,747 million euros of exports.
When the Rana Plaza collapsed, barely 1,046 million euros worth of clothing was bought from the country and it occupied the third position in the ranking, below China and Turkey. The weight that Bangladesh has over the total purchases of the sector has also shot up notably: in 2008 it was barely 4.8%, in 2013 it was already 10% and in 2022 it has exceeded 18%.
In order for brands to be able to get involved in the security of their suppliers, they had to overcome a first obstacle: knowing them. The Rana Plaza is partly responsible for the fact that companies in the sector have significantly increased traceability in their supply chain and, subsequently, their transparency.
Inditex currently knows every last one of its suppliers and is one of the few brands that knows how to say where the cotton comes from with which its garments are made, however, the company only makes the aggregated data public. Last year, the Galician company came to Uzbekistan to learn how cotton was produced, a trip it made together with the IndustriAll union federation, which does know the group’s suppliers.
The constant reviews and increased transparency between brandspromoted to alleviate reputational risk, cause that every year drop list providers. In 2022, for example, Inditex ruled out 47 suppliers, which are added to the 25 of 2021, the 44 of 2020 and the 56 of 2019.
One of the hot spots in the industry in Bangladesh ten years after Rana Plaza is the minimum wage, which stands at 8,000 taka (67 euros). The workers are asking for a raise, something that has not happened for five years. Currently, there are about 4,500 garment factories in Bangladesh. The sector accounts for 83% of exports and employs four million people in the country, 58% women.
On a global scale, Bangladesh also occupies the silver ranking of exporting countries in the sector. In 2021, according to the latest available data, the country shot up its exports by 21.4% compared to 2020 and equaled the data of 2019, up to 31,000 million dollars. The country concentrated in 2021 6.4% of the total exports of clothing in the world, according to the World Trade Organization (WTO).
‘Accord’ lands in Pakistan
After ten years, the impact of Rana Plaza has reached beyond Bangladesh. In December, ‘Accord’ announced the first steps to bring the same binding contract that exists between brands and unions to Pakistan, an agreement signed by 190 companies, including Inditex. In addition, this new edition of the agreement goes a little further and contemplates other health dangers such as sexual harassment, gender-based violence and excessive work hours.
According to data from the World Labor Organization (UNWTO), there are some 2.2 million textile workers in Pakistan, representing 6.7% of the country’s workers. In February, when only 35 brands had signed the ‘Accord’ in Pakistan, the program covered up to 400 factories in the country.
