Ruminations: The Big Fish Devouring the Little Fish

"It would come as no surprise that Canadian brands also have not increased prices for the garments they buy."
"Workers employed in these factories suffer, as factory owners are unable to pay living wages."
Doug Olthuis, head, global affairs, United Steelworkers union, Canada (USW)

"These are some of the most vulnerable workers in Bangladesh and in countries where there’s garment exports. Young workers, women workers, [are] often internal migrants."
"So they’re coming from the countryside to the city."
Mark Anner, professor of labour and employment relations, Penn State University

"They were only saying one thing: that they’re firing people because of coronavirus."
"They said because of coronavirus, there were no new orders coming and the factory owner was struggling to pay workers."
"We are living under a lot of hardship right now."
Dudali, 20, Bangladeshi garment worker

Bangladeshi female workers work at a garments factory in Gazipur outskirts of Dhaka on February 17, 2018. Mehedi Hasan | NurPhoto | Getty Images

Allegations that Canadian Tire Corp. Ltd. had refused to pay a living wage to thousands of workers in factories in Bangladesh employed to produce clothing sold by the retailer under its labels Denver Hayes, Dakota, WindRiver and Helly Hansen, spurred the USW to file a complaint with the Canadian government.

Canadian Tire, while denying those allegations, claimed that it follows local law and regularly tracks what its suppliers pay their workers. Ritzia Inc. and Lululemon Athletircs Inc., two of Canada's leading clothing retailers, are held to have committed the same kind of exploitation of Bangladeshi workers in the clothing industry.

After China, the world's number one supplier of clothing for brands known the world over, Bangladesh's clothing industry production is the second largest exporter in the world. A new study based on interviews with over a thousand Bangladeshi clothing manufacturers recounts that some 70 percent of the brands sourcing from these factories paid their suppliers roughly the same production costs as they did prior to the onset of the pandemic.

It is well known that the pandemic has caused scarcities and higher prices of all manner of commodities, raising the production costs of all goods, including production energy costs. By paying suppliers in this manner without taking into account their higher production costs, brands have committed nothing in aid to their offshore suppliers to offset surging price increases of raw materials.

These new allegations contained in the report produced by a group of British researchers, that Bangladeshi garment workers are being exploited by international clothing brands. While no Canadian band names appeared in the report, it appears to have acted as a heads-up of a presumably universal failing.

According to the study's lead author, Muhammad Azizul, when suppliers are underpaid, workers are the ones impacted. Of the factories that participated in the study following the pandemic, the number of workers employed by them was about ten percent lower than pre-COVID levels in 2020. This, despite an increase in clothing exports from Bangladesh.

"This means that the existing workers have had to work a lot. This could be a sign of exploitation", said Azizul, a professor at the University of Aberdeen Business School. In the United Kingdom, activists are insisting the government create a fashion watchdog to ensure that any brand with stores in the country be monitored to ensure it has no involvement in such practices.

"This kind of mechanism could be useful in Canada", suggested Professor Azizul, since some of the large international brands mentioned in the report have a presence in Canada. H & M Hennes & Mauritz A.B., Inditer SA's Zara, Walmart Inc. and Gap Inc, among the large international retailers named in the report.

Professor Azizul and his colleagues studied how shutting down of clothing shops in the West during the 2020 pandemic impacted manufacturers and workers in Bangladesh -- behind China as a clothing exporter, although it is some 65 times smaller than the Asian behemoth. Some four million workers are employed in Bangladesh, mostly women, points out the report.

Factories, among the 1,000 suppliers to the1,138 brands named in the report, claimed that 25 percent cancelled their orders, 19 percent paid less than originally agreed, ten percent refused to pay for the goods that were produced, and 24 percent delayed payments by over three months during the initial months of the pandemic in 2020.

Of the 78 brands that bought clothing from at least four factories, 86 percent cancelled their orders, 85 percent reduced their prices compared with the original contract, 50 percent refused to pay, and 85 percent of the brands delayed their payments by over three months; and these were the failings of the largest brands.

In the final analysis, the Bangladesh clothing industry faced deferrals and cancellations to the value of about US$3.7 billion in export orders by June 2020. Most of the orders were destined for Europe and North America. This led to thousands of workers losing employment during the pandemic.