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A working model

Marks & Spencer’s Ethical Model Factories are making headway in improving workers’ conditions in Bangladesh, but there is much still to be done.

Marks & Spencer is among a group of leading retailers that has faced recent criticism over the treatment and conditions of workers at suppliers’ factories on the Indian subcontinent. The criticism is a blow for M&S, which has been at pains to enforce ethical standards up the supply chain, and it flags up the problem of enforcing and auditing codes of conduct.

In response to this and earlier criticism, M&S, along with other retailers including Primark and New Look, is attempting to develop Ethical Model Factories (EMFs). The aim is to work closely with suppliers to improve productivity, efficiency and quality so the client, the factory owner and the factory staff can share the benefits. M&S started with a trial at three factories in Bangladesh and is now rolling the programme out to its 35 suppliers there. It has also signed up four suppliers in India and is researching how it might function in Sri Lanka.

M&S says it has driven up the average wage in its three trial factories in Bangladesh by 33% to well above the country’s minimum wage. Previously, 98% of these workers were earning less than 3,300 taka (£31) a month and now all take home more than 4,300 taka (£40).

At the Interfab factory on the outskirts of the capital, Dhaka, absenteeism dropped to 1.1% this June from 4.8% the previous year and staff attrition nearly halved to 2.8% from 5.3% in the same period. Efficiency, meanwhile, measured by General Sewing Data (GSD) methodology, a global measure of clothing manufacturers’ efficiency, improved to 48% in June from 33% in January 2009, against an international industry best of 60% to 70%. M&S says a training programme for 130 middle managers, 40 industrial engineers and about 5,000 workers at the three factories was the major contributing factor.

Training sessions

The training involves 19 one-hour sessions, which cover everything from HIV awareness to health and safety and holiday entitlement. An external agency trains an initial group of 30 workers, who then go on to train their peers.

Offering incentives to workers to meet higher productivity targets and retraining sewing operators so they can carry out more than one task have also helped raise productivity. And adapting machinery so that loose threads can automatically be folded into the hem, for example, has also helped by reducing the number of ‘helpers’. These typically earn the lowest of seven official pay grades in Bangladesh. M&S’s ethical factories no longer employ staff on the lowest pay grade.

But it’s not easy. As Muhammed Fateh-Ul Islam, chief operating officer at Interfab, explains: “It’s not only about [changing] machines and technology but also motivation. You need to motivate the middle management and make workers believe they can do the work without a helper.”

Higher salary

Still, removing these low-paid workers means the average wage rises and potentially the extra cash can be redistributed among those remaining. At Interfab, the number of workers enjoying its higher salary of 3,869 taka (£35) has risen from 85 last summer to 1,459 this year, out of a total 2,500 at the factory.

Krishan Hundal, head of general merchandise at M&S, says: “I’m very optimistic that we can continue along this journey,” he says. He believes there is plenty of room within the cost prices M&S pays for workers to be paid a living wage if productivity is improved.

Certainly, workers spoken to by Drapers in July at Interfab and another EMF factory, Dressman, also in Dhaka, say conditions at these factories are better than elsewhere. One Dressman worker says: “This is a good factory compared with where I used to work. Although the salary is lower here, the environment there wasn’t good and we suffered verbal abuse.”

A worker from Interfab adds: “In comparison to other factories, Interfab is better. But we could get more salary. It’s a hard life.” Despite the improvements, at between 2,941 taka (£26) and 3,869 taka (£35), the basic pay at M&S’s EMFs is below the new minimum wage structure, which comes into effect in Bangladesh next month. It is also well below the minimum 5,000 taka (£45) a month sought by unions and backed by the Ethical Trading Initiative, of which M&S is a member. Agencies such as Action Aid support a minimum wage of 10,000 taka (£90) a month.

What’s more, Interfab reckons it could take at least another year for it to reach its target of 60% efficiency under the GSD measure. And, while raising productivity delivers benefits, it can also raise issues. If projects focus on increasing the productivity of sewing lines, the cutting and finishing sections can struggle to keep pace. Experts in Bangladesh say factory owners often opt to handle this with excessively long shifts. This is borne out by comments from workers at Interfab, who said that, while sewing operators hardly ever work more than a 10-hour shift, those in the washing or loading section work nights.

Fateh-Ul Islam at Interfab acknowledges that the factory has had an issue with coping with additional sewing productivity. He says: “We’re now talking to GSD experts for help in streamlining the cutting room.”

With such complex operations, it’s clear retailers alone cannot improve the workers’ situation. Health and safety standards, pay and housing and medical provision for workers all call for a multi-stakeholder approach.

Collective representation

The Ethical Trading Initiative now believes that collective representation for workers is a key element in improving conditions for workers.

Khorshed Alam, a researcher specialising in workers’ rights at Bangladesh’s Alternative Movement for Resources and Freedom, says: “No factories in Bangladesh are model factories, because they don’t allow trade unions. They are bypassing fundamental elements which can make a difference, like wages. Social audits are a farce.”

In Bangladesh, all factories are supposed to have a workers’ participation committee, although few operate with complete freedom.

At Interfab, workers’ representatives from each floor are picked by the management, although M&S says some voting does take place and it is working to put a fully elected system in place.

Its training programme includes information on unions or workers’ committees, but those close to the process say that, because training is passed on by employees, they feel pressured to concentrate on health issues and workers’ duties and responsibilities within the factory rather than workers’ rights. One source close to M&S’s EMF project says: “Workers are not being made aware of collective bargaining rights, for example.”

Workers spoken to by Drapers didn’t seem aware of the full extent of the programme and said they had mainly experienced training on health and operational issues. M&S says its records show that all three Bangladeshi model factories had completed its programme but it would now investigate further.

With the right set-up, mature industrial relations can ease the cost of maintaining ethical standards in factories by allowing workers to police their conditions for themselves. If M&S can get the model right, it could prove not only effective but, potentially, cheaper - and easier than relying on outsiders to spot what’s going wrong.

Interfab Facts

32

Sewing lines, with more in the pipeline

Fairtrade certified

Services offered for staff Annual eye check-ups, counselling and medical check-ups for pregnant women, transport for 400 workers, 50% discount on hospital treatment

2,854

members of staff

Produces shirts, blouses and kidswear

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