RISC Report: Early Impacts Of Coronavirus On Bangladesh Apparel Supply Chains

May 17, 2020 | Dhaka, Bangladesh

The Regulation of International Supply Chains (RISC) team, part of the Copenhagen Business School has published a report on the effects of coronavirus in the Bangladesh apparel industry and its 4+ million workers: RISC Report: Early Impacts of Coronavirus on Bangladesh Apparel Supply Chains. 

The report summarizes issues that have arisen in the Bangladesh apparel industry as a result of Covid-19 as well as providing an analysis on the key challenges faced by the industry. 

The responsibilities and responses of different stakeholders are also considered. While some brands have chosen to support the industry despite a fall in sales others have chosen to ‘push financial liabilities from wealthy buyers onto suppliers who operate with very thin margins’. Primark’s initial response to a sharp decline in sales was to cancel orders.  Following international outcry, the company set up a special charitable fund to pay workers’ wages. The report highlights that ‘While charitable funds offer welcome and needed support for workers, the “charitable” positioning of these efforts sends a worrying signal about the voluntary nature with which buyers view their responsibilities to the workers on which their businesses depend.’ 

The report further explores the nation’s decision to gradually reopen factories despite the data indicating a rising trend in the number of infected cases, stating that ‘many buyers reversed their initial order cancellation decisions and agreed to accept products already in production, so suppliers were pressed to finish and ship the orders’, which accelerated the push to re-open factories. However, the risk to workers’ well-being remains high and the decision to reopen should have been informed by ‘modelling which balances transmission rates and healthcare capacity with economic objectives’. 

That said, the report concludes on an optimistic note, stating that with collective goodwill and clear direction, the industry would be able to ‘safeguard the health and livelihoods of the workers on [whom] the sector depends, as well as to facilitate the economic recovery’. 

The report can be read here.