Tesco has joined forces with the British government to set up the Apparel Skills Foundation in Dhaka, Bangladesh with the goal to train suppliers, middle managers, and workers in the garment production industry.

The Skills Foundation’s center is open to all garment producers in Bangladesh — even those used by Tesco’s competitors.  Current production lines include not only Tesco’s own affordable line Florence and Fred but also Next, Zara, Mango and Uniqlo.  The Skills Foundation’s objective is to equip the Bangladesh garment industry with training, expertise and tools to improve productivity while also improving conditions, basic wage and opportunities for factory workers in general.

This is not just philanthropy, it makes commercial sense too.  In May this year Tesco launched a pilot scheme in three factories in Bangladesh.  Managers were sent to training sessions at the Skills Foundation and basic wages were raised in the three factories by 19%.  There is proof in the pudding:  in the past five months productivity was up 43%, absenteeism was down 20%, line-efficiency is up 5% and the percentage of defective products down by 30%.

Tesco’s initiative follows H&M’s urge to the Bangladeshi prime minister earlier this year to increase minimum wage in Bangladesh.  The urge was prompted by the riots by Bangladeshi workers protesting against their low wages and poor working conditions, which saw 250 textile factories across the country shut down until the unrest settled.

Programs like the Skills Foundation will also serve as a useful tool for multinationals in monitoring their own ethical policies and procedures.  It will be interesting to see who follows suit; we will certainly hear more from the fashion industry on the topic of garment factories in 2013.  The future for Bangladeshi workers is certainly looking a little brighter.