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Retailers chose cost over safety in Bangladesh factories

About a year-and-a-half before a fire at a clothing factory in Bangladesh killed 112 people in November, executives from Wal-Mart, Gap and other big retailers met nearby to discuss ways to prevent the unsafe working conditions that have made such tragedies common.

Representatives from a dozen of the world's largest retailers and fashion labels gathered with labor groups and local officials in April 2011 at the three-day meeting held in the headquarters of the Bangladesh Garment Manufacturers & Exporters Association in Dhaka, the capital. They were considering a contract that would govern fire safety inspections at thousands of Bangladeshi factories making clothes Americans covet.

Under the terms of the agreement, each company would be required to publicly report fire hazards at factories, pay factory owners more to make repairs and provide at least $500,000 over two years for the effort. They would also sign a legally binding agreement that would make them liable when there's a factory fire.

On the second day, Sridevi Kalavakolanu, director of ethical sourcing for Wal-Mart Stores Inc., spoke up. "In most cases very extensive and costly modifications would need to be undertaken to some factories," Kalavakolanu was quoted as saying in the minutes of the meeting obtained by the Associated Press. "It is not financially feasible … to make such investments."

The statement from the world's largest retailer, with $447 billion in annual revenue, set the tone for the rest of the meeting, which ended without a single company agreeing to the plan.

The retailers' meeting and its aftermath highlighted a central issue for the $1 trillion dollar global clothing industry: What role retailers play — and should play — in making working conditions safer at the factories that manufacture their apparel.

The retail industry hasn't released estimates on how much it would cost to upgrade Bangladeshi factories to Western standards. But one advocacy group, The Worker Rights Consortium, puts the cost at about $1.5 billion to $3 billion in the next five years. That's about 3 percent of the $95 billion expected to be spent on clothes manufacturing in the country during that time. It also amounts to about 10 cents added onto the cost of a T-shirt.

Retailers chose cost over safety in Bangladesh factories 12/11/12 [Last modified: Tuesday, December 11, 2012 10:39pm]
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