More than 1 million of Bangladesh’s over 4 million garment workers have already lost their jobs or been furloughed, according to figures reported by The Associated Press. Order cancellations and buyers refusing to pay for cancelled shipments are the cause.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said on Monday that fashion retailers had cancelled or put on hold more than $3 billion in orders because of the coronavirus outbreak. A handful of brands have agreed to pay anyway. Bangladesh is the world’s second largest exporter of clothing after China.
Where the $3 billion comes from
The association counted $1.8 billion in orders on hold and another $1.4 billion cancelled. Planned orders for April to December that were cancelled came to nearly $1.7 billion. It called the totals conservative because orders that would go to multiple buyers were left out.
Manufacturers reported cancellations by many big names, with tens of millions of dollars in purchases involved. They included C&A and Inditex in Europe, Primark of Ireland, Britain’s Marks & Spencer and Tesco, and U.S. retailers Walmart and Target. The data went into a report by Pennsylvania State University’s Center for Global Workers’ Rights and the Worker Rights Consortium, a Washington-based labor rights group.
Who is paying, and who is not
Manufacturers and labor groups have been pleading with big retailers to honor commitments to suppliers. Sweden’s H&M said it would pay for orders already under production. PVH, owner of Calvin Klein, Tommy Hilfiger and Heritage, told suppliers it is releasing invoices held since March 18 and will process later ones gradually. A letter seen by the AP said that commitment on goods in production or finished but unshipped would let factory owners secure financing to get through.
Scott Nova, executive director of the Worker Rights Consortium, welcomed both moves. “PVH and H&M are doing the right thing, in contrast to the long list of brands refusing to pay for goods workers have already made for them,” he said.
For families in garment towns, the stakes are plain. A survey of factory owners released Friday showed millions of workers being sent home without the wages or severance pay they are owed.
Bangladesh is only starting to feel the direct effects of the pandemic itself. Its government has ordered most businesses shut to slow the virus. But shocks in export markets have been feeding into the economy for weeks, and store closures abroad are straining a fragile supply chain in which big buyers have squeezed suppliers for years.
Sources
- Bangladesh garment makers say $3B in orders lost to virus
- Bangladesh garment makers say $3B in orders lost to virus
