Wal-Mart won’t sign Bangladesh building safety agreement

May 14, 2013

Wal-Mart Stores said it won’t accept an agreement “at this time” to improve fire and building safety in Bangladesh that is supported by labor monitoring groups and was signed by several retailers this week.

Instead, in the wake of the deadly Rana Plaza building collapse, the world’s largest retailer announced that it would undertake public safety inspections at all of its suppliers’ authorized factories in Bangladesh. Labor groups say that measure falls short of what is necessary to ensure worker safety.

The reviews of all 279 supplier factories will be completed within six months, and the names and inspection results will be released to the public, the Arkansas-based company said Tuesday in a statement. Wal-Mart said it expects the costs of “appropriate remediation and ongoing safety investments to be appropriately reflected in its costs of goods purchased.”

Kevin Gardner, a company spokesman, declined to comment on how the costs of increased monitoring would affect prices paid by consumers.

Wal-Mart and other retailers have been discussing agreements on improving labor conditions in Bangladesh since the collapse of the Rana Plaza building late last month. The accident killed at least 1,127 people and followed a series of deadly fires in Bangladesh that had prompted activists to push Western retailers to take more responsibility for work conditions there.

“Preventing the kinds of tragedies that have recently taken place in Bangladesh will only happen if all stakeholders across the board set clear parameters and take action to drive real safety and compliance improvements,” said Rajan Kamalanathan, Wal-Mart’s vice president of ethical sourcing.

The company said it will evaluate electrical and fire-safety systems at the factories, review their compliance with local building standards and permits, and visually inspect buildings for signs of structural distress.

Documents provided by the Worker Rights Consortium show that merchandise bound for Wal-Mart was produced at Ether Tex, a factory located inside Rana Plaza. One purchase order shows “skinny fit” women’s and girls’ jeans were to be produced for the fall 2012 season.

“Our investigation of the Rana Plaza building site after the collapse revealed no evidence of authorized or unauthorized production at the time of the tragedy,” Gardner said in an e- mailed statement. “If we learn of any unauthorized production, we will take appropriate action based upon our zero-tolerance policy on unauthorized subcontracting.”

Wal-Mart’s announcement came one day before the deadline for retailers to decide whether to accept the Bangladesh fire safety agreement, which is supported by labor monitoring groups and signed by many companies, including Hennes & Mauritz and Inditex, Europe’s two largest clothing retailers. PVH, owner of the Tommy Hilfiger brand, said Monday that it would join the effort and pledged $2.5 million. Loblaw, whose Joe Fresh brand was produced in the collapsed building, committed to the safety accord in a statement this week.

The accord would require companies to pay suppliers more so that factory owners could afford to make safety upgrades. It would run for five years and be funded by the participants. The plan calls for a review of building regulations and enforcement, the development of a worker complaint process and a mechanism for employees to report risks.

— Bloomberg News

MIKE BLAKE

REUTERS

The clothing tag on a pair of jeans by Wal-Mart's brand Faded Glory, which is made in Bangladesh, is shown after purchase from a Walmart store in Encinitas, Calif., on Tuesday.

: Bangladesh rescuers find woman trapped in rubble of collapsed garment factory for 17 days; death toll soars past 1,000.

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