‘Walmart vetoed bid to help RMG units’

Dhaka, Dec 6 (bdnews24.com) — Over a year-and-a-half before the deadly blaze at the Tazreen Fashions Ltd roasted 111 alive, Walmart had vetoed the effort to have global retailers pay more for apparel to help Bangladeshi factories improve their electrical and fire safety, reports in international media suggest.

It was in April 2011 when garment factory owners, global retailers, government officials and non-government organisations were brought together at a meeting to discuss a contractually enforceable memorandum that would require retailers to pay Bangladeshi factories prices high enough to cover the costs improving safety measures.

The meeting was held in Dhaka where Walmart was the first to say that paying the suppliers more to help them upgrade their facilities was too costly, and therefore, not feasible for the brand as it would involve about 4,500 garment units.

The New York Times, Bloomberg and The Wall Street Journal ran reports on minutes of the meeting exposing the world’s major apparel retailer’s role in providing others with the ground to snub the call for improving safety in factories.

The New York Times quoted Sridevi Kalavakolanu, a Walmart Director of Ethical Sourcing, from the minutes of the meeting.

“Sridevi Kalavakolanu…along with an official from another major apparel retailer noted that the proposed improvements in electrical and fire safety would involve as many as 4,500 factories and would be ‘in most cases’ a ‘very extensive and costly modification’.”

“It is not financially feasible for the brands to make such investments,” The New York Times quoted the minutes.

The Bloomberg quoted International Coordinator for the Clean Clothes Campaign Ineke Zeldenrust, who also attended the meeting, to report denial of the Walmart representative and the representative of the Gap Inc, another retailer, to share the cost of improving working condition in the factories.

The Bloomberg had its hand on the report folded into the minutes prepared by the duo.

“Specifically to the issue of any corrections on electrical and fire safety, we are talking about 4,500 factories, and in most cases very extensive and costly modifications would need to be undertaken to some factories,” they said in the document. “It is not financially feasible for the brands to make such investments.”

Contacted by the Bloomberg, Kevin Gardner, a Walmart spokesman, declined to discuss the Dhaka meeting or what he said there.

“We know that continued engagement is critical to ensure that reliable, proactive measures are in place to reduce the chance of factory fires,” he told the Bloomberg.

While replying to The New York Times, Gardner, however, said his company officials’ remarks in Bangladesh were ‘out of context’.

“Walmart has been advocating for improved fire safety with the Bangladeshi government, with industry groups and with suppliers,” he said, adding that the company has helped develop and establish programmes to increase fire prevention.

The New York Times also talked with the Clean Clothes Campaign’s Zeldenrust to know more about the meeting in discussion.

“Everyone recognized that fire safety was a serious problem and it was high time to act on it, and Walmart’s position had a very negative impact.” Zeldenrust said, “It gives manufacturers the excuse they’re looking for to say, ‘We’re not to blame’.”

Washington-based Worker Rights Consortium’s Executive Director Scott Nova also attended the meeting and was contacted by The New York Times.

According to Nova, upgrading the factories’ safety would cost a small fraction of what Walmart and other retailers pay for the clothing they import from Bangladesh each year.

But after Tazreen was swept through by a fire on Nov 24, Walmart said a supplier had “subcontracted work to this factory without authorisation and in direct violation of our policies.”

“We have terminated the relationship with that supplier,” said the global retailer in a statement without mentioning who the supplier was.

Documents photographed from the burned factory indicate that three suppliers — the International Direct Group, Success Apparel and Topson Downs — used Tazreen factory to make shirts, shorts and pajamas for Walmart.

After Walmart was shown some of the documents from the factory, Gardner replied to The New York Times in an e-mail. “As we’ve said, the Tazreen factory was de-authorised months ago,” he wrote. “We don’t comment on specific supplier relationships.”

The documents indicate that Success Apparel often worked through Simco, a Bangladeshi garment maker, reports The New York Times.

Nova of the Worker Rights Consortium questioned Walmart’s statements given after the fire.

“It was not a single rogue supplier as Walmart has claimed — there were several different US suppliers working for Walmart in that factory,” Nova told The New York Times. “It stretches credulity to think that Walmart, famous for its tight control over its global supply chain, didn’t know about this.”

According to Gardner, outside auditors had periodically inspected Tazreen on Walmart’s behalf. A May 2011 audit gave the factory an ‘orange’ rating, meaning that there were ‘higher-risk violations’ and that it would be re-audited within six months. If a factory gets three orange ratings over two years, it loses Walmart’s approval.

A follow-up audit in August 2011 for Walmart gave Tazreen an improved ‘yellow’ rating, meaning ‘medium-risk violations’.

The Wall Street Journal report said in October last week Walmart placed an order with garment-maker Simco Bangladesh to produce 300,000 girls’ shorts for shipment in early December.

Quoting an unnamed senior Simco executive, the Journal said it was Simco who subcontracted the work to Tazreen.

The executive told the Journal that it was all due to a crush of work and tight deadlines.

The Simco executive said the factory couldn’t complete Walmart’s order because 380 workers did not return to join work at his factory after the leave of Eid-ul-Azha.

Tuba Group, the parent organisation of Tazreen, accepted the order, and in early November, Simco signed an agreement to transfer the fabric it had imported duty-free to Tuba Garments, a Tuba Group unit, reported the Journal.

The journal, however, could not reach Tuba Group’s owner and Managing Director Delwar Hossain.

Simco has been making clothes for Walmart for more than a decade and sells 70 percent of its production to the company.

According to the Simco executive, they believed this was acceptable because some of Tuba Group’s factories had been approved to make clothes for Walmart.

The Journal quoted Siddiqur Rahman, Vice President of Bangladesh Garment Manufacturers and Exporters Association, who said Walmart’s supplier had placed orders totalling 2.4 million pairs of shorts with at least 10 factories.

The decision by Walmart to end its relationship with the supplier, effectively cancelling the orders, could cause losses of up to $7 million and put 20,000 workers out of jobs, Rahman told the Journal.

The Wall Street Journal also talked with a Bangladeshi government official to learn more about the issue.

“The buyers write to us to improve working conditions. We asked them to raise prices by 25 cents per clothing unit that would go to workers’ welfare. They refused, citing the financial downturn in their countries,” it quoted Mikail Shiper, a senior official in Bangladesh’s Ministry of Labor and Employment.

Source: Bd News24

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