Social Sustainability and the Bangladesh Factory Collapse

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At Strategic Sustainability Consulting, we are frequently hired to give corporate training on sustainability topics, including stakeholder engagement, social sustainability, and supply chain management. One of our most popular workshops involves a stakeholder simulation based on a hypothetical factory fire in Bangladesh. The simulation involves more than twenty different stakeholders, ranging from the factory owners, workers, families, retailers, competitors, consumers, government officials, labor unions, and non-profit advocacy groups. 

Over the course of two hours, the group confronts a real-life situation involving competing interests, varying levels of responsibility and accountability, and an urgent need to "do something.”  The goal of the simulation is that participants will walk away with a practical knowledge of stakeholder engagement techniques and best practices, and gain a greater sense of how stakeholder partnerships can solve complex problems.

As we've been running this simulation for months, when we saw the horrible news about the April 2013 collapse of the Rana Plaza factory building that left more than 1,100 dead, it hit close to home. As a result, we've been closely following the story as it has developed, with an eye to what stakeholders will do next. Here's a quick rundown of what you need to know:

Which retailers source their goods from the factories where the building collapse occurred? This is a good overview of the building collapse and the problems that caused it, including the fact that social auditing firms had recently approved the factory where the disaster took place.

The High Human Price of Cheap T-Shirts, written from a European perspective, this article provides gripping (and graphic) details about the building collapse and explores how some European retailers are reacting. Labor rights NGO's are skeptical -- do retailer claims to "a robust code of supplier conduct" mean anything in practice?

Retailers Split on Bangladesh Factory Collapse provides an insightful summary of how retailers reacted to the tragedy. Some moved to distance themselves immediately, while others acknowledged their involvement and moved to make restitution. This article is particularly interesting because it shows the retailers' immediate reactions -- contrast that with the later activities (below).

Some Retailers Rethink Their Role in Bangladesh explores why Disney decided to end its branded merchandise manufacturing in Bangladesh (largely in response to an earlier factory fire). The article discusses some of the hard choices facing retailers as they struggle to deal with complex supply chain issues.

Preventing Another Bangladesh Tragedy: Three Ways to Transform Supply Chain Ethics moves past recriminations and focuses on three leverage points that will help solve the underlying challenges that led to the factory collapse: requiring the public disclosure of provenance data, focusing on labor rights, and abandoning wishful thinking on labels.

A Business Model for Bangladesh takes the opposite viewpoint, arguing that a 3.3% increase in producer prices would bring Bangladesh factories up to acceptable standards of health and safety, and that a "safe-workplace" label is a meaningful solution to the problem.

Bangladesh Tragedy Proves Global Garment Trade Too Big to Supervise gives an insider’s look as to why it's so hard for retailers to ensure that they are only working with ethical suppliers -- and why suppliers are restricted in their ability to demand fair compensation. This is an essential read for anyone trying to understand the complexity of the problem!

The Other Women's Movement: Factory Workers in the Developing World looks at the special role of women in the garment industry and initiatives currently underway to leverage women to improve social standards (including health and safety) across industries.

In Bangladesh factory aftermath, US and European firms take different paths, compares the international retailer reactions to the tragedy, including agreements (or rejections) to the Accord on Fire and Building Safety in Bangladesh: a five-year, legally-binding commitment from retailers, whose suppliers will be subject to independent inspections and public reports. Why has H&M signed on, while Walmart won’t? Read about it here.

As Firms Line Up on Factories, Wal-Mart Plans Solo Effort outlines Walmart's response to tighten safety standards, in lieu of joining the Accord on Fire and Building Safety in Bangladesh. It also includes a more detailed look at why Gap has become the most outspoken critic of the Accord. 

As the news on the aftermath of the tragedy (including the Accord) will likely continue to change, you can trust us to stay on top of it. So if you have supply chain issues in Bangladesh, would like more information about social sustainability issues in the supply chain, or want to hire us to run the stakeholder engagement simulation at your company, just contact us and we'll be happy to help!