What gets measured, gets done

Understandably, there has been an outpouring of writing on the garments industry since the Rana Plaza tragedy. One concern that people have is whether things will be different this time. There is no shortage of recommendations. But will these be acted upon? Some actions have indeed started. But are these the right actions? Will these indeed lead to results? And will the actions that lead to results be sustained over time?

These are questions that are also agitating the minds of people abroad. There have been waves of writing in the international press, particularly in the western world. These reflect long-standing sentiments, not all of which are associated with Bangladesh but which have, nonetheless, been re-ignited by the recent tragedy. There are concerns about the insatiable desire of western consumers to get cheap clothes and the willingness of western companies to go to any length to satisfy that desire. There is increased realization that all this is resulting in heavy costs, in terms of human lives and welfare, at another end of the globe. At the same time, people recognize the benefits that the garments industry has brought to many poor people in Bangladesh – a recognition that stems from a broader narrative about how a country, so disadvantaged by the vagaries of nature and the follies of humans, has managed to achieve a respectable rate of economic growth for more than two decades and posted significant gains on many social indicators.

So the western world is in a dilemma. On the one hand, it wants the industry to not only survive but grow while, on the other, it is uncomfortable with accepting the status quo. People don't expect dramatic changes overnight, but they want to see steady progress. They are tired of vague promises and want to see concrete action plans. More than anything they want evidence – solid evidence – that things are changing.

But they are not alone. We, Bangladeshis, want to see the changes too. Indeed, our sense of urgency should be even greater and our concern even broader. While we must discuss the responsibilities of the international players and ask them to play their roles, at the end of the day it is our house that we must put in order. Let us not forget that there are many industries in Bangladesh where foreign players have a limited or no role – these are industries that cater to the domestic market. As the economy grows, these industries will develop further. But they are afflicted with many of the same problems that we see in the garments industry. In these industries too, we want to see good working conditions, fair treatment of workers, productivity improvements and care for the environment.

So where do we start? We can start by remembering the saying "What gets measured, gets done".

One of the useful things that can be done in the RMG industry now is systematic and periodic rating of companies/factories on various dimensions of operational performance. Several dimensions may be considered, such as safety and overall working conditions, wages, benefits and overall treatment of workers, and environmental performance. There can be sub-categories within each of these broad categories. Each factory may be rated on a scale of 1-5 for each sub-category, with the scores combined to get an overall measure of performance. This is not a terribly novel idea. Indeed, such a rating system is at the core of the safety accord recently signed by several brands. Some of this already exists. Many brands have compliance check-lists which are applied to their suppliers in Bangladesh. But these may not cover all important dimensions, nor are they brought together to present a comprehensive, industry-wide picture. And they are not publicized but remain as private arrangements between the brands and their suppliers.

A comprehensive score-card covering the whole RMG industry, and made public, will have many merits. Such a system will help distinguish good performers from bad ones – this distinction is important in order to create incentives for good performance. It will help identify where remedial actions are needed, and monitor whether such actions are being taken and if these are leading to improvements. The factory-level data will reveal precisely where improvements are needed for each factory. That should guide factory-specific actions. The brands that buy from the factories may support such improvements with both technical and financial resources; in return, they may make future orders contingent on improvement. The data will serve as a good bench-mark against which improvements can be assessed.

The industry level data will be useful in other ways. These will help all stakeholders, national and international, evaluate whether things are improving for the industry as a whole. It will help identify patterns. Thus, for example, things may improve along some dimensions but not others. Or efforts to improve on some dimension may distract attention from others, thus making things worse on those fronts. Once such patterns are revealed, corrective actions may be taken at the industry level to complement actions being taken at the factory level.

The data can also be analyzed at the cluster level. We know that most of the RMG factories are located in geographic clusters, not in industrial zone with clear boundaries but nonetheless in some concentrations. Cluster level data may show a divergence in performance within each geographic cluster. There may be some factories with fairly good performance with others lagging behind. One may then explore the possibilities of knowledge sharing – can the laggards learn from the vanguards. What are the processes that may foster knowledge sharing? What incentives are needed – for sharing and receiving knowledge?

Some thinking will be needed to design such systems well. However, we need not reinvent the wheel. As mentioned before, the ingredients of such systems are already present in Bangladesh and one can build upon those. We can also learn from countries which are more advanced in this area. An example is Vietnam. Here is a link to a document that summarizes the most recent results from a similar system in that country, run by Better Work, a joint ILO-IFC initiative. The latest report summarizes findings from 132 Vietnamese factories covering the period Feb 2012 to Jan 2013. The report covers some aspects of working conditions but not all (for example, construction safety is not included but aspects of fire safety are). This is the sixth report in a series that started in 2010; one of the chapters thus talks about changes over time. (http://betterwork.org/global/wp-content/uploads/BWV-6th-synthesis-report-260413-final.pdf)

The real challenge will be in ensuring that such a system leads to results on a sustained basis. This will require a combination of carrots and sticks. There will be a need for oversight, including by citizens. There will be need for creative thinking on incentives. On the former, some sort of public disclosure of the data will be important. On the latter, one idea could be to link the provision of government support (such as the cash subsidies that the garment industry currently receives) to good base-line performance and improvements in performance over time. There are many ways in which such performance links may be designed. There could be a minimum threshold that a factory will need to cross in order to even operate. Those above that may get a fiscal support. One can even think about a second threshold, i.e., those above the first threshold but below the second are allowed to operate but do not get a subsidy, which is available only if they cross the second threshold. There are some additional issues in linking performance to subsidies. Will the minimum threshold apply to all dimensions of performance that are included in the equation or only to some critical ones, such as the safety-related ones? Will there be staggering, i.e., include only one or two dimensions now but add more later, and/or have more generous thresholds now but make them stricter over time?

These are all nuances of design. However, this is where the collective wisdom of many people in Bangladesh and abroad will be useful. The tragedy has induced many people to think about what they can do to help. This is one area where many people, from their respective vantage points, can contribute in some way or the other. It is time to get things done. Measurement is one place to start.

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Syed Akhtar Mahmood works for an international development agency in Washington DC.