At about 8:30 a.m. one morning in April, a generator rumbled to life at Rana Plaza – rattling the building, as it always did when it started.
Work had just begun at the welter of garment factories when the power went out. So a manager on the seventh floor, home to the New Wave Style factory, was quick to stand up as the lights went back on and announce that the building was safe. Everyone should continue doing their jobs.
But this time, Rana Plaza didn’t stop shaking.
“He died on the spot as he was announcing that we should keep working,” Raehana Akhter recalls. Then she fell, too. “It was like stepping into an elevator [shaft]. I felt this feeling in my stomach, and then everything fell.”
When she landed, Ms. Akhter, a 22-year-old mother who worked as a quality control officer for about $2 a day, was in complete darkness, with her left leg trapped under shattered cement.
“The ceiling was just here,” she says, putting her hand about 30 centimetres above her face. “I felt like this would be my little grave.”
The building did become a grave – for 1,129 people. Its collapse was the world’s worst industrial accident in almost three decades.
Fatal accidents in the garment-trade belt around Dhaka have become all too regular.
The Rana Plaza deaths added to a toll of 117 who died in a November, 2012, fire at Tazreen Fashions. And that disaster was echoed by another fire this week, which claimed 10 lives at the Aswad Composite Mills factory.
But Rana Plaza had a particular resonance in Canada. Months after the building’s collapse, brightly coloured clothing with Joe Fresh labels – the signature cheap-chic Loblaw brand – could still be found amid the broken bricks and twisted rebar at the site.
Many of those who died in Rana Plaza were producing Joe Fresh clothing as the building started to shake. The last shipment to leave New Wave Styles was on April 22: 725 cartons of printed shorts bound for North America. And it was just the most recent of at least 44 major shipments from New Wave Style to Loblaw in the 10 months preceding the disaster.
The collapse of Rana Plaza spotlighted the potentially tragic costs of the cheap T-shirt – now a staple of fast fashion – and sparked debate about just how much responsibility retailers should have for the supply chain that moves product onto their shelves.
As garment factories have pushed into new markets in search of ever-cheaper labour, the apparel industry has become perhaps the ultimate symbol of two decades of globalization. Once a cornerstone of Canadian industry on Spadina Ave. in Toronto and Chabanel St. in Montreal, the manufacturing of clothing now ties together Western consumers and distant Asian workers in a cycle driven by trends and budgets that change with the seasons. No product better represents how our economy has been altered than the global tee, the fashion basic that’s sold for miraculously cheap prices, sometimes just $5.
As The Globe and Mail found during more than two months tracking such T-shirts – from the cotton fields of China to the gleaming offices of Hong Kong and Singapore, to factories in Cambodia and Bangladesh and back to Canadian stores – supply chains are increasingly fragmented. Production leapfrogs from city to city. Middlemen outsource to other middlemen. Governments make bold claims but few checks on safety. And the consumer knows little about the long and tortuous path journey of that T-shirt to the store – only that it has become far more affordable than it ever used to be.
Yet as the ties between countries have become stronger, accountability has become a loose thread. The Globe’s investigation shows how companies such as Loblaw place their orders through middlemen, who in turn source work to a network of far-flung factories. The retailer whose shelves are stocked with cheap T-shirts in many cases does not know where in the world it or its materials is going to be produced when an order is placed. Inspecting buildings and working conditions has been beyond the retailer’s scope.
Much of the clothing worn by Westerners starts life in South and Central Asia – most frequently in the cotton fields of China.
The country’s dominance owes much to a centralized system of state capitalism. Beijing has ramped up production in the arid west of the country to feed the hungry garment factories on the east coast and, increasingly, Chinese-owned factories elsewhere.
It was the guiding hand of the state that sent Shi Yanli’s family to the cotton fields here.
Her family’s roots are in Henan province, 3,000 kilometres east. But like many others in this town of 300,000, founded in 1953 by a unit of the People’s Liberation Army, her parents came here for the opportunity to live in subsidized housing and rent farm land from the local bingtuan, or “army unit.”
