COVID-19 SPECIAL

Pandemic poses grave threat to millions of Asian garment workers

PHOTO: REUTERS

As fashion retailers shutter their storefronts across Europe and North America due to the coronavirus pandemic, some of the world's most vulnerable workers are feeling the pain - and getting shafted.

In Bangladesh, garment factories have already furloughed more than one million workers thanks to at least US$3 billion (S$4.3 billion) in cancelled and postponed orders.

Elsewhere in South-east Asia, a key hub for apparel production, the toll is multiplying as quickly as the virus is spreading.

If left unaddressed, the crisis could endanger the lives and livelihoods of millions more of the region's workers.

For decades, the apparel industry has had something of a devil's bargain in South-east Asia. Western companies have accepted the reputational risk that comes with capitalising on the region's low-wage labour, while local governments have tolerated poor factory conditions in return for jobs and growth.

In some respects, the benefits have been undeniable: Last year, Bangladesh's apparel industry generated US$35 billion in revenue - accounting for 80 per cent of all export earnings - and employed 4.4 million people.

In 2013, however, the human costs of this bargain became plain when Rana Plaza, a complex of garment factories near Dhaka, collapsed and killed at least 1,132 workers. The retailers and brands that had outsourced their production to the region looked for ways to prevent a recurrence while ensuring that outsourcing - and Bangladesh's most important export - could be sustained.

The next year, they hit on a solution: independent monitoring and inspection organisations, empowered for five-year terms, with buy-in from government and local businesses.

Over the next few years, these watchdogs inspected thousands of factories, shut down those that were in violation of safety standards, and pushed often expensive improvements - everything from installing fire alarms to improving building foundations - on others. Even under ideal conditions, however, this solution was only provisional.

Earlier last month, the United States Senate Foreign Relations Committee released a report documenting backsliding on labour rights in Bangladesh and elsewhere. But the disruption caused by the coronavirus pandemic could prove to be a tipping point.

So far, it's come in two waves.

 
 

The first started in February.

China supplies the overwhelming majority of raw materials for South-east Asia's garment makers (60 per cent in the case of Vietnam). As Chinese textile producers shuttered, manufacturers in neighbouring countries seized up.

In Cambodia, the government recently predicted that 200 garment factories, employing 160,000 workers, could soon face raw material shortages. Already, 10,000 Cambodian workers have been laid off, and some factory owners are reportedly taking advantage of the crisis to push out unionised employees. Safety standards will likely follow them out the factory doors.

The second wave of trouble is just starting. In recent weeks, companies - including Irish retailer Primark, Britain's Marks & Spencer Group and Minneapolis-based Target Corp - have cancelled, postponed or declared force majeure on orders for which their South-east Asian partners have already purchased raw materials, and in some cases even completed work.

The situation is so serious that Cambodia and India have made direct appeals to global brands to avoid cancellations and work out payment plans. Few are responding. According to a survey of Bangladesh's garment factories conducted last month, nearly half had lost "a big share" of their orders. Nearly all buyers, most of whom are located in Europe, have refused to contribute to wages for furloughed workers.

In the short term, such steps might help apparel companies weather a downturn. But the last decade should've taught them that - at least in the eyes of their customers - they have a deeper responsibility to the workers who manufacture their merchandise.

A 2018 survey of consumers in seven countries found that nearly three-quarters of them believed that clothing companies should be held responsible for what happens in their factories and should transparently disclose working conditions. The danger is that the coronavirus outbreak gives factory owners and governments an excuse to roll back expensive safety programmes and ignore hard-earned progress on wages and working conditions.

There's no easy fix when pain is being shared across an industry - not to mention across the world.

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But all parties would benefit if retailers and brands committed to a shared responsibility for paying garment workers for completed work, and contributed to a reasonable severance during the inevitable virus-driven slump.

On Monday, Swedish fast-fashion giant H&M announced it would take delivery of goods (including those in production), and pay for them. Other brands should follow suit.

Doing so will help long-time manufacturing partners who've improved safety standards and workers' rights to stay in business through the pandemic.

Meanwhile, rich-country governments keen to support labour rights in South-east Asia should maintain preferential trading policies with the goal of supporting the region's workers through a devastating downturn.

That should help some of the world's most vulnerable get through the next few months, while ensuring that years of progress made by the global apparel industry isn't left in tatters.

  • Adam Minter is a Bloomberg Opinion columnist and the author of Junkyard Planet: Travels In The Billion-Dollar Trash Trade.
 
A version of this article appeared in the print edition of The Straits Times on April 02, 2020, with the headline 'Pandemic poses grave threat to millions of Asian garment workers'. Subscribe