Bangladesh: US retailers may snub EU factory deal

Family members of Bangladeshi collapse victims march to demand justice. Picture: Getty
Family members of Bangladeshi collapse victims march to demand justice. Picture: Getty
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NORTH American retailers may create their own Bangladesh safety agreement, an alternative to a legally binding accord that mainly European retailers have signed, sources close to talks said last night.

Major American retailers, including Gap, declined to endorse the accord on Bangladesh building and fire safety backed by Europe’s two biggest fashion chains. The transatlantic divide may dilute garment industry reform efforts.

Gap said it was ready to sign an agreement already endorsed by European companies, including Italian clothing retailer Benetton, Marks & Spencer, Sweden’s H&M and Spain’s Inditex, which owns Zara, but first wanted a change in the way disputes are resolved in the courts.

Yesterday, Marks & Spencer, the Italian fashion brand Benetton and Spanish firm Mango became the latest global retailers to agree to sign a one-of-a-kind pact. The move comes after H&M, the Swedish fashion chain that is the largest clothing buyer in Bangladesh, said it would sign the same five-year legally binding factory safety contract.

Within hours, C&A, Tesco, Primark and Inditex followed.

The announcements come ahead of a deadline today, imposed by worker rights groups which said they would increase pressure on brands that did not sign the agreement.

But as of yesterday, the only major US company to announce its full support was PVH, whose brands include Calvin Klein.

A series of deadly incidents at factories, including a fire in November that killed 112 people,, has focused global attention on safety standards in Bangladesh’s booming garment industry, the world’s biggest exporter of clothing after China.

Asda owner Wal-Mart Stores Inc, the world’s biggest retailer, called on Bangladesh to shut a factory after its own inspections found safety problems.

Europe accounts for about 60 per cent of Bangladesh’s clothing exports, so even without participation from the US giants, the agreement may bring change in a country that has seen at least three deadly garment factory disasters in the span of six months.

Mohammad Atiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association, said the deal was a bit of good news in the “worst time for us”. He said: “We believe this decision will motivate other big buyers across the West to join hands with us.”

Li & Fung, which supplies dozens of major retailers, including Wal-Mart, said it was “continuing to look at” the European pact, but declined to give details. Bangladesh is second only to China in Li & Fung’s global supply chain. “We don’t think the answer is to move away from Bangladesh,” said Bruce Rockowitz, Li & Fung’s group president and chief executive, after a shareholder meeting in Hong Kong on Tuesday.

“The answer is actually to invest more and try to make safety better and work with the government on doing a better job on monitoring buildings.”

Wal-Mart did not say whether it planned to sign the accord. But on Monday it released an public statement, asking the government to halt production at Stitch Tone Apparels in Chitta-gong, Bangladesh.

Wal-Mart said it found “structural concerns” at a nearby factory that “appeared unstable and could cause a hazard” for workers making clothes for Wal-Mart at Stitch Tone. It also wanted another factory inspected.

Ledgers reveal huge mark-up on brand goods

Order dockets found in the rubble of a Dhaka garment factory where more than 1,100 workers died show just why it pays foreign stores to buy from Bangladesh: clothes made for as little as a tenth of what they sell for in the West.

Rana Plaza, which collapsed three weeks ago, supplied big names in global retail and documents plucked from its ruins bring into sharp focus the price of putting shirts on the backs of consumers. In one case, polo shirts of a brand sold in London for £30 were offered for sale from Rana Plaza for just £2.90.

It is no secret that manufacturing costs are a fraction of what the wearer eventually pays. But the mark-ups revealed by the Rana Plaza documents – of five to ten times from factory gate to store window – offer a precise insight into the relationship of one end of a global supply chain to the other.

Prayers sent up for souls of 1,127 victims of factory collapse

Thousands of mourners gathered yesterday at the wreckage of a Bangladeshi garment factory building to offer prayers for the 1,127 people who died in the structure’s collapse.

The Islamic prayer service was held a day after the army ended a nearly three-week, painstaking search for bodies among the rubble and turned control of the site over to the civilian government for a clean-up.

Recovery workers got a shocking boost on Friday when they pulled a 19-year-old seamstress alive from the wreckage. But most of their work entailed removing corpses that were so badly decomposed they could only be identified if their cellphone or work ID was found with them.

The last body was found on Sunday night.

The mourners raised cupped hands in prayer and asked for the salvation of those who lost their lives when the Rana Plaza building came crashing down on 24 April.


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