Why don’t retailers know they are being lied to? Our view: BBC Panorama ‘Dying for a bargain’

girl at factory sewing machine

It’s a mutually beneficial relationship: retailers obtain cheap, rapidly made garments, and Bangladesh benefits from booming clothing production and mass employment. Bangladesh is the world’s second biggest exporter of clothes, and it’s a key industry there. One interviewee in the Panorama programme describes the clothing industry as a ‘lifeline’, giving millions of people a way to support their families. However, there’s a dark side to this relationship, as events such as the Dhaka factory fire keenly shone a light on earlier this year. Many Bangladeshi employees work long past their official working hours, and fire regulations are scant. ‘Dying for a Bargain’ reporter Richard Bilton went undercover to work out why such flagrant flouting of rules and regulations is able to happen, and to ask: whose fault is this, and how can it be prevented? We discuss how retailers can protect their supply chain from mal-practising manufacturers and suppliers.

The documentary exposed brutal practices such as locking workers into factories in order to prevent them stealing, regardless of the fire risk this presented. Fire is the greatest danger in garment factories, with 50 reported fires in the past ten months. At Tazreen Fashion 100 people died in a fire, the factory had no fire safety certificate, and it was later found that supervisors had locked gates inside the building with workers still inside.

Some factory owners exploit their workers’ desperation for money in order to increase output, allowing them to work regular 19-hour days, and keeping the projected and actual working hours logged in separate ledgers – one to assure buyers of their rigid codes of conduct, and the other to record workers’ actual hours so they can pay them accordingly. This practice is widespread. Greed is the main driver behind the duplicity – the implicated factory owners seeking to maximise production, get orders out faster, and increase their profits, taking advantage of the workers’ poverty and desperation. Bilton catches one factory manager lying on camera about the hours his employees work; there are no scruples where profits are concerned.

So why don’t retailers know they are being lied to? And who is responsible?

It can be in the interests of mal-practising factory owners to deceive Western buyers with regards to working hours and conditions; most retailers’ codes of conducts are very strict and their auditors keen to ensure these are being adhered to. One clean, modern looking factory, Sharmin, professed to sticking to eight working hours and two hours overtime maximum, and yet, as the BBC panorama exposed, at 10pm business was still going. But how can retailers be expected to know this, and what does this mean for the retailers who unwittingly source their clothes from duplicitous manufacturers?

Most retailers acknowledge their culpability when unacceptable working conditions come to light. Fast fashion mega-chain Primark was unaware of the working conditions in the factories from which some of its clothes were sourced, but it paid compensation to the families of the Dhaka factory collapse anyway. Retailers aren’t typically guilty of inhumanity, but sometimes ignorance; their supply chains just aren’t transparent enough to cope with the murky Bangladeshi garment manufacturing industry that breeds malpractice and enables factories to easily sidestep audit requirements.

However, the media response to tragedies like the Dhaka factory collapse have made it clear that ignorance is no excuse; even if a retailer doesn’t have the necessary visibility of its supply chain, it is still seen to be profiting from the exploitation of desperately overworked employees in dangerous working conditions. Acknowledging that many retailers don’t know where their items are made, Bilton exposes the difficulties the retailers face in vetting the factories that make their clothes. Acting as an undercover buyer, he does a brief unofficial audit, questioning working hours and fire hazards. He is lied to at every turn by the factory owner, who shows him the doctored working hours ledger and assures him the fire exits are both open at all times. Bilton had witnessed workers being locked into the factory for over an hour, just the night before. If Bilton is lied to, presumably so are real buyers seeking to ensure that their manufacturers are abiding to a code of conduct.

Factory owners, the Bangladesh government, and the retailers who profit from buying their products are all responsible. The responsibility also lies with consumers, and yet there’s no real way to know if the clothes we buy have been sourced ethically, unless explicitly stated on the label. Transparency is key, and in the absence of transparency, consumers either choose ignorance, or they stop buying from retailers previously associated with manufacturer malpractice.

How can retailers protect their supply chains against ethical malpractice?

Retailers’ responsibilities include vetting their suppliers, factories and manufacturers thoroughly, and maintaining complete transparency in their supply chains. The most efficient way to do this is to use supply chain management software, which can help flag untrustworthy suppliers and allow retailers to store and maintain audit records. An easy-to-access dashboard makes it easy to see a rank of their suppliers and factories according to audit performance and reliability.

ediTRACK’s Lighthouse software contains an ‘Ethical Trading’ module which enables retailers to swiftly review their supplier factories, select ethically compliant manufacturers, and assists in providing ethical viability and transparency within their supply chains.

It’s all too easy for factory owners to write off overtime as voluntary, and deny malpractice in terms of fire safety; there are little to no industry checks, and auditors are often misled, or as the documentary showed, outright lied to. In an industry where one million people are willingly working overtime to feed their families, there’s little to no incentive to clamp down on long working hours. The onus is on western retailers to find out how their items are being produced. They must implement a process that facilitates thorough transparent audits, stores audit details and ranks suppliers in line with their ethical compliance.

We fully appreciate that a system alone cannot stamp out unethical practices or stop those who are determined to lie. However it makes perfect business sense to have an intelligent, collaborative system in place that highlights risk and provides transparency and automation; improving the timeliness of supplier and factory audits along with corrective action plans. Having such a system in place frees up the valuable time of Ethical Managers within retail businesses so that they can spend more time and focus on ways to check and improve working practices in order to protect all the people involved in their supply chain, right from source to shelf. The question that should be asked today is, can a retailer afford to NOT have visibility?

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About ediTRACK

Supply chain software company delivering web-based tracking solutions to help retailers and insurers manage suppliers and processes from; Sourcing, Sample Management, Ethical Trading, Product Development, Order & Shipment Management and Delivery.

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