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Apparel sector: Ensuring transparency in global supply chain

Sabbir Rahman Khan | May 16, 2019 00:00:00

As the debate around factory safety and the future of Bangladesh Accord on Fire and Building Safety in Bangladesh rages on, it is often forgotten that the readymade garments (RMG) industry in the country has made huge progress in recent years. A full-fledged technological upgrade is ongoing in the sector.

There is a growing trend of global apparel companies adopting supply chain transparency starting with publishing the names, addresses, and other important information about factories manufacturing their branded products. This transparency is a powerful tool for promoting corporate accountability for garment workers' rights in global supply chains. Transparency in this context means letting consumers know who makes their apparel - from who farmed the cotton and who stitched them, right down to who dyed the fabric, and so on (CPD-RMG Study, 2018). The demand for transparency in the textile and garment supply chains is growing as consumers are becoming more socially and environmentally conscious every day.

In fact, after sustainability, transparency is probably the most talked about topic in the fashion world at present and will be so in the years to come. The glimmer of hope is in the fact that global giants have already started practising transparency in global supply chain. For instance: H&M in its new high-end product Arket introduced "transparent tagging," where they mention the supplying factory names as well as some other key details of manufacturing. This move by one of the largest fashion brands in the world is actually a reflection of a trend in the global fashion towards transparency, unlike any time in the past.

Fashion Transparency Index 2018 reviewed and ranked 150 of the biggest global apparel brands and retailers based on how much information they disclose about their suppliers, supply chain policies and practices, and social and environmental impacts. The report found that the number of businesses publishing details about supplier lists, at least for the first tier, has also risen from 32 per cent to 37 per cent. So have the numbers of firms that publish details about processing facilities, rising from 14 to 18 per cent, according to Fashion Revolution Foundation.

The downside is that far too many companies still disclose virtually nothing about their operations and practices. Nearly a third of global apparel businesses were in the 0 to 10 per cent score range when it came to disclosing details. According to the index, there are dozens of brands still not making their supply chains information public including Forever 21, Lacoste, Kohl's, Valentino, Ross Stores, and Amazon. Many brands continue to disclose nothing of their supply chains, yet somehow manage to escape the spotlight.

It would be not be an exaggeration to say that the Bangladeshi apparel industry has made far better and tangible progress in the area of transparency compared to other apparel producing countries. This should be advertised to Western buyers and consumers. This can be used as a branding strategy. The engagement of the country's development partners through the "Sustainability Compact" and the active participation of local and global stakeholders like the International Labour Organisation (ILO) in the process of legal and administrative reforms is a unique example of transparency that Bangladesh has set.

It is also heartening to learn that the Bangladesh Garment Manufacturers & Exporters Association (BGMEA) is collaborating with C&A Foundation and BRAC University to establish a Digital RMG Factory Map where we can see the entire industry and its status. This is an excellent initiative and will help to ensure further transparency in operation as well as in the supply chain of the RMG industry. The project collects comprehensive and accurate data on factories across Bangladesh - the names, locations, numbers of workers, product type, export country, certifications and brand customers - and discloses it in a publicly available online map. Verification is crowd-sourced from the public to ensure that the information remains up-to-date and accurate.

The biggest barrier to transparency, which can significantly change the fashion landscape, is cost. Despite all the efforts that manufacturers are making for positive transformation, costs are eventually pushed towards them. If the apparel retailers and brands do not practise transparent pricing and purchasing, an enabling environment for transparency across the supply chain cannot be created.

In the global supply chain, transparency cannot be a stand-alone responsibility for the manufacturers and suppliers only. For ensuring transparency throughout the entire apparel supply chain, a trusted and predictable relationship between all the stakeholders is the key.

According to the report titled 'Changes in the Governance of Garment Global Production Networks: Lead Firm, Supplier and Institutional Responses to the Rana Plaza Disaster', Bangladeshi suppliers are facing difficulties in meeting the demands of global buyers due to lack of shared responsibility. The study further unveiled that industry insiders observed a stronger concern for worker safety and labour standards on the one hand and continued tensions between buyers' demands for low production costs and delivery deadline on the other.

As such, transparency is the first step towards a different culture for fashion and everybody has to be equally transparent. To ensure this is followed accordingly, high level of engagement and support from brands, retailers and consumers is required in order to make transparency practices a reality. However, plenty of changes are still needed. It is quite evident that a couple of organisations are working hard, but this is not enough. All stakeholders need to step up. Otherwise, there will be no real change.

Therefore, a level-playing field is needed to ensure transparency in the global supply chain for the sake of the RMG sector of the country. Last but not the least, capitalising on the need for formulating unified standards to practise transparency in reality and hold all involved in the supply chain accountable is necessary. Much work needs to be done so that the RMG sector can get the opportunity to open its doors to the outside world. A discussion needs to begin regarding the future direction of the country's apparel sector, which is of huge strategic relevance to garment supply chains worldwide.

Views expressed in this article are those of the author and do not necessarily reflect the official policy or position of any particular party.

Sabbir Rahman Khan is Assistant Secretary (R&D) at DCCI.

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