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The Globe and Mail

Bangladesh factory fire exposes faults in subcontracting

A firefighter inspects a burnt garment factory after a fire in the Bangladeshi town of Gazipur, 40 km (25 miles) north of Dhaka on October 9, 2013.


This week's deadly fire at a factory in Bangladesh underlines the complex web of subcontracting that Western apparel companies undertake to get their clothing made at low costs, leaving workers in unsafe conditions.

In Canada, retailers that have been tied to the fabric plant that went up in flames, leaving 10 dead, so far have stayed away from taking full responsibility. A spokeswoman for retail giant Wal-Mart Canada Corp. said its safety assurance process doesn't extend to a fabric mill such as this one. Grocer Loblaw Cos. Ltd., which owns the Joe Fresh fashion line, is still investigating the situation, but suggested the merchandise it bought from the plant came through what a spokeswoman called "unauthorized production."

The confusing line of responsibility highlights the tendency of apparel producers to subcontract work to manufacturers who subsequently farm it out to other factories to ensure faster and cheaper production. But affordable chic can come at a price: Retailers risk losing a measure of control of the supply chain, and safety conditions at the plants can suffer.

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Tuesday's tragedy at Aswad Composite Mills Ltd. – located in Gazipur, outside Dhaka – occurred despite the retailers having promised after previous Bangladesh garment-factory disasters that they would put in place a process to ensure that worker safety is paramount.

"Given the special safety situation in Bangladesh, we believe the government of Bangladesh and the industry should consider whether to extend factory safety programs to this next level of production," Wal-Mart Canada spokeswoman Susan Schutta said in an e-mail on Wednesday.

Department-store purveyor Hudson's Bay Co. stopped using the factory after April, said spokeswoman Tiffany Bourré, adding it consolidated production at another Bangladesh plant but without giving a reason. Shipping documents obtained by The Globe and Mail show that HBC's last delivery of goods from Aswad was on April 30. (These same documents show shipments to Loblaw up until June 17.)

The Bangladeshi government promised a cleanup of the industry after the horrific collapse on April 24 of the Rana Plaza, an eight-storey building outside Dhaka housing garment factories, including one making Joe Fresh clothing. That tragedy left 1,129 people dead.

After April's disaster, 90 leading brands, including Loblaw, signed a new safety agreement drafted by trade unions to allow greater scrutiny of factory operations. But major U.S.-owned merchants, such as Wal-Mart, refused to join, instead forming their own safety alliance that critics say doesn't have enough legal teeth.

Industrial mishaps are common in Bangladesh. Last November, a fire at the Tazreen garment factory on the outskirts of Dhaka killed 117 workers, the country's worst such blaze. It put a spotlight on unauthorized subcontracting of orders from Western companies, including Wal-Mart.

Scott Nova, executive director of advocacy group Worker Rights Consortium, said fabric factories such as the one involved in this week's fire are not covered by the new safety accord. He said it can be difficult to trace the fabric mills' relationship to retailers. "This can be a very confounding area to identify who is responsible."

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Safety standards at Bangladesh's 4,500 garment factories, where workers spend up to 12 hours a day for a monthly minimum wage of $38, are notoriously lax and fires are a persistent problem.

Advocacy groups and retailers have struggled to find effective ways of improving worker safety in Bangladesh, which is a prized apparel production centre because of its cheap labour.

Loblaw spokeswoman Julija Hunter said on Tuesday it hadn't placed orders with Aswad and doesn't tolerate its suppliers engaging in "unauthorized outsourcing. We have seen documents that suggest there may have been such unauthorized production and we are investigating."

Wal-Mart's Ms. Schutta said it has no "direct contractual relationship" with the factory in Tuesday's fire but "some of our suppliers source fabric from this mill," which isn't covered by the retailer's safety inspections.

On Wednesday, leading Western brands, including Swedish clothier H&M and French supermarket chain Carrefour, admitted their links to the latest factory fire. Firefighters battled through the night to douse the inferno at the Aswad factory, which broke out when most of its 3,000 employees had gone home. Workers said the blaze appeared to have been started by a malfunctioning knitting machine; the country's top inspector said safety problems had been raised last month. Police said most of the bodies found Wednesday after the flames were extinguished were too badly burned to be identified.

"This latest fire to affect the ready-made garment sector in Bangladesh reflects the sad and shocking truth that not enough is being done to address the safety and health of garment factory workers," Guy Ryer, director-general of the International Labour Organization, said in a statement.

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An AFP correspondent who picked through the still smouldering wreckage found work-order books containing names of clients in September including U.S. chain Gap; British retailer Next; Swedish fashion label H&M; Australia's Target; and France's Carrefour. H&M, Gap, Next and Carrefour said their clothes were not made in the factory, but admitted they placed orders with the owner, Palmal Industries, one of the country's largest garment groups. None of them had audited the burnt-out mill, which was a fabric supplier to other separate garment manufacturing units of Palmal.

Bangladesh's chief factory inspector Bashirur Rahman told AFP there were "some safety issues" at the Aswad factory. "Our inspectors inspected the factory on Sept. 25 and this month served a notice to the factory to rectify them," he said, without specifying the issues.

With a report from Agence France-Presse

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