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ILO director on sourcing in Bangladesh: “Results speak for themselves”

By Simone Preuss

25 Jan 2023

Business |Interview

Tuomo Poutiainen at the ILO office in Dhaka, Bangladesh. Image: Sumit Suryawanshi for FashionUnited

Bangladesh has come a long way as a ready-made garment manufacturing country in recent years and is well on its way to displacing China as the world's largest exporter. Given the Rana Plaza building collapse in 2013, which marked the low point of the country's garment industry, how did the country rise to its current top position in such a short time? And what about the safety of the factories now? FashionUnited spoke to Tuomo Poutiainen, director of the International Labour Organization (ILO) in Dhaka, Bangladesh.

Could you explain a little bit how you got into the work you are in - with the ILO and before?

I have been working for the ILO for over 20 years, in different countries. I decided early on to focus on issues around workers rights, their safety and health, and working conditions. I have been in Bangladesh for about eight years, not consecutively but over two tenures. After Rana Plaza, I came to Bangladesh to set up our garment worker improvement initiatives.  Four and a half years ago, I came as the director for the office here, which does not only deal with the garment sector but also other sectors and issues like unemployment, labour migration, child labour and others.  

I have always been interested in human development and how we can provide the most balanced opportunities for everyone, particularly for the young people. I think we all have a responsibility and that is what the ILO stands for and the ILO is part of the UN systems.  

Bangladesh is a relatively young and fast growing country and there is much discussion going on about skills development and how to provide equal opportunities, especially for girls. From the ILO and UN perspective, we say that you can’t really reach any of those nice SDGs if women are not brought into the labour markets. However, two million people are entering the labour market every year and Bangladesh is a relatively small country and relying to a certain degree on the informal sector, so it is a challenge to create opportunities as fast.  

Are changes being made, in a sustainable way?

I think yes and no. There is dedicated government attention on this and even the prime minister has made an appeal for gender parity by 2041 but how to turn this into reality when organisations are still lacking in investments. One needs to continue to push for these opportunities and from an ILO/UN perspective, there are key focus areas: one is investing in primary and secondary education, and the other is gendering of technical vocations, that is training girls and women for technical jobs despite stigmas that still exist, at school level and at employer level but there is quite a lot of resistance to girls entering a certain training and certain occupations.    Another key focus area is entrepreneurship. Most of the jobs here are created by small businesses, cottage industries, SMES, probably 60 to 70 percent. There, we also need a stronger involvement of women and more women-led enterprises, especially in newer industries.  

The garment industry and others like pharma, plastics, bicycles manufacturing, IT all are important sectors because they provide jobs at all levels, also opportunities and high-level jobs and that’s why it is important to create those pathways for women. And the other sector is of course services, that can provide good jobs. 

ILO office in Dhaka, Bangladesh. Image: Sumit Suryawanshi for FashionUnited

Your work has brought you to diverse countries such as the Philippines, Cambodia, Thailand and Bangladesh - what are some of the country-specific challenges and strengths that you have observed? 

All countries are very different of course. In Bangladesh and Cambodia, there is much garment-sector-led growth, driven more or less exclusively by one sector, which comes with a wealth of challenges and opportunities as well. Job creation is important. When you have shocks like Covid times, that provides a huge challenge and issues like safety nets come to the fore - who will provide for the workers when the job is gone?   Bangladesh and the garment industry fared quite well during Covid. It is one of the countries that vaccinated in a relatively speedy manner, took Covid seriously and established policies and practices very quickly, which reduced the risk. There were periods with factories opening and closing but when the opportunity came to open again, the garment industry took it. However, the lack of a safety net was exposed, and the government is quite serious about plans and policies. Of course, there is a system of social assistance but there is also a need for contributory programs from the employers’ side. That is the kind of back-up needed in the future when problems come and this is something new, where the ILO is working with governments.  

What about the responsibility of brands and retailers? 