Workers even have the right to sell some of the cotton they produce – once they meet quotas for fixed, below-market-rate hauls.
So on a hot June day, Ms. Shi painstakingly plucks weeds with 12 others in the blazing sun, her eyes barely visible between a protective pink scarf covering her head and a purple one over her mouth.
“It’s good in Shihezi,” she says. “We have plenty of karaoke places and 3-D movie theatres.”
The economic opening in China that has allowed for mega-movie houses in small towns in the Gobi Desert is also what sparked the revolution in fast fashion.
In the early 1990s, a pool of millions of workers was suddenly available to companies around the world, willing to put in long hours for a fraction of North American wages. Even with shipping and import costs factored in, clothes could suddenly be produced drastically more cheaply than in the West.
And if the quality wasn’t quite as good, that was part of the magic of fast fashion: It didn’t have to be durable. Soon enough, something else would be the “in” design or colour.
But the explosion of factory work also gave employees more leverage than ever before. Strikes became increasingly common and the Communist government – ever conscious of the need to ensure social stability in a country of 1.3 billion – obliged workers with across-the-board minimum wage increases.
China’s industrial belt also began to move up the global value chain. Even where wages were equal, young workers preferred assembling computer parts to toiling amid the heat and chemicals of garment factories.
In recent years, the garment industry has started moving on from China, to even cheaper countries such as Vietnam, Cambodia and Sri Lanka. Cheapest of all is Bangladesh, where a garment worker is guaranteed just $38 a month. And the cost of doing business there is further reduced by lax enforcement of safety standards.
That doesn’t mean China still doesn’t play a key role. That role has just expanded from straight manufacturing to matchmaking as well – connecting retailers in the West with factories all over Asia that can deliver clothes cheaply and on time. Indeed, as the fast fashion becomes increasingly complex, those at the centre of the industry’s web of supply and demand – the middle men – have taken on oversight of everything from negotiating with factories on price, setting the conditions under which work is done and even conducting building checks where necessary.
No one personifies the middle man more than Bruce Rockowitz.
The 53-year-old – originally from Vancouver – is the chief executive officer of Li & Fung, the industry’s largest middleman.
After moving to Hong Kong from Canada in 1979, Mr. Rockowitz co-founded his own trading house – and outbid established players to land major American clients. Soon, one of those established players, Li & Fung, founded in 1906, bought up his company and asked him to head up the firm. (The first non-Fung to do so.) Since then he’s expanded the company’s network to 15,000 factories across Asia.
Along the way, the gregarious Mr. Rockowitz has also become a billionaire, married a local pop star and, when he’s not working at the glass-clad LiFung Tower, is seen driving a blue Bentley with a “Rock 8” licence plate around the city.
But that flash shouldn’t deflect attention to his real power over the supply chain. He works with such industry giants as Wal-Mart and Tommy Hilfiger. Hudson’s Bay Co. has Li & Fung manage much of its apparel outsourcing. And Loblaw and Joe Fresh are another client.
Twice a year, designers from Joseph Mimran & Associates, the creators of the Joe Fresh line for Loblaw Cos. Ltd. (Mr. Mimran is the “Joe” in Joe Fresh”), travel to Asia clutching precious cargo – the next season’s designs – which are then passed on to factory bosses.
Those bosses say that when deals are consummated, middlemen generally take about 5 per cent of the contract’s value from each side.
To Mr. Rockowitz, the logic of outsourcing the outsourcing is inescapable.
“Retailers are very focused on opening stores, marketing, designing product,” he says. “We focus on the supply-chain aspect, the sourcing side, the logistics side, and then creating brands they don’t want to do in-house … basically, doing what our customers don’t want to do, so that they can focus on growing their business.”
Thanks to the outsourcing boom, Bangladesh’s garment industry has exploded in size, from a few dozen factories in the early 1990s, to several thousand today. The “ready-made garments” industry – as it’s known in Bangladesh – now accounts for almost 80 per cent of the country’s export earnings and 10 per cent of its gross domestic product.
