As Firms Line Up on Factories, Wal-Mart Plans Solo Effort

By STEVEN GREENHOUSE

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As American retailers face mounting pressure to join a landmark plan to improve factory safety in Bangladesh, newly found documents indicate that apparel had been produced for Wal-Mart at one of the operations in the factory building that collapsed last month, killing more than 1,100 workers.

The Bangladesh Center for Worker Solidarity has provided The New York Times with photos of several documents not disputed by Wal-Mart that were recovered in the building’s rubble, showing that a Wal-Mart contractor from Canada had produced jeans last year at the Ether Tex factory, which had been situated on the fifth floor of the collapsed Rana Plaza building.

While both the contractor and Wal-Mart denied any knowledge of the production orders there, Wal-Mart on Tuesday announced that it would put in place new safety measures at the factories it was using in Bangladesh.

Saying it was unwilling to sign on to the broad safety plan embraced by more than a dozen European companies this week, Wal-Mart said its factory monitors would “conduct in-depth safety inspections at 100 percent” of the 279 factories it uses in Bangladesh and publicize the results on its Web site.

Photo of a production order for jeans to be sold at Walmart that the Bangladesh Center for Worker Solidarity said it found in the rubble after the Rana Plaza building collapse in Bangladesh.

Bangladesh Center for Worker Solidarity

Wal-Mart promised to stop production immediately at factories if urgent safety problems were uncovered and to notify factory owners and government authorities of improvements. But the company, the world’s largest retailer, stopped short of committing to help underwrite the improvements — one of the crucial aspects of the Bangladesh safety agreement adopted by European companies.

On Tuesday, Carrefour, the world’s second largest retailer, Benetton, Marks & Spencer and El Corte Inglés, the Spanish department store chain, joined major retailers like H&M and Inditex, the parent of Zara, in signing on to the safety agreement. The plan requires companies to have rigorous independent inspections and to help pay for fire safety upgrades, like adding fire escapes, which many factories still lack.

But Wal-Mart and numerous other American retailers and apparel companies have sought to maintain a distance from the April 24 building collapse, and have balked at the worker safety agreement urged by consumer and labor groups.

Wal-Mart maintained on Tuesday that it had no involvement at the Rana Plaza building, playing down the newly discovered documents.

One document, dated May 12, 2012, that was found in the rubble detailed a purchase order by a Canadian company, Fame Jeans, for “dark blue wash,” “skinny fit” jeans to be delivered to Wal-Mart in the fall of 2012. Another document, dated April 27, 2012, discussed pricing for five styles of jeans, with the prices ranging from $3.41 to $4.50 a pair.

But Wal-Mart emphasized that the documents dated back a year. “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,” said Kevin Gardner, a Wal-Mart spokesman. He declined to say on Tuesday whether the Ether Tex factory, as well as the Fame Jeans order there, were authorized.

After The Times questioned Wal-Mart about the documents on Tuesday, Alen Brandman, chief executive of Fame Jeans, said in an interview, “It’s very clear that Wal-Mart did not authorize me in any capacity to work within this factory.” He blamed a “rogue employee” for the order, who had decided to use the factory without Mr. Brandman’s knowledge.

He said after that order “no other product came out” of that factory “for us or for Wal-Mart.”

After a fire last November at another Bangladesh garment factory that killed 112 workers, numerous documents showed that six suppliers had clothes made there for Wal-Mart in previous months. Wal-Mart said it had deauthorized the factory because of violations and had terminated its relationship with the suppliers that continued using the factory after it was deauthorized.

Judy Gearhart, executive director of the International Labor Rights Forum, an advocacy group in Washington, faulted Wal-Mart for again trying to distance itself from the building collapse just as it sought to do after the November fire. “It’s another example of Wal-Mart’s lack of ability to track the specifics of its supply chain,” she said.

At the time of the building collapse, Wal-Mart was listed as a customer on Ether Tex’s Web site, another link that advocacy groups were using to try to pressure the retailer, Gap, Target and other American companies to sign onto the safety plan. The only non-European companies to sign are PVH, the parent company of Calvin Klein and Tommy Hilfiger, and Loblaw of Canada.

By far, Gap has been the most vocal company opposed to the plan, expressing concerns that overzealous American lawyers could seize on the agreement to sue American companies on behalf of aggrieved factory workers in Bangladesh — perhaps in the event of a factory fire. Gap said it supported much of the plan, but it proposed changes that would greatly limit any legal liability for a company that violated the plan.

Under Gap’s proposal, if a retailer were found to have violated the agreement, the only remedy would generally be public expulsion from the factory safety plan.

“The U.S. is quite litigious,” said Bill Chandler, a Gap spokesman. “We put forward specific proposals that we thought would bring other American retailers into the fold. We thought it would be a step forward and would turn it into a much more global agreement.”

Consumer and labor groups said Gap’s concerns about litigation were overblown. They complained that Gap’s stance against the agreement had helped to dissuade other American companies from signing.

“Gap’s demand is that the agreement be made unenforceable — and therefore meaningless,” said Scott Nova, executive director of the Worker Rights Consortium, a group sponsored by 175 colleges and universities. “What Gap wants is the right to renege on its commitments when it wishes.”

Some advocates say the European retailers signed the joint accord more readily than the Americans because Europe accounts for 60 percent of Bangladesh apparel exports and the United States one-fourth.

Wal-Mart also expressed concerns about the joint Bangladesh safety plan, saying it “introduces requirements, including governance and dispute resolution mechanisms, on supply chain matters that are appropriately left to retailers, suppliers and government, and are unnecessary to achieve fire and safety goals.”

Wal-Mart added that its plan either meets or “exceeds” the group safety plan, and would get quicker results.

The retailer said its factory inspectors would examine electrical systems for any flaws — a major cause of factory fires in Bangladesh — and would review building design and permits to help avoid future collapses. Those inspections would include thermal circuit imaging of factories’ electrical systems to analyze for problems.

“Wal-Mart is committed to a global supply chain that first and foremost provides safe conditions for workers,” said Rajan Kamalanathan, vice president of ethical sourcing for Wal-Mart. “Wal-Mart is focusing directly on the most urgent issue, and that’s worker safety. We invite others to join us in this effort.”

Wal-Mart praised the Bangladeshi government for closing 18 factories that had safety violations. The company said that based on its information none of those factories were making authorized apparel for Wal-Mart, although three of those factories were owned by the Nassa Group, which claims Wal-Mart and Sears as customers and is Bangladesh’s largest exporter.

Mr. Nova voiced skepticism that Wal-Mart’s initiative would significantly improve worker safety. “It is a unilateral initiative that’s nonbinding and unenforceable, and it’s unclear how much transparency there will be,” he said. “If all of this stuff happens, there’s substance, but there’s no basis to believe it will all happen.”

Source: NYTimes