When industrial accidents happen, that usually puts a high focus on the safety and working condition record. I would say that there have been real improvements and real learnings by the industry and a real assistance and focus by the buying organisations and brands to partner with the industry to make sure that these changes are real and that they are upheld. They need to make sure that the suppliers they source from uphold local laws, local good practices and maintain those safe working conditions. They are understood now but maybe ten years ago, they were not understood fully and certainly not applied. Though there are low fliers and high fliers and everything in between, generally the industry in Bangladesh now has a much better safety record. 

What would you say is the percentage of complying factories now? 

It is hard to put it in a percentage in a diverse industry but probably 70 percent of RMG factories are now in that range of what is expected and the rest is somewhere there, the export-focused industries at least. Many factories have a general sense of doing good things, for example providing free water to the community, fixing the local mosque, paying for childcare, orphanages, schools. They do good in their neighbourhoods without making a big deal of it. They have understood that providing good food and health care is part of doing good business. Worker retention improves that way and when good relationships between workers and management are kept, things go better. They are your assets and it is not easy to find skilled workers. A  mutual, respectful relationship and having a good working relationship works. Here it is also important that the industry spreads out and is not only concentrated in and around Dhaka so that the whole country can benefit from this local involvement.  

  The other thing is, there is a generational shift and a geographic shift where production is taking place. While ten years ago, factories were in residential areas and often in mixed facilities - a garment factory plus something else. All that is almost not happening any more because that shock that happened from Rana Plaza, shifted that practice quite radically. Factories have moved out and into purpose-built to single-purpose factories in economic areas. That in itself reduces the risks to the public and also in a certain sense to the workers because the facility can be inspected as a garment factory, and safety compliance measures done to the whole of the facility. So just changing the facility where the manufacturing is done has improved transparency and safety.

Could Bangladesh be a role model for other garment producing countries?

Yes, in a sense that the results speak for themselves. And looking at how these results were achieved, it is really important to look at the huge push by the international brands through quite a lot of investment. There were two million-dollar organisations, the Accord and the Alliance, that were here for this purpose and almost forcing these changes, which have now been internalised by the industry. The task is to continue to maintain those changes and that vigilance and also understand the value of that investment. So that was really the trigger for change. Initially, it was “so, this happened, what can we do?” but soon it became very apparent, “this is what you can do”, “this is what you must do if you want to continue to be in this business”. And yes, we will help as an international community. Of course, organisations will support governments but businesses have to support businesses and this is where the international buyers came in.  

Would you say the transition was successful?

It is fair to say that at that point of time, the transition from Accord and Alliance to the RMG Sustainability Council was met with some scepticism and maybe controversy but the fundamental idea of shifting the responsibility to a new organisation where the industry participates as a whole, that was a good way to maintain and continue because then you have a much bigger ownership. It is a much better way to sustain it and having a board with international trade unions and international industry and brands having that oversight.  This way, credibility can be maintained and we now have industrial safety as an outcome of ten years of relentless work. And this way, that model can work for other countries as well - their situation may be different, also their motivation, resistance and positive reception - but they can look at how this shift happened.

Bangladesh is reaping the benefits now as the world, the trading partners and markets, expect more of compliance - social and environmental compliance, governance, and due diligence in general. And there is more and more legislation that obligates the buying organisations in their countries of origin to comply and to show that they are buying from markets that are equipped with the right kind of conditions. So Bangladesh is upfront with these methods and now they need to replicate that for other sectors because the country wants to sell other products than RMGs like spices, footwear, bicycles. All of those supply chains need to be looked at.    

What about the consumers? How much power do they have, how much pressure can they put?

For years, the consumer angle has been raised - how much do consumers know, how much do they want to know? How does that impact their buying behaviour? I don’t have an answer to that but I think the clearer the distributor or the brand can be in terms of responsibility and how their factories supply, consumers will take that into account when making their buying decisions. 

Market regulations, the European Union and others will help shape minimum standards so that consumers won’t even have the choice any more to buy an inferior product because it’s regulated and in a particular market, only certain kinds of products are allowed. And over the years, this has already been put in place for other products like toys, electronics and food. This is the next frontier about what needs to be done and it is a question about reaching a consensus between governments, consumer groups and the business community. 

Also read:

Bangladesh
ILO
SOURCING
Tuomo Poutiainen