Compliance Catch-22?

Built thirty years ago in empty spaces where all of us found promising vertical opportunities to grow, the tight and cramped buildings, till date, try to survive amidst residential areas. The old and the cramped, the new and the glitzy, the moderate and the mild … all of these stand on their ground and take pride in the $22 billion export figure that Bangladesh has today. And yes, Spectrum had shaken us, Tazreen had shamed, and Rana has humbled. With lessons learnt, it’s indeed time for the export sector to make amends and resort to remediation.
While the buyers are stressing on structural integrity and asking for soil reports, architectural, structural, electrical drawings, approvals, and even the test results on materials during construction, the manufacturers are arguing about how difficult providing all of these will be if the building is an old one. With no requirement of Rajuk approval in the ’80s, how could one turn the clock back and provide approvals, knowing full well that this process will set off yet another cumbersome, tedious and costly one? How will one possibly argue that the reinforced steel used in most of our buildings is of 40ksi and not 60ksi as suddenly required now? How will one argue that the earthing continuity conductors cannot be of 3.24mm2 as most factory buildings had used 1.50mm2 when they were built? How will one argue that the Bangladesh National Building Code came into existence only in 2006 whereas many buildings were built during 1980-2006? How shall we actually comply?
Factory buildings having more than 22,000 sq ft per floor or more than 75 feet in height must have automatic sprinkler, hydrant and self-addressable fire detection and alarm system. Emergency power is a must for lifts, exits, fire pumps, fire detection systems, smoke control systems, while battery-run signs and exit lights must be provided as well. Atriums must withstand 1-2 hours of fire while walls within the factory must be fire resistive up to 1-3 hours. Fire doors are now mandatory to protect the workers. Half of the factories in Bangladesh having more than 500 workers on a floor don’t have three exits. The new rule makes three exits mandatory. Many factories, even after complying with Bangladesh National Building Code of 2006, still won’t qualify as compliant units if sprinklers are not set up. Many factories will not be able to adhere to the rule that the circuits with more than one outlet cannot be loaded in excess of 50% of their current carrying capacity as many existing factories carry load of up to 65~70%.
In brief, the newer standards laid out for us are tough to follow while  the immediate challenges for a manufacturer involve load distribution, stair width, smoke control, sprinkler, reservoir capacity, the requirement of over current protection, approval plans, exit enclosures and fire doors.
Yet, some of these factories, which have few of the above, produce excellent products for the world’s most reputed brands, and the workers in these factories have acquired incomparable skills. Where shall we relocate? How would we readdress the structural requirements keeping the production flow unhampered? And, most of all, who’s going to pay?
Accord and Alliance, initiatives of the European and North American retailers, respectively, have both committed to pay for the remediation of the factories that they work with in Bangladesh. Point is, after these initiatives fully unfold their presence in Bangladesh, the factories that remain untraced and unauthorised and work as subcontracting units may not be producing apparel with labels of reputed brands on them, but does that make the lives of the people working there any cheaper? Compliance has to mean more than protecting reputational risks for all the stakeholders.
There are lots of issues at stake here. Cost is one of them. Time frame is another. And partnership and trust are crucial. A hydrant system costs around $40,000 for an average 4-6 line factory. As time lines are being set for factories to comply with, we also need to urge the retailers and brands to engage in a dialogue with the manufacturers to discuss payment terms for remediation. Factories also can’t be expected to transform instantly. Post Rana landscape may demand an overnight makeover of RMG, but it is by no means a reality. Remedial action requires time and, thankfully, both Accord and Alliance have committed to a five-year long engagement with the sector.
Changes may be expected phase-wise. Immediate risk assessment and basic compliance must be taken care of first. Then comes the issue of remediation and up-gradation.
A quick look at the world now; China’s textile and apparel exports reached $283.9 billion in 2013, up 11.4% from 2012, compared with only a 2.8% growth year-on-year in 2012. The 16 local unions, including the Cambodia Alliance of Trade Unions and the Cambodian Coalition of Apparel Workers’ Democratic Union, announced their intention to strike mid-March after a decision last week by the Phnom Penh Court of Appeal to deny bail to 21 protesters arrested in January. And last but not the least, in Bangladesh, apparel exports rose to $14.17 billion in the period from July to January, up from $12.04 billion a year earlier, exceeding target of $13.4 billion. Strangely, in terms of figures, we don’t look too bad globally, but all it’ll take is just a fire or an abuse to trigger alarms on the world stage and pave the way for the world to cease sourcing from Bangladesh, or at least prepare for a gradual exit.
But, with costs going up, it’s also up to the brands to reconcile with the fact that Bangladesh may not remain the cheapest manufacturing hub forever and, with the compliance standards being set so high, all stakeholders need to accept that meaningful safety should be affordable at this point of time.

The writer is Managing Director, Mohammadi Group.