But the sector has grown far faster than the cash-strapped government’s ability to monitor and regulate it. Entrepreneurs eager to grab a share of the action frequently start with a permit to build a low-rise shopping centre, and then, as at Rana Plaza, pile factories on top of factories in Jenga-block buildings that the original foundation was never meant to support.
In the hours after Rana Plaza collapsed, Ms. Akhter could hear, but not see, the other survivors around her in the dark. “People were screaming, ‘Someone save me!’ ‘Oh God! Oh God!’ I was trying my best to pull the wall off my leg, but I couldn’t budge it.”
After several hours of lying in the darkness, Ms. Akhter heard another sound: rescuers clawing their way toward her. A pinprick of light – and air – grew into a hole large enough for someone to drop her a bottle of desperately needed water. Eventually, a rescue worker was lowered down to her. “When I saw him, I begged him, ‘Brother, just cut off my leg and carry me out of here. I just want to survive.’<TH> ”
The rescuer refused, and returned with a shovel that he used to free her crushed limb. Ms. Akhter remembers reaching a hospital. Then she collapsed into a coma.
Although Loblaw was more forthcoming than most affected retailers in the wake of the disaster at Rana Plaza, the lines of responsibility are still blurred.
Loblaw, the parent company of Joe Fresh, didn’t have a direct relationship with the factories that produced its clothing at Rana Plaza. The orders that ended up there came through at least one middle man, maybe more.
Bashir Ahmed is a factory floor manager at Rana Plaza. “We were making clothes for Loblaw for five or six years. Joe Fresh was 50 per cent of our production, about 50,000 pieces a month. Sometimes it took up the whole [production] line,” Mr. Ahmed says.
He says orders started at Pearl Global Industries, a New Delhi sourcing company similar to Li & Fung, then went to a Bangladeshi subsidiary called Norp Knit Industries, then arrived at New Wave Styles for his team to handle.
“Four or five us were standing together, talking. Then suddenly everything started going down. My head couldn’t process what was happening,” Mr. Ahmed recalled of the moment of collapse. When he landed, everything around him was pitch black. “I couldn’t feel anything. I was numb. All I thought was ‘these are my last moments.’ I lay there praying.”
A Loblaw spokesperson said on the day of the disaster that the Rana factory produced only “a small number of Joe Fresh apparel items.” A week later, the company’s executive chairman, Galen G. Weston, told reporters he had reviewed available information in detail and was “deeply troubled.”
“This was a senseless tragedy,” he said. “Based on what we know, the top floors of the building should never have been built. And reports from the ground suggested the garment workers should never have been allowed back in the building after an evacuation was ordered.”
The details under review included audits of Rana Plaza. But as Mr. Weston said, those reports don’t cover structural integrity. To mitigate that, and what he calls “unacceptable risk” to workers, he’s pledged to make sure factories uphold local construction and building codes – and that the grocer’s own people will be “on the ground.”
Loblaw has also committed an undisclosed amount to victims of the Rana Plaza collapse, along with giving $1-million to the Centre for the Rehabilitation of the Paralyzed hospital in Bangladesh and the Save the Children charity.
This week, Loblaw spokeswoman Julija Hunter would not discuss specific suppliers used by Loblaw but said the company pays for social compliance audits that check working conditions. “If we found that a factory was not compliant, we would work with them to put into place a corrective action plan and audit to ensure that they were compliant. If they are not, we would not do business with them.”
Meanwhile, almost three months after the disaster, Mr. Ahmed was still recovering from the injuries he suffered on April 24 – a smashed left leg that required bone to be transplanted from his pelvis.
‘Massive institutional ignorance’
The Rana Plaza collapse has certainly inspired some soul-searching in the West about how to avoid recurrences. But it also inspired a good deal of equivocation. Indeed, after this week’s fatal fire at Aswad Composite Mills, some of the same Western brands that did business at Rana Plaza were still professing a lack of responsibility for the working conditions of those who contribute to making their clothes.
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.
“The buyers are actually the ones responsible for things like subcontracting and [illegal] overtime,” says Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia. “They know the capacity of their suppliers. If the factory has a capacity of one million and they place an order for 1.5 million, that extra has to come from somewhere.”
