QIMA, a leading provider of supply chain compliance solutions, has reported a sharp increase in violations within Bangladeshi apparel factories, with critical issues related to working hours and wages found in 37 per cent of audited factories between January and September 2024.

According to the report, over half of all critical non-compliances in Bangladeshi factories were linked to working hours and wages, compared to about one-third globally.

‘From January to September 2024, critical violations related to working hours and wages were found in 37 per cent of audited factories in Bangladesh, at more than double the rate of 2023. Consequently, average compliance scores in this category dropped by 26 per cent from the previous year,’ QIMA said.

The report titled ‘Q4 2024 Barometer: Global Supply Chains Battle Old and New Disruptions, Poised for the Coming US Election Fallout’ said that these findings reinforced longstanding trade union concerns about endemic worker compensation issues in Bangladesh’s supply chains.

According to the report, the global incidence of critical violations related to working hours and wages identified during factory audits was 16 per cent, with rates of 20 per cent in China and 11 per cent in Vietnam.

In Bangladesh, the rates were 9.0 per cent in 2022 and 17 per cent in 2023, the report said.

QIMA in its report said that over a decade after the Rana Plaza tragedy, while Bangladesh was no longer synonymous with deadly working conditions, a year-long surge in garment worker protests has revealed persistent issues with working hours, pay, and freedom of association in the RMG sector.

It, however, said that despite these challenges, a recent agreement between industry players and worker representatives reached in late September offered a glimmer of hope for improvement in the country’s garment industry.

The report mentioned that in 2024, Bangladesh’s textile and apparel sector faced significant struggles due to political upheaval and industrial action, resulting in the shutdown of numerous factories and forcing global brands and retailers to seek alternative sources for their holiday season stock.

QIMA report revealed that demand for textile and apparel inspections in Bangladesh grew by only 3.0 per cent year-on-year in Q3 of 2024, contrasting sharply with the significant increases seen in China by 25 per cent, Vietnam by 49 per cent, Indonesia by 30 per cent and India by 65 per cent during the same period.

QIMA data showed that demand for inspections and audits was growing by double digits year-over-year in Vietnam, Indonesia, and Cambodia.

However, in September, there was a decline in demand for Southeast Asia sourcing, likely due to a combination of demand fluctuations and business losses in factories affected by Typhoon Yagi.

The barometer report said that the nine months into 2024, the global sourcing landscape faceed a tug-of-war between rebounding demand and various supply-side challenges, including armed conflicts, natural disasters, and industrial actions like the recent dockworker strike on the US East Coast.

In response, buyers are extending lead times, shortening supply chains, and reconsidering partnerships with China, though this strategy may pose risks for American brands depending on the outcome of the US presidential election, it said.

The report mentioned that as disruptions became the norm in global sourcing, brands and retailers were preparing early for the 2024 holiday season, with many turning to China as a reliable option.

QIMA data indicated a 21 per cent year-over-year increase in demand for inspections and audits in China from US and EU buyers in Q3 of 2024.

Despite US supply chains gradually decoupling from China, this quarter’s trends confirm that China remains a vital global sourcing partner, though new tariffs and an impending crackdown on untaxed e-commerce purchases are creating tension for the US businesses, the report said

‘With the presidential election approaching, the next few months could be crucial for trade relations between the two economic powers,’ QIMA report added.