On July 3, a boiler explosion just outside Dhaka, Bangladesh put supply chains back in the news: the factory made clothing for seven European retailers. Like other clothing and footwear retailers before them—brands as recognizable as Nike, Walmart, and H&M—those retailers will answer in the court of public opinion for the preventable deaths and injuries of the workers who make their products.
Any time deadly events like the Multifabs explosion make the news, retailers may find their brands drawn into damaging controversies over their responsibility for the human toll of their manufacturing processes.
The Push for Transparency
In April 2017, the nonprofit human rights organization Human Rights Watch (HRW) released a 40-page report, “Follow the Thread: The Need for Supply Chain Transparency in the Garment and Footwear Industry.” The report was intended to bolster HRW’s push for garment and footwear retailers to sign on to the Apparel and Footwear Supply Chain Transparency Pledge. Companies that agree to the pledge promise to identify the factories where their products are made, forcing them to take responsibility for abusive labor practices and poor safety records in those facilities. HRW invited 72 apparel and footwear retailers to take its pledge; initially, only 17 agreed. But incidents like the Multifabs explosion provide ammunition for their efforts.
The idea behind transparency is twofold: It enables the people buying retail goods to decide on the basis of information about where a manufacturer’s or retailer’s products are made whether to support that company. The second purpose of transparency is to enable workers to know who they are making goods for. That way, if the conditions in the workplace are abusive or dangerous, or if the product is not meeting the customer’s standards, workers have a better idea where they can take their complaints in order to get positive action.
Trust: It’s Not a Niche Business Anymore
There have always been small corners of the market where the details of a product’s origins were considered valuable, often involving religious observances or social justice concerns. For example, some consumers want to purchase kosher or organic food; others want to purchase furniture made from sustainably-grown wood or reclaimed building products. Outside those market niches, many global corporations lacked supply chain transparency even within their own organizations—even they couldn’t be sure where all of the components of their products were sourced. But that was creating problems for manufacturers with product delivery and quality, so manufacturers are increasingly demanding transparency within their own supply chains.
Eventually, that information will make its way to consumers. Increasing numbers of consumers are concerning themselves with global business practices, including environmental, safety, and fair labor issues, and companies that take steps to enhance the transparency and responsible environment, health, and safety (EHS) performance of their suppliers will have a competitive edge in consumer trust and corporate reputation.