The Rana Plaza factory collapse in Bangladesh, which killed 1,129 workers in April, intensified international scrutiny on factory monitoring, and pressured the world’s biggest retailers to sign onto agreements to tighten inspection standards and upgrade safety measures.
While many groups consider the accords a significant advance, some long-time auditors and labor groups voice skepticism that inspection systems alone can ensure a safe workplace. After all, they say, the number of audits at Bangladesh’s factories has steadily increased as the country has become one of the world’s largest garment exporters, and still 1,800 workers there have died in workplace disasters in the past 10 years.
“We’ve been auditing factories in Bangladesh for 20 years, and I wonder, ‘Why aren’t these things changing? Why aren’t things getting better?’” said Rachelle Jackson, the director of sustainability and innovation at Arche Advisors, a monitoring group based in California.
Even with US and European companies appointing executives this summer to put in place a stricter regimen of inspections and safeguards under the new agreements, these efforts are limited to Bangladesh. Other leading garment-producing nations, like China, Honduras, Indonesia, Pakistan and Vietnam, are not getting such stepped-up attention or expanded inspections. Thousands of factories in those countries will no doubt continue to be reviewed through the perfunctory “check the box” audits.
Factory monitoring companies have established a booming business in the two decades since Gap, Nike, Walmart and others were tarnished by disclosures that their overseas factories employed underage workers and engaged in other abusive workplace practices.
Each year, these monitoring companies assess more than 50,000 factories worldwide that employ millions of workers. Walmart alone commissioned more than 11,500 inspections last year. Spurred by heightened demand for monitoring, the share prices of three of the biggest publicly traded monitoring companies, SGS, Intertek and Bureau Veritas, have all increased about 50 percent from two years ago.
The inspections carry enormous weight with factory owners, who stand to win or lose millions of dollars in orders depending on their ratings. With stakes so high, factory managers have been known to try to trick or cheat the auditors. Bribery offers are not unheard of. Often notified beforehand about an inspector’s visit, factory managers will unlock fire exit doors, unblock cluttered stairwells or tell underage laborers not to show up at work that week.
Unauthorized subcontracting, or farming work out, to an unapproved factory (as was the case for the Quaker Pet Group order in China), is “very, very common,” according to Gary Peck, founder and managing director of the S Group, a design and sourcing company based in Portland, Oregon.
Though almost all retailers prohibit the practice in their contracts, suppliers still do it to save money, speed production and meet high-volume orders.