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Cheap clothes from Bangladesh Case Study produced by ELS

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Cheap clothes from Bangladesh What lies behind super-cheap prices of clothes in big retailers like TESCO, LIDL or H&M? They are produced under very bad working conditions in garment factories of South East Asia. One of the worst situations is in Bangladesh, were the workers (mostly women) are forced to work up to 100 hrs a week. Their wages do not even cover their living needs. In 2006 a massive demonstration took place demanding a lift of minimum monthly wage from 930 Tk (10 Eu) to 3000 Tk. Consequently it was lifted to 1662 Tk (18 Eu) but the living monthly expenses of that time already amounted to 45 Eu and they are constantly growing.1 The retailers use this situation. They back up the system where people don't get enough to feed themselves. They simply dictate the price and other condition to owners of the Bangladesh factories. Even though this approach is unthinkable in Europe, in the intense competitive atmosphere of Bangladesh garment industry there is always someone who will accept the firm demands. That is why the retailers prefer sourcing from Bangladesh and do not care about impacts of their buying practices on workers. Factory managers can force sewers to work more then 10 hrs a day 7 days a week, to give the retailers their garments in a very short term. This is called fast fashion and allows a customer to get the newest clothes following the latest fashion. With a huge profit on side of retailers, these trends and exceedingly low prices are paid by the workers. Although their wages are incredibly low, they would not find other job outside the factory. But the short term contracts between retailers and subsidiary factories do not even give them the certainty that they will have the job for a longer time.2 There are 2 mil garment workers in Bangladesh and most of them suffer under these conditions. Rejection of strict instructions leads to immediate sack and there is no chance of establishing a union. Thus the sewers work from 80 to 100 hrs a week without a day break. (International Labour Organisation's conventions allows only 60 hrs consisting of 48 plus 12 overtime) Often the wages are delayed and there were cases were neither a minimum wage was paid.3 The workplaces do not meet basic safety standards. This leads to tragic consequences such as a recent fire in Garib, Gazipur, a subsidiary for foreign retailers including H&M, where 21 people died.4 Suhada1, 25 years old “For the last year, I worked as an operator in a factory. I was supposed to receive 1,800 Taka per month, but I only got between 1,400 and 1,600, and, despite repeated promises, my wage remained unchanged for the whole year. They did not pay my overtime salary properly. They punished us by taking off two days wages if we were absent for even just one day. The workers never receive a bonus. I usually work from 7 o’clock in the morning until 7 o’clock at night but also occasionally to 10 o’clock. We also work at night. I recently worked six nights in a row with a short break from 3.30 until 8 pm. My stomach and eyes were sore from overworking. I was exhausted. We were severely punished for every mistake. I was once absent for a day because of stomach-ache and, the following day, I was called out and had to stand for an hour as punishment. In front of all the other workers. One day, when I felt just as bad again, I perhaps spent a little longer than usual in the toilet, and was immediately punished. They deducted a whole day’s pay. The foreman frequently attempted to hit me. Two months ago, I worked for two days without eating. Naturally, I was tired, hungry and weak; I couldn’t concentrate and, all at once, I made a mistake. The foreman made a big fuss about it and sacked me on the spot. I burst into tears and begged him not to sack me, but it was no use. I had worked there for a whole year. They just paid me my wage, without any of the bonuses I was due. So, for the last two months, I’ve been unemployed.”5 The retailers try to improve their image by spending money on advertising their “social responsibility”. However 1 2 3 4 5

projects they promote do not solve the problem. Often they refer to regular audits of the factories. According to garment workers interviewed during evenings outside factories by several NGOs, these visits are announced to the factory managers in advance so they can prepare a cover up and make sure the workers will not complain to auditors.6 Once the auditors are gone, all the acquisitions like canteens or children corners and important safety measures are removed. A fire in Gazipur factory is very characteristic here, since it was “successfully” audited in October 2009 but in February 2010 it burned down because of lack of safety in the electricity. Another retailers' argument is that they are supporting improvements of safety and working conditions in selected factories. However often these “cleaner” factories are awarding contracts to other factories with bad conditions and the vicious circle repeats itself.7 If the retailers won't stop pushing the prices down and won't awarding its subsidiaries longer terms contracts, factory managers will not have chance to change the way of treating their employees. Therefore companies should have obligation to disclose information about their supply chain and to identify risks of human rights abuses therein. This will not only help the garment workers, the real beneficiaries would be also the retailers. In a system with unclear standards no basic level playing field they face risks that their brands will suffer from connection to human rights abuses and yet they have to face more aggressive and less caring competitors. Companies combat bad image of the industry with advertisiment and invesments in social responsibility project that have little real impact. The aforementioned case of fire in Gazipur si where H&M eventually paid compensations to victims is fine example - the company suffered both from bad publicity and direct financial loss despite its good intentions. 

The case study above demonstrates why the Rights for People Rules for Business campaign aims to hold companies legally accountable for their operations in and outside the EU. The campaign calls for the EU and its Member States to change European law in order to:

Ensure that companies operating in the EU are legally accountable for any harm they cause to people and the environment in and outside the EU. Many European companies are multinational corporations. Many others are owned by or do business with foreign companies. Multinational corporations operate through many subsidiaries, subcontractors and suppliers. Currently, a corporation’s headquarters makes profits without having to consider how its companies negatively impact people’s lives and the environment. Examples include profiting from unfair labour conditions, human rights violations and environmental destruction. Ensure that European companies disclose accurate information about their impacts on people and the environment. They should be transparent about what they have done, what they are doing and what they plan to do. Generally, companies are not obliged to report on the social and environmental impacts of their operations and future activities. Since there are not enough reporting rules, the information disclosed is often misleading or incomplete. What are the impacts of a steel mill on neighbouring farmland? How do suppliers of European fashion brands treat their workers? Mandatory disclosure of such information would allow affected and concerned people to hold companies to account. Ensure that non-EU citizens, who are victims of the operations of European companies, have access to justice in the EU.

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Too often people, whose lives have been affected by companies, face many barriers in taking legal action. For example, it is too expensive, it is very difficult to find legal representation and sometimes impossible to obtain all required evidence. In addition, they can face serious intimidation for taking action. 

The Rights for People Rules for Business campaign aims to change European law. The campaign’s legal proposals have been developed by The European Coalition for Corporate Justice.

The European Coalition for Corporate Justice (ECCJ) promotes corporate accountability (CA) by bringing together national platforms of civil society organizations (CSOs) including NGOs, trade unions, consumer advocacy groups and academic institutions from all over Europe. ECCJ represents over 250 CSOs present in 15 European countries such as FIDH and national chapters of Oxfam, Greenpeace, Amnesty International and Friends of the Earth. ECCJ believes CA and also Corporate Social Responsibility (CSR) mechanisms should be based on international legal frameworks and principles, serving as the foundation for and of corporate justice. Overall, ECCJ aims to increase European co-operation among NGOs working on CA. The coalition seeks to raise public awareness about the role of the European Union (EU) in regulating companies both in and outside the EU. Given the global reach of European companies, it is crucial to ensure that they are held legally accountable for the impacts their operations have on people and the environment. This can be achieved though not exclusively through the endorsement and implementation of European and international standards. Legal standards provide the potential to better ensure global social justice, poverty alleviation and environmental conservation. ECCJ is convinced that turning the EU into a leading actor on CA would, in turn, greatly influence discussions on CA and CSR at the global level. ECCJ is convinced that a regulatory approach towards CA is needed. The EU should establish legal measures to hold EU-based companies accountable for the costs and impacts their operations have on people’s human rights and the environment worldwide.

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