“But they don’t want to know. It’s ‘don’t ask, don’t tell.’ That’s the business model,” Mr. Loo continues.
A need for change
One way to change working conditions may be to change that business model – and the price of the global T-shirt.
That’s certainly what Bangladesh Prime Minister Sheikh Hasina is pushing for.
“Buyers should come up with necessary support and increase the price of the clothes so that the garment workers can get better wages to improve their economic condition,” she told the visiting Dutch Foreign Minister this spring.
Fellow Bangladeshi Mohammed Yunus, a Nobel-winning economist, has a more specific proposal – that all made-in-Bangladesh clothing be subject to a 50-cent tariff that would flow to a fund for improving wages and safety, and perhaps establish a pension plan for garment workers: “Would a consumer in a shopping mall feel upset if they were asked to pay $35.50 instead of $35 for the item of clothing? My answer is: No, they’ll not even notice.”
Mr. Rockowitz of Li & Fung says he sees a new awareness among consumers. “What’s happened now – what’s going on in Bangladesh – I think people are much more hypersensitive. I think it’s going to improve the industry,” he says. “The last 10 years, most reputable retailers had a concern about [factory] compliance, but it wasn’t right at the top. Now it’s right at the top.”
Swedish giant H&M, for example, was a favourite target of the lobby group Clean Clothes Campaign for years. Now, it makes its supply chains public information, and pays extra to factories to ensure basic safety standards are met. Wal-Mart made a blanket declaration that it will stop producing in any factory that does not meet its standards, which has factories scrambling to meet the company’s slowly rising standards.
The problem, though, is getting beyond individual acts of generosity or change to a consistent, industry-wide overhaul.
Both Loblaw and its British sister company Primark have now signed a legally binding Accord on Fire and Building Safety in Bangladesh that calls for brands to disclose the names of their suppliers and to “ensure that sufficient funds are available to pay for renovations and other safety improvements” at factories. A number of other brands – including Wal-Mart, Gap, Hudson’s Bay and Canadian Tire – designed a separate accord, the Alliance for Bangladesh Worker Safety, that promises many of the same things but makes compliance voluntary.
A general lack of industry progress, however, leaves Mr. Weston “very frustrated and disappointed with the pace at which the apparel industry is moving on this,” he says.
Meanwhile, consumers keep buying Joe Fresh – a sweet relief for Loblaw after years of struggling to find the right balance of food and non-food items – and the line has now rolled out at J.C. Penney, the U.S. department store chain.
Which is exactly what victims like Raehana Akhter want.
In the search for solutions, one point everybody in Bangladesh agrees on is that a boycott by Western consumers of the “Made in Bangladesh” label would have catastrophic consequences for a country just starting to climb the development hill.
“If they don’t buy our clothes, what will we eat? What other jobs do we have in the villages?” Ms. Akhter asks.
As she is interviewed, the young woman lies in a bed at the Centre for the Rehabilitation of the Paralyzed, a Bangladeshi non-government organization that has assisted dozens of the most badly injured Rana Plaza survivors.
Despite the efforts of her rescuer, Ms. Akhter had her left leg amputated below the knee while she was in her coma, which lasted eight days.
In July, though, she was already hobbling about on crutches and making plans to get on with her life as soon as the specialists at the centre fit her with a prosthetic leg.
She’s heard nothing about the promises Loblaw has made to directly compensate the Rana Plaza victims. But she says that she would use any money she receives to get out of the garment industry and start her own business.
A BRIEF HISTORY OF THE T-SHIRT
The year 2013 is something of a centenary for the T-shirt. In 1913, the U.S. States Navy ordered large quantities of what up to that point had been an unassuming piece of men’s underwear and gave it to sailors to wear beneath their uniforms. The “bachelor undershirt,” as one manufacturer called it, had been invented in the late 19th century and geared toward single men who, lacking sewing skills, needed low-maintenance clothing. The collar-less shirt’s simple, light cotton design meant it could be pulled over the head and still keep its shape, and there were no buttons to break or lose.
