Who Pays For Cheap Clothes? 5 questions the low-cost retailers must answer

Wednesday, 05 July 2006 11:04

Something new is sweeping through the high street. Whereas five years ago, style-conscious teenagers would never be seen, like, dead in a bargain clothes shop, today the Saturday afternoon high street is awash with Primark bags and their proud owners boasting the bargains they have found. What everyone wants to know is: do their contents come from sweatshops?

The four companies this report focusses on, Asda, Tesco, Primark and Matalan, are to fashion what McDonalds and Burger King are to food: mass produced, hassle-free, fast, popular, and reliant on exploitation down the supply chain to keep things that way. It asks what impact this trend is having on workers' rights, and challenges these retailers to ensure that workers are not paying for our cheap clothes with their human rights.

Foreword

Imagine that you have worked for years in a physically demanding job that gives you no benefits, very long hours, and a low and steadily declining salary. Imagine that every year, hundreds of your colleagues are killed or seriously injured in accidents caused by poor health and safety conditions. Imagine that you are frustrated and powerless because you are prevented from joining with your fellow workers to demand better conditions. You are imagining the life of millions of garment workers in Bangladesh.

Low-cost retailers like the four British ones covered in this report love to source from Bangladesh. It’s cheap, the workers there are compliant, and the government is desperate to make it worth their while as competition from China casts an ever longer shadow. Tesco, which buys many of its clothing products including its infamous £3 jeans from Bangladesh, says that its “experience here is good.” [1] At the start of 2005 the company set itself the target of increasing its buying to £60m of clothes from Bangladesh. "There are huge opportunities for us to grow in this country and that's why we have expanded our office in Dhaka," said the CEO of Tesco Clothing & International Sourcing. [2]

Asda-Walmart is the biggest single buyer of clothing from Bangladesh, and its Vice-President for Global Purchasing is similarly effusive, saying that, “Bangladesh is very competitive because the labor cost in Bangladesh is only half of what China is, and maybe less than that.” [3]

In recent years, however, labour rights activists who are in close contact with workers on the ground have warned of the consequences as wages and working conditions worsened (the minimum wage has halved in real terms over the last decade). Workers’ frustration grew and grew, until in May this year it boiled over in wave of demonstrations and vandalism.

In one factory that workers say supplied Tesco, for example, a sudden drop in the rate workers were paid for each piece of clothing produced caused them to walk out, and in the ensuing clashes with police one worker was killed and hundreds more injured. [4] The workers’ 10-point demands included payment of a living wage, the right to organise, and the right to maternity pay.

Last year, hundreds of workers in a Bangladeshi factory apparently producing for Primark were fired in a conflict with management that was sparked when a supervisor physically assaulted three workers for making mistakes in their work. [5] And in 2004, twenty-two union members at a factory supplying Asda who demanded their legal overtime pay were allegedly beaten, fired, and imprisoned on false charges. Workers claimed that the factory required 19-hour shifts, paid no overtime, and denied maternity leave and benefits. [6]

What lies behind this tense and volatile situation? Why have working conditions got so bad that workers are prepared to risk job, life and limb? While poor government policy and the attitude of factory owners is an important part of the story, the price-cutting tactics of low-cost clothing retailers sourcing from Bangladesh have been a driving force. This report sets out to show how the sourcing techniques used by companies like Asda, Tesco, Primark and Matalan can lead to the people working for their suppliers getting a raw deal. It is dedicated to the Bangladeshi workers who, at the time of going to press, were still fighting for their rights.