Apart from being a big buyer, the country has also been collaborating with Bangladesh’s private sector, civil society, and authorities to improve the industry by helping to raise its social and environmental standards.
The (GIZ) GmbH is a German federal enterprise that has been working in South Asia including Pakistan for a long. It entered Bangladesh after its independence in 1972, implementing projects on behalf of the German Federal Ministry for Economic Cooperation and Development, in cooperation with the government of Bangladesh.
The GIZ assists various industries, including energy saving through energy audits, streaming textile processes, and other industrial processes to increase efficiencies and reduce costs. The GIZ is very dedicated to improving the lot of the workers. Still, the staff is frustrated as their efforts usually go in vain. The efficiency that exporters of these industries, particularly the textile operators achieve is poached by the foreign buyers that ask the exporters to share the decrease in cost with them.
Moreover, foreign buyers insist on green operations that have costs but refuse to share the cost with the suppliers. They want facilities and salaries for workers enhanced without offering some premium on compliance. An NGO once pointed out that if buyers increase their buying price by $1 per garment piece the wages of workers could be doubled in all supplier’s operations.
A former textile buyer with more than three decades of experience, the head of the GIZ Textile Cluster since 2017 has worked on both sides of the table. In his interaction with the media, he said improvement in industrial safety has been tremendous in Bangladesh. And if someone claims that the world’s safest factories are in Bangladesh, I will say yes, it is true. But progress happened mainly where access to international consumer markets was relevant.
With more and more global commitments to achieve sustainability goals, Bangladeshis are facing more and more rules and regulations, whether from the EU or the global level. Internalizing the cost of social and environmental compliance will raise the cost of products. And of course, we must convey this to the customers.
The head of the GIZ Textile cluster said speaking, everyone has the freedom to say ‘no.’ Once a vendor has accepted an order, he should not complain about the price later. They need to learn to say ‘no’ to the buyer over price.
Bangladesh is so strong that you cannot say we do not need Bangladesh. The buyers need Bangladesh. Of course, if one manufacturer is offering, let’s say $10, and the next one says, ‘Come to me, I make it for $9,’ then the buyer will be tempted to go to the latter. But he needs to check whether the latter is compliant, and how the lower price is being offered. Is this factory paying fair wages to the workers? Are they paying overtime? Are they pouring wastewater into the environment?
When you are a publicly known brand and have the attention of civil society and the media, your business practices are subject to constant evaluation. Pressure from the public can have an enormous impact on business.
See what happened with a well-known German brand sponsoring an American celebrity. The brand came under pressure over the celebrity’s politically incorrect statements. The media reported a potential loss of revenue of more than $1 billion. The brand finally ended the business collaboration.
The International Labour Organisation (ILO) established the Rana Plaza Donors Trust Fund in 2014. The majority of the $30 million fund, which reached its target in 2015, was contributed to by international clothing brands, with remarkable contributions from the Bangladesh Prime Minister’s Fund and anonymous donors.
Bangladeshi garment suppliers must say no to lower prices offered for RMG
