Indirect sourcing, a non-transparent practice of sub-contracting, is the root cause of safety risks and poor working conditions in the readymade garment sector of Bangladesh. Though indirect sourcing has helped boost the garment industry and Bangladesh's economy, however, global brands doing business in the country need to assess the overall condition of factories and address risks.

Indirect sourcing has become an essential feature of the garment sector in Bangladesh as a means of increasing margins and boosting production while keeping costs low. In the absence of regulation by the government, the prevalence of indirect sourcing has resulted in a supply chain driven by the pursuit of lowest nominal costs.

That means that factories receiving subcontracts are operating on razor-thin margins that leave concerns about safety and workers' rights perpetually unaddressed. However, subcontracting is a reality in the country’s apparel sector as many local readymade garment manufacturing units are not capable enough to do business directly with foreign buyers.

Bangladesh’s apparel makers say sub-contracting is not the sole risk factor and there are a few more. They say factories especially small and medium ones are not adequately compliant so they have no option but to depend on the indirect sourcing business.