A year ago Loblaw Cos. Ltd. became a poster child for the dangers of cheap-chic production in the developing world after its Joe Fresh clothing was found in the rubble of a factory building that collapsed in Bangladesh, killing 1,138 people.
Loblaw executive chairman Galen G. Weston was quick to acknowledge the Canadian retailer’s production at the site of the tragedy, even as other merchants stayed silent. Along with compensation for the victims, he pledged to put the company’s own people on the ground and launch factory inspections for building structure safety for the first time.
A year later, one of the 40 garment plants that Loblaw uses in Bangladesh suspended operations a couple of weeks ago, after independent inspections found its concrete floors and walls weren’t sturdy enough. A few others needed minor changes, said Frank Merkley, senior director of supply chain at the company, who was transferred to Asia in January; other factories are waiting to be third-party inspected.
“I’m encouraged by the transformation that has happened in short order,” Mr. Merkley said in a telephone interview from Hong Kong. “And this is only the beginning too. There is lot of work ahead of us.”
Progress in improving working conditions at garment factories in Bangladesh since the April 24, 2013, Rana Plaza tragedy is slow and subtle. But the fact that there is a process underscores how the disaster has become a flashpoint in the debate over fashion production in poor countries.
The Rana Plaza building collapse galvanized Western brands, ranging from the Swedish affordable fashion chain H&M to Loblaw, to focus on problems that had been festering for some time. Now the tangle of different groups and interests investigating the troubles need to co-ordinate their work and ensure the investments aren’t in vain.
Two coalitions were formed after the disaster to work for change, including the Bangladesh Accord for Fire and Building Safety, which has more than 150 members, many European companies such as H&M, and Loblaw, the only Canadian.
“Of all the inspections that we’ve carried out to date, we haven’t found a factory that doesn’t need to do something” to meet the Accord’s building standards, Alan Roberts, its executive director, said in an interview.
Of the Accord’s 260 or so inspections so far, eight resulted in the organization asking the Bangladesh government to temporarily shut those factories, he said. Last month, a report was posted online that detailed inadequate sprinkler systems and fire doors and dangerously heavy loads on some floors for the first 10 factories it inspected.
Another organization, called the Alliance for Bangladesh Worker Safety, has 26 members, including U.S. discount giant Wal-Mart Stores Inc., Canadian Tire Corp. and Hudson’s Bay Co. It has checked more than 450 factories so far, and recommended three be closed, two of which have already shut, senior adviser Ian Spaulding said.
On Wednesday, World Vision Canada, a children’s advocacy group, called on domestic garment companies doing business in Bangladesh to join the Accord (World Vision launched a No Child For Sale online petition to that effect), partly because it is committed to being transparent about the details of its independent factory checks.
Still, both the Accord and the Alliance “fail to address the greatest risks of this system,” a report this month by the Center for Business and Human Rights at the New York University Stern School of Business said. Those risks are tied to “indirect sourcing” or middlemen subcontracting garment work often to “non-compliant plants with minimum standards for safety and workers’ rights,” it says.
“The worst conditions are largely in the factories and facilities that fall outside the scope of these agreements,” the report adds.
Dave Toycen, president of World Vision Canada, said the process is complex and will take time. “What we don’t want is for companies to walk away because it’s too difficult.”
Loblaw’s Mr. Merkley said the company is committed to staying and working with factory owners, who are required to continue paying wages if their plant is closed because of unsafe conditions.
Mr. Merkley has hired a native Bangladeshi and former employee of the company that owns discount fashion retailer Zara to work exclusively in that country. He said he has personally checked 40 per cent of the factories Loblaw uses in Bangladesh and feels confident, for example, that the designated fire safety employees understand safety procedures, a marked improvement from a year ago. “It’s a sense of achievement.”
Loblaw has also committed to pay $5-million in relief and compensation, including $3.7-million to the Rana Plaza Donors Trust fund, which has raised $15-million – well below its $40-million target.
Other retailers have made various moves. Wal-Mart, which says it didn’t have production at Rana Plaza at the time of the tragedy, has committed more than $15-million, and spent $13-million, to improve factory safety, said spokesman Alex Roberton. HBC has started disclosing which factories it works with in Bangladesh.
Loblaw is “contributing more than its share,” spokesman Bob Chant said. “In our view, the collective industry response to the Rana Plaza collapse has taken too long and various necessary steps have yet to be taken.