Foreign Companies Sourcing from Bangladesh Highly Exposed to Reputational Risks

Following the collapse of the garment factory in Dhaka, companies may be subject to tightening regulatory supervision and increased scrutiny of working practices within their supply chains and operations in Bangladesh, according to Maplecroft's Country Risk Report for Bangladesh.


Garment manufacturers constitute one of the most powerful political lobbies in the country, given that the industry contributes nearly 80 per cent of Bangladesh’s foreign exchange earnings.


The owner of the collapsed building, Mohammad Rana, is himself affiliated to the ruling Awami League (AL) party. In light of this, a systemic crack-down on widespread labour rights and safety violations is unlikely in the near term, despite the public outcry.


A majority of the workforce in Bangladesh’s garment industry comprises women, who are particularly vulnerable to rights abuses in the workplace. Further, migrant women workers from rural parts of the country have little access to or knowledge of their legal rights and are often paid below the recommended minimum wages.


Labour rights within the garments industry are being increasingly threatened both by the powerful textile lobby and the government. Prominent union leaders face risks to their lives, and threats of intimidation.


Bangladesh has just 18 qualified labour inspectors for monitoring the nearly 5,000 garment factories in the Dhaka area alone. High levels of corruption and political interference in the inspection process will continue to jeopardise the integrity and safety of garment manufacturing operations.


This combination of factors leaves foreign companies sourcing from Bangladesh highly exposed to reputational risks from association with breaches against the rights of workers.


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