In 1913, the undershirt was considered something akin to lingerie and was meant to be kept out of sight. But sailors started doing their chores in the shirts, and the garments became particularly useful for men working in the close confines of a submarine and for American troops toiling in tropical climates. The shirts quickly lost their scandalous reputation; In 1920, F. Scott Fitzgerald became the first person to refer to them as T-shirts in print, according to the Oxford English Dictionary, when he included the term in his debut novel, This Side of Paradise.
By the end of the Second World War, the sight of man or boy wearing a T-shirt as outwear was perfectly normal. It was Marlon Brando, however, who turned T-shirts into a fashion statement when he wore one in the 1951 film A Streetcar Named Desire; sales jumped dramatically after the film’s release.
A decade later, tees morphed again, this time into personal statements with printed slogans and images (and frequently, the logos of popular rock bands). In the 1970s, the British punk movement led by the Sex Pistols introduced the self-consciously ripped T-shirt. The 1980s television show Miami Vice popularized T-shirts as high-fashion items when the lead characters paired them with suit jackets. And the 1990s brought “ironic” T-shirts, with quotes from television shows and odd visual puns, to popularity.
Estimates for the number of T-shirts manufactured annually around the world vary from two to four billion. Most are produced in the world’s least-developed countries.
Sources: The New York Times, Wikipedia, Los Angeles Times, Jockey, ZooZoo2 T-shirts.
BANGLADESH’S MOTHER THERESA
As soon as she realized the scope of the disaster at Rana Plaza, Valerie Taylor knew her team would need to start making legs. A lot more legs.
For more than three decades, Ms. Taylor, a 69-year-old British-born physiotherapist, has been a heroine to Bangladeshis – although little known abroad, she’s often compared here to Mother Theresa – for her work with those maimed and paralyzed by the country’s uncountable factory disasters and road accidents. Ms. Taylor established the Centre for the Rehabilitation of the Paralyzed in 1979, the country’s only hospital specializing in spinal cord injuries and replacement limbs, and has kept it running ever since, largely through the sheer force of her own will.
CRP’s main campus is in Savar, an industrial suburb of the Bangladeshi capital Dhaka, making it one of the closest medical facilities when Rana Plaza collapsed in April. A CRP ambulance was dispatched to the scene. Six months later, the centre is still helping some of the most badly injured as they try to adjust to life with partial paralysis, or amputated limbs.
“Yes, it’s been trying, yes we’re overburdened. But we decided from the start that this is such a tragedy, we must do this,” the eternally optimistic Ms. Taylor says. As the number of injuries climbed, CRP’s cafeteria was converted into a hospital ward crammed with beds for the new arrivals.
“In Bangladesh, there’s always room for one more,” she explains. with a smile. Just look at the people sitting on the top of the trains when the seats are all full.”
Ms. Taylor’s cheerful personality – and her insistence that even paralysis or the amputation of a limb shouldn’t keep patients from resuming normal lives – bubbles through the sprawling CRP complex. There’s a court for wheelchair basketball, and an art room where amputee painters hold their brushes between their toes or in their teeth. There’s a mock village in one corner of the campus, where patients are moved to practice living on their own in the last few weeks before their release.
Two dozen Rana Plaza survivors have been fitted with CRP’s made-in-Bangladesh prosthetic legs since the disaster, while dozens more have received CRP’s specially designed wheelchairs, which are made from rickshaw parts, making them less expensive – and easier to repair locally – than foreign models.
Ms. Taylor prides herself on CRP’s success stories. Eighteen years before Rana Plaza, a nine-year-old girl named Parveen Akhter threw herself off the roof of a nine-storey building to escape another garment factory fire. She arrived at CRP with a mangled spine, paralyzed from the waist down.
Today, a recently married Ms. Akhter works at CRP helping new patients get adjusted, as well as sewing cushion covers for the centre’s benches and wheelchairs. “Valerie Taylor is more than a mother to us,” Ms. Akhter says. “She never got married. She made a lot of sacrifices for us. She’s incomparable.”
Follow us on Twitter:,
Companies & investments Mentioned In This Article (1)
L-T 47.66 0.021 % 349,465