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Are Subcontractee Enterprises Able to Upgrade? Insights from a Case Study

Author

Listed:
  • Khondaker Golam Moazzem
  • Md. Arfanuzzaman

Abstract

The subcontractee (Tier 3) enterprises have faced severe criticism for their poor compliance standards particularly after the ­re disaster in Tazreen Fashions Limited and collapse of Rana Plaza, which caused deaths of thousands of workers. These enterprises produced products for global brands/buyers (Tier 1) under subcontracting arrangements. Various studies show that export-oriented enterprises tend to subcontract or outsource a portion of their orders to the smaller non-compliant enterprises to reduce costs (ILO, 2014; Ethical Corporation, 2013). After the Rana Plaza tragedy, the operation of subcontractee enterprises has come under close scrutiny – Tier 3 enterprises also need to be physically and socially compliant in order to work with brands and buyers. Under this changing circumstance, the question that arises is whether subcontractee enterprises have the capacity to make necessary investment for industrial and social upgrading.

Suggested Citation

  • Khondaker Golam Moazzem & Md. Arfanuzzaman, 2018. "Are Subcontractee Enterprises Able to Upgrade? Insights from a Case Study," CPD Policy Brief 14, Centre for Policy Dialogue (CPD).
    • Handle: RePEc:pdb:pbrief:14
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