It’s been nine months after the start of the pandemic.
In his garment factory amid the bustling factory belt of Dhaka, Bangladesh, Zakirul Alam, shows row after row of his production lines that sit idle, shrouded in darkness.
“I can't even turn on the lights nowadays because I can’t bear the electricity,” he says.
Once a factory full of hundreds of garment workers, Zakirul tells Dateline he’s now in significant debt and has been forced to let many of them go.
In their place, sits piles of boxes full of clothes, much of it for Australian retailer Mosaic Brands.
“If these goods would have shipped on time, I wouldn't be in this condition today,” says Zakirul.
Zakirul Alam is a supplier for overseas retailers, including Mosaic Brands. His factory makes everything from t-shirts to jeans for its popular Australian labels including Rivers, Millers and Katies.
He is just one of many factories across Bangladesh that are continuing to deal with the fallout of order cancellations and shipping delays by big overseas retailers at the height of the pandemic in 2020, amid store closures and a drop in consumer demand at home caused by COVID-19.
According to the manufacturers association in Bangladesh, the BGMEA, a long list of Australian brands were reported to them for cancelling or delaying orders as of April 2020.
The BGMEA says out of $3 billion worth of cancellations globally reported by 1150 factories in April 2020, 80-90 per cent were later reinstated. Some of the buyers took back 80-100 per cent of the cancelled orders, but some of them have not taken back any. Many of them have imposed discounts and have heavily negotiated with the suppliers in Bangladesh.
A garment worker at Zakirul's factory. Source: Dateline
Zaskirul's story
Zakirul says Mosaic Brands was a good customer and generally very good at meeting payments.
But in March 2020, at the height of the pandemic, he claims they suspended and delayed shipment of around $US 600,000 worth of goods that were already made.
According to Zakirul, Mosaic Brands began to take to these shipments in December 2020. As of April this year, more than one year after the pandemic hit, the final shipment has only recently been sent.
In this time, Zakirul says his business has suffered severe financial impacts as a result. He’s now struggling to keep his operations afloat.
As it is standard practice for brands not to pay for products until after they are shipped, when an order is put on hold or cancelled, payments are also held or cancelled.
Delayed payment for orders risks leaving suppliers like Zakirul, unable to pay for materials or their workers’ wages.
“You know what happens when you have a heavy duty earthquake? After the earthquake, where you stand and everything's broken, I'm pretty much into that right now,” he says.
According to Zakirul, Mosaic Brands also changed its payment terms, extending its payment deadline with him from 90 days to 170 days, or nearly six months, after shipping.
“I can't buy anything if the bank shuts down on me. I can't buy fabric. I can't buy threads. I can't buy your accessories. I can't do anything. Bank is the main pillar of the business,” Zakirul tells Dateline.
Zakirul claims Mosaic Brands also cancelled an order worth close to $US500,000 in March 2020, which was not reinstated.
At least two other suppliers for Mosaic Brands in Bangladesh spoken to by Dateline, say they were also negatively impacted by its order cancellations or shipping delays.
Last year in Australia, the small business ombudsman slammed retailers for extending payment terms. The ombudsman’s said that large companies were using the COVID-19 crisis as an excuse for poor payment times, and called for 30-day payment terms to be legislated.
Jasmine lost her job in September. She previously made clothes for Mosaic brands. Source: Dateline
Impacts to workers
In Bangladesh, the ready-made garment industry supports 4.1 million workers and accounts for around 80 per cent of the nation’s exports, to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
But each month more factories are closing and leaving workers with nothing.
According to research by the Centre for Policy Dialogue, more than 350,000 garment workers in Bangladesh have so far lost their jobs amid the pandemic, as the garment industry continues to suffer from disrupted buying habits of overseas retailers.
Of the hundreds of garment workers who Zakirul Alam claims he’s been forced to let go, some are still owed wages.
“I've always been at work. But I’ve been staying at home since the last three months. I don’t feel good staying home,” says 24-year-old Jasmine Akhtar.
She used to make clothes at Zakiruls’ factory but lost her job as a line worker at the finishing section in September. She’s been unemployed since.
“Since September I’ve been worrying about paying the rent, buying food, about my Dad’s eye operation so that he’d have a job. We would be better off then.”
“If I can’t pay the rent, the landlord will kick us out. I owe him three months' rent.
"3,000 taka ($46) per month. 9,000 taka ($140) in all.
“I asked my brother for some money but he didn’t give me a penny… Now I'm responsible for everything. I never utter a word because my parents will feel bad. Who’ll look after them if I leave?,” says Jasmine, weeping.
According to the (WRC), some garment workers have waited an entire year for either owed wages or their severance and can’t feed their children.
by the WRC has found tens of thousands of the world’s garment workers are still collectively owed an estimated $39.8 million in legally mandated severance compensation, in violation of the law and the labor rights obligations of the brands and retailers whose clothes they sewed.
Bangladesh’s leading garment association is amongst top business leaders now demanding an extension of Covid19 aid.
Garment workers in morning rush hour in Dhakas factory zone. Source: Dateline
Mosaic brands response
Mosaic Brands declined Dateline’s request for an interview.
In a written response to Zakirul’s claims, the retailer did not deny they delayed shipments in March 2020, thereby delaying payments to Zakirul’s factory. They also did not deny that a $US500,000 order was cancelled.
But they dispute there was any financial cost or liability to Zakirul and say that he requested the cancellation. A claim that, in turn, Zakirul denies.
Mosaic Brands says their orders make up less than 10 per cent of his annual factory production, based on January 2020 figures.
But Zakirul claims this is misleading because this figure is based on the maximum amount the factory can produce not the actual number and value of orders that were placed throughout 2020. He claims Mosaic Brands is one of his biggest customers.
The company also said they “adhere to a number of internationally recognised social compliance measures to ensure worker safety, the avoidance of modern slavery and an ethical supply chain” and provided a copy of its Modern Slavery Statement for 2020.
The company also said: “In responding to a once in a generation global pandemic the outcome 12 months later is every pre-Covid manufacturer in Bangladesh continues to choose to work with Mosaic Brands.”
In this week’s episode, COVID19: FASHION’S GREAT UNRAVELLING, Dateline investigates the fragility of fashion's global supply chain in the wake of the pandemic and reveals the impacts to those at the very bottom.
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