KARACHI, Pakistan – The century-old Central Jail here, a gritty repository of criminals, jihadists and sectarian killers, has a reputation for overcrowding and prisoner riots. But for Arshad and Shahid Bhaila, the industrialist brothers whose factory burned to the ground in September, killing at least 262 workers, there are some comforts.
As Category B prisoners, the Bhailas have a private room, a bathroom, a television and personally cooked meals. Those perks, to be sure, may prove only a short-lived solace once their trial begins next month and they face a possible death sentence on murder charges.
Yet their lawyer, in mounting a defense, is seeking to shelter the Bhailas behind a far greater source of comfort: an apparel industry certification system that gave their factory, Ali Enterprises, a clean bill of health just three weeks before the horrific blaze.
Despite survivors’ accounts of locked emergency exits and barred windows that prevented workers from leaping to safety, the Bhailas’ lawyer says their SA8000 certificate, issued under the auspices of Social Accountability International, a respected nonprofit organization based in New York, proves they were running a model business.
“This was a state-of-the-art factory that met international standards,” said the lawyer, Amer Raza Naqvi. “The SA8000 is accepted all over the world. They have very strict rules before issuing any certificate.”
But after the Karachi fire and the more recent factory inferno in Bangladesh that killed 112 people, that contention raises a crucial question: Does industry-backed “social auditing,” which purports to safeguard the lives and working conditions of some of the world’s poorest workers, really work?
For the past 15 years, retail giants like Walmart and Carrefour have helped create and champion numerous factory inspection systems. In embracing such monitoring, the companies are motivated by genuine concern for the workers at the bottom of their supply chain, but also by their own bottom line, worried that consumers might shun products made at factories where there are abuses.
These elaborate systems look good on paper, but the actual work is often delegated to largely unsupervised subcontractors eager to drum up more business. The company that certified Ali Enterprises, as in many other cases, never visited the factory, handing off the job to a local inspector it dealt with by telephone or at meetings outside Pakistan.
For labor groups, academics and some industry insiders, the recