“The Low Price” of the textile discounter KiK – consequences for labour conditions in textile factories in Bangladesh

Final version of the case study:

“The little Price” of the textile discounter KiK – consequences for labour conditions at textile factories in Bangladesh

1) Introduction

This case study wants to highlight a special part of the worldwide globalisation movement. The concentration lies thereby on the textile industry of low wage countries exemplified at the case of Bangladesh. Starting point for this study is the German garment discounter KiK and its price politics. To buy cheap clothes in Germany is something really normal for us today, but most of us do not consider or take care about where these clothes come from, by whom they are produced at which circumstances, for example labour conditions. This case study should offer a first inside-view into the economic methods that lead to such cheap prices and the humanity aspects considered with it.

At the beginning of chapter 2 I give a short presentation of Bangladeshi economy and the social situation. It is important to see labour conditions not only in comparison to Western standards but also to local living conditions based on real basic needs of economic survival. Globalisation as influential criteria on labour conditions is mentioned in the next paragraph. It will be shown that globalisation has had impact on Bangladeshi textile industry which was both positive as negative for the economy and the workers.

The chapter 3 is dedicated to the German garment discounter KIK and in general to the strategies huge discounter use to determine their prime costs. The profile of the KiK company will be presented and its advertising promises will get discussed. The market power of big discounter companies is the subject of the next paragraph. As an example the different price components of a T-shirt are shown. Additional aspects of the interaction of garment discounter and the textile industry at low wage countries are the purchasing practises of the business companies. Three tendencies can be made up that are of significant impact on the textile industry. As interesting last point in this chapter the KiK company statement on their behaviour as bulk buyer will be shown. This implies the code of conduct and how it is put into action and controlled.

After the previous chapter did present what a discounter does to achieve little prices and my introduction concerning Bangladesh as a place that offers cheap work, I like to focus on the Bangladeshi labour standards in detail in this chapter 4. A research study gives concrete inside views on insufficient labour conditions in garment factories which produce cheap clothes for the Western market, also for the KIK company in Germany.

The missing labour conditions lead me to the next and last chapter 5. It is dedicated to a final summary and an outlook. In this chapter I want to discuss the usefulness of the code of conduct in general and in this example. During a final outlook I like to present some possible strategies for the future for example more powerful conducts and under which political circumstances they can get active.

2) Bangladesh – economic and social facts

2.1 Geographic and social information

In Bangladesh lives a population of about 164,4 million people on an area of 147.570 square kilometers. That makes the country to “one of the most crowded on Earth”. Bangladesh lies in the Ganges-Brahmaputra river system which makes the land very fructuous. The annual floods on the one hand are helping and welcomed because they give fertility to the land, but on the other hand they sometimes destroy the harvest and kill the people who are living near the river. Most of the Bangladeshi people live from agricultural production, for example “wheat, barley, maize, potatoes, pulses, bananas and mangoes”. The Bangladeshi people are very poor. Around 25% of the population is suffering from hunger. The garment industry contributes enormously to the economic development. 2 million people are working at the 3.500 factories. 85% of them are women from the rural regions who need to work in the cities because of job shortage in their home regions. The work at the garment factories is their only chance to receive income that helps to save the survival of the family.

References

--Reibe 21:32, 22 January 2011 (CET)

Literature review

Resource 1:

Title: Internationale Arbeitsstandards in einer globalisierten Welt. Published by Ellen Ehmke, Michael Fichter, Nils Simon, Bodo Zeuner (Hrsg.). Published in VS Verlag für Sozialwissenschaften / GWV Fachverlage GmbH, Wiesbaden 2009.

a) Content of the resource

This book is based on and developed during a project module about International Labour Standards (ILS) in a globalised world at the Otto-Suhr-Institute for politics at the University of Berlin 2005 until 2006. The texts were written by students of this course and their professors. It is an overview about the problem of International Labour Standards (ILS).

b) Usefulness of the resource

This book offers 4 main chapters in which different sub-texts are located. The first chapter gives an introduction and shows a theoretical placement. This chapter is interesting for me because I get an overview of the interaction and the consequences of globalisation and labour standards in deveolping countries. The "race to the bottom theory" is of special interest for me. The second chapter introduces actors and organisations of ILS. The third chapter highlights instruments of ILS. In this part two articles are especially interesting. The first gives a concrete example in the textile industry: the code of conduct by Hennes & Mauritz. The second article appeals to the question "why" the compliance with core labour standards is so low in developing countries. Chapter four ends with an outlook and shows some perspectives.To sum up: This book provides information on ILS and some general aspects on globalisation and its consequences on labour conditions in developing countries. I think it is very useful.

c) Limitations of the resource

It doesn't offer information on the special case I like to highlight as an example in my case study. I like to present the German KIK company as an example for the textile industry that uses globalisation for obtaining cheap manpower.

Resource 2:

Title: Globalisierung. Author: PD Dr. Norman Backhaus. Published by Prof. Dr. Rainer Duttmann, Prof. Dr. Rainer Glawion, Prof. Herbert Popp, Prof. Dr. Rita Schneider-Sliwa. Published in Westermann Bildungshaus Schulbuchverlage, Braunschweig 2009.

a) Content of the resource

This book provides a general overview on globalisation issues. It catagorizes globalisation and gives a historical background to the development of globalisation. The book offers a chapter on the field of economy.

b) Usefulness of the resource

For me this book is of interest because it offers me on the one side an overview and introduction on globalisation, so that I can get in touch with the theme, and on the other side it provides a description of the production-development in the textile industry.

c) Limitations of the resource

It doesn't offer so many concrete examples. It is more kind of an overview.

Resource 3:

Title: Die KIK-Story - die miesen Methoden des Textildiscounters. Published in TV at „Panorama -- die Reporter"  ARD. Author: journalist Christoph Lütgert. The video was first broadcasted at August 4th, 2010: http://daserste.ndr.de/ndrsondersendungen/ard1584.html

In addition: Online newspaper article: Das schäbige Geschäft der Preisdrücker (TV-Film über Textildicounter KIK). Published at Spiegel Online. Author: Christian Teevs. Published at August 4th, 2010: http://www.spiegel.de/kultur/tv/0,1518,709922,00.html

a) Content of the resource

This video shows the methods of the German textile discounter KIK to reduce their costs. The sufferer are the German sales people and especially the worker of the textile facility in Bangladesh. The sewer were interviewed about their labour conditions. The Bangladeshi sewer earn only 25 Euro per month and have barely enough money to buy food.

b) Usefulness of the resource

These two resources are very useful. They are the starting point of my case study. They provide a special case that I like to focus on. The theme is based on these resources, the labour standards in the textile industry focused on especially Bangladesh. The video offers an insight view in the textile facilities and the living conditions of sewer in Bangladesh. Khorshed Alam, a researcher on labour standards, is also interviewed and bemoans that KIK hasn't changed labour conditions even though there has been lot of criticism in the last years.

c) Limitations of the resource

This reportage only views some aspects of labour conditions. It is necessary to see it as a starting point and investigate more resources connected with ILS.

Resource 4:

Title: Textilarbeiter in Bangladesch wollen höhere Löhne. (Protest gegen Ausbeutung). Published at Spiegel Online. Author: Christian Teevs. Published at Juli 30th, 2010: http://www.spiegel.de/wirtschaft/soziales/0,1518,709358,00.html

a) Content of the resource

This online newspaper article informs about the demonstrations of worker and sewer in Bangladesh. They demonstrate in Dhaka for higher minimum wages. Bangladesh has the lowest industrial wages worldwide. It was about 19 Euro and is now raised to 34 Euro. That isn't enough for the worker. They say that the government acts the way the textile industry desires to.

b) Usefulness of the resource

It shows another side of the labour standard problem and how the exploited people start to engage for their needs. It gives me additional points for new investigation. What are the wishes of the textile working labour union?

c) Limitations of the resource

This article is very short but leads me to investigation about special aspects of labour standards. I also read in another article that says that often the buildings of the facilities are not quite safe. Fire and collapses of buildings occured in the past. During such catastrophes many workers died.

Resource 5:

Title: Who pays for our clothing from Lidl and KIK? Published at Kampagne für Saubere-Kleidung (Clean Clothes Campaign; CCC). Published as brochure at January 1st, 2008: http://www.saubere-kleidung.de/downloads/publikationen/2008-01_Brosch-Lidl-KiK_en.pdf

In addition the online article: http://www.saubere-kleidung.de/2008/ccc_08-01-30_pu_discounter_lidl-kik.html

a) Content of the resource

This brochure offers a lot of information about the textile industry in Bangladesh and the methods of the textile discounter KIK.

b) Usefulness of the resource

It is very useful for my case study. There are articles included of the expert for labour standards in Bangladesh Khorshed Alam. These detailed descriptions support me with the key information I need for developing my case study. The campaign is launched by activists who are really engaged in the issue of labour standards and know about globalisation influences. They highlight many important points.

c) Limitations of the resource

The study for the campaign was published in 2008 and is therefore 2 years old. But I think that this doesn't matter much, because the other articles I read support my opinion that unfortunately nothing has really changed since 2008.

--Reibe 23:32, 15 January 2011 (CET) --Reibe 09:06, 16 January 2011 (CET)