Loblaw says “unauthorized outsourcing” may have been to blame, after records showed it had received 37 shipments from the Aswad Composite Mills since spring 2012. Wal-Mart Canada says it had no “direct contractual relationship” with the plant, although shipping records and signs found at the plant suggest that work for its “George” label was produced there.
Working conditions are monitored at the factories that Li & Fung and other middlemen contract with. But in most cases, that ensures – as Mr. Weston’s comments suggest – only that the factories comply with local laws. In places like Bangladesh, those laws are drafted by a weak state struggling to provide for an impoverished population of 145 million living largely on a flood-prone delta. In Transparency International’s most recent Corruption Perceptions Index, Bangladesh ranked 144th out of 176 countries – which was actually an improvement from previous years.
“The auditor just checks the [safety] certificates. That would probably be perfectly fine in Canada. In Bangladesh, [the certificate] isn’t worth the paper it’s printed on,” says Michael Flanagan, chief executive officer of Clothesource, a British firm that advises retailers on supply chains.
He says relying on local certifications – rather than an industry standard – is “an appalling dose of massive institutional ignorance.”
Mr. Rockowitz admits Li & Fung’s monitors aren’t qualified to assess the integrity of the factory buildings where the firm places orders.
“Ultimately, it’s easy to look back and say that building collapsed and you should have known,” he says. “The [quality of] construction of a building is a hard thing to recognize, if something is imminently going to crash down.”
In the wake of the collapse, a team of engineers from the Bangladesh University of Engineering and Technology launched an independent examination of the country’s garment sector. Of the first 66 factories the team examined, only six were found to be “without any noticeable distress or deviation.” If that ratio holds, it suggests that 90 per cent of Bangladesh’s estimated 4,000 garment factories are structurally unsound.
An earlier study by the same university, conducted in the wake the Tazreen Fashions fire, rated 60 factories for fire readiness on a scale of 1 to 7. Not one scored above a 4. The report warned of “catastrophic consequences” if the epidemic of problems observed – including locked fire exits and the routine lack of fire alarms – went untreated.
In an interview with The Globe, Bangladeshi Commerce Minister Ghulam Muhammed Quader admitted that the Rana Plaza tragedy amounted to “a structural failure of the governance system as a whole.”
“I’m very hopeful that people will learn their lesson, the owners will learn their lesson, the [foreign] buyers will learn their lesson and the workers will take their responsibilities and the factories will now be run in a better, proper way,” he said.
“It was necessary to have a shock.”
There are, of course, other ways that clothing retailers can keep track of how their products are made. One would be to reduce byzantine supply chains to just a handful of factories in one country. That’s the relationship factory owners say they’d prefer – partly because it would give them more clout in price negotiations.
For those who consider moving from factory to factory a necessity, there is still a way to keep watch over production lines: One model is the Better Factories Cambodia program, established in 1993 under the aegis of the International Labour Organization, an agency of the United Nations; it visits all 450 Cambodian garment makers at least once a year.
BFC has limitations, however. It is not allowed to name and shame specific factories and buyers. And that means it can’t press for better standards. While Canadian companies have signed on – Mountain Equipment Co-op purchases reports on its partner factories and HBC and Loblaw has recently spoken to BFC – many also have their own programs for monitoring factories.
Or at least they have middle men who do. Via Li & Fung, Joe Fresh regularly produces clothing in Cambodia. The orders are fulfilled at a factory about an hour’s drive west of Phnom Penh, where women – most making the minimum wage of $80 a month – stitch cotton sourced in western China into women’s shirts, dresses and sleepwear.
That work has been going on for six years, but Wilson Teo, an executive for the company that owns the factory, says he rarely sees anyone from Joe Fresh or Loblaw. Perhaps he doesn’t need to: “They rely on Li & Fung to audit to their standards.”
For all the monitoring that goes on, though, whether by producers themselves, by partner programs or by way of middle men, few people who spoke with The Globe have confidence such audits will result in real change.