As Death Toll Rises in Bangladesh Factory Collapse, Brands Face Scrutiny Over Ethics (Updated)

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The death toll in the latest Bangladesh garment industry disaster has risen to more than 300 as rescue crews continue to pull survivors from the rubble of Rana Plaza and search for an estimated 500 workers still missing, with more than 2,500 already rescued.

In the aftermath of the garment factory collapse in Dhaka, Prime Minister Sheikh Hasina has called for those responsible to turn themselves in. It is believed that the building owner and factory owners are in hiding after ignoring warnings from police and industry officials to forbid workers to enter the building after cracks were discovered on Tuesday. The building collapsed on Wednesday. 

“Whoever might be the culprits, and if even they belong to our party, they won’t go scot-free,” the impoverished nation’s Prime Minister warned. (Update: The factory owners were arrested on Friday night, when the death toll had risen to 336.)

The disaster shines a light, yet again, on global apparel companies that outsource manufacturing to Bangladesh, a practice that has ballooned into an $18 billion industry as clothing companies continue to adandon manufacturing in China, where inflation and rising wages are pushing up costs. The upshot: Bangladesh and its questionable garment industry is now the world’s second-biggest garment manufacturing center.[more]

According to national news agency BSS, the US receives 23 percent of the products made in Bangladesh—more than any other individual nation. Joining the roster of culpable brands already indentified from the rubble of this latest disaster is C&A, KIK and Walmart, as well as garments labeled for Canada’s Joe Fresh brand (now in every JCPenney across the U.S.), Spanish high street brand Mango, Britain’s Primark chain and Italy’s Benetton.

Workers rights advocates, labor activists and human rights organizations are calling on brands and retailers including Walmart to enforce safer factory conditions and to provide compensation to victims of such disasters. (Update: As Reuters reported on April 27, Walmart shareholders rejected a supplier safety proposal on the grounds it would raise prices.)

“A safe and an unsafe factory in Bangladesh is not matter of a huge amount of extra costs,” stated Bob Kirke, the executive director of the Canadian Apparel Federation. “It’s the desire to do it.” 

“Right now the families of the victims are grieving and the community is in shock. But shortly they, and the hundreds injured in the collapse, will be without income and without support,” Sam Maher, of the UK-based Labour Behind the Label NGO, commented this week. “Compensation must be provided by the brands who were sourcing from these factories, and responsibility taken for their lack of action to prevent this happening.”

Canadian clothing companies, unlike those in the US, can import garments manufactured in Bangladesh duty-free. “We have a big stake there, $1.2 billion in clothing duty free,” Kirke added. “That is in effect a subsidy to the Bangladesh government. So it’s perfectly within Canada’s purview to ask the Bangladesh government to do something…We’re not talking about a huge increase in costs. In some cases, it’s training in how to store things.” 

Some retailers like Walmart have cried foul, claiming that their suppliers were not authorized to outsource manufacturing to the affected factories, while others have made vague promises to help improve conditions and hold firm standards. 

This latest tragedy has spurred renewed calls by activists to pressure companies to sign the International Labor Rights Forum’s Bangladesh Fire and Building Safety Agreement (BFBSA) and commit to comply with full safety standards. So far only PVH, owner of Calvin Klein and Tommy Hilfiger, and German retailer Tchibo have signed up for the regulation, which would add about 6 cents to the price tag on an article of clothing—the reason cited by Walmart shareholders for rejecting the agreement.

“It’s unbelievable that brands still refuse to sign a binding agreement with unions and labor groups to stop these unsafe working conditions from existing,” said Maher of Western companies’ balking at adding pennies per price tag to protect workers’ lives. “Tragedy after tragedy shows that corporate-controlled monitoring is completely inadequate.”

Indeed, a New York Times story in December following a garment factory fire in Karachi, raised the issue of shoddy corporate-backed social auditing of factories:

For the past 15 years, retail giants like Walmart and Carrefour have helped create and champion numerous factory inspection systems. In embracing such monitoring, the companies are motivated by genuine concern for the workers at the bottom of their supply chain, but also by their own bottom line, worried that consumers might shun products made at factories where there are abuses.

These elaborate systems look good on paper, but the actual work is often delegated to largely unsupervised subcontractors eager to drum up more business. The company that certified Ali Enterprises, as in many other cases, never visited the factory, handing off the job to a local inspector it dealt with by telephone or at meetings outside Pakistan. For labor groups, academics and some industry insiders, the recent fires confirm longstanding fears that the voluntary system is weak, opaque and inherently flawed.

Meanwhile, in Bangladesh, building and factory owners have been ordered to appear in court next week while scores of garment workers engage in violent protests across the region, calling for the death penalty. The owner of Rana Plaza, Sohel Rana, did not have permission from Dhaka’s development authority to erect the building, said Sheikh Abdul Mannan, a member of Dhaka’s development authority, but got permission from a local authority with different building standards.

“It is clear from visiting the site that they had violated several construction codes, especially the design code,” he told Bloomberg. “I saw the materials used in the columns and the material used for the rest of the building and it was completely substandard.”

Now it’s up to consumers to ponder if the retailers and clothing brands they favor have substandard supply chain practices, too—and what they’re going to do about it.

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