So Your Supply Chain is Banning Bangladesh….and Going to Cambodia?: "The Ugliest Race to the Bottom"

In our ongoing discussion of labor and human rights violations in the supply chain, we’ve discussed in prior posts the problems that occurred in Bangladesh resulting in over 700 dead.  Companies like Nike and Disney have publicly stated that they are not going to Bangladesh for apparel sourcing in the future.  But that leaves these companies with what other options?

As noted in a Wall Street Journal article today, low cost countries all have the same problems that factories in Bangladesh do.  Sanjiv Pandita, executive director of the Asia Monitor, called it “the ugliest race to the bottom, because the financial crisis in America and Europe means that people are scared of buying expensive things”.  But as any buying agent who has visited these countries knows, things aren’t much better when you visit factories in other parts of Asia, including Myanmar, Pakistan, China, Indonesia, or India.  The same unsafe working conditions prevail, and you are just as likely to encounter the problems with capacity and subcontracting that we’ve noted in other blogs.

According to the WSJ article, conditions in these other countries are just as horrific, although come in different varieties.  For instance, Puma’s factory in Phnom Penh, Cambodia, worked with the Fair Labor Association to discover a “strong possibility” that fainting workers in the factories was caused by chemical exposure and cited excessive overtime and insufficient drinking water as contributing factors.  In Thailand, workers at a factory producing Nike apparel were forced by military personnel allegedly hired by the manufacturer to sign a petition allowing them to be paid less than the minimum wage of $4 a day.  That’s considered high pay when you look at Myanmar, where people are paid as little as 40 cents to $1.10, but that’s only if they have perfect attendence, meaning coming in seven days a week.

This is nothing short of slave labor, and apparel companies are going to have to come together as a group and drive community-based changes.  They may have to increase wages by as much as 10 to 15%, and pass on the costs to the ever complaining Western consumer.  I think most of us can afford to pay $1 more for that “Mickey Mouse” or “Just Do It” t-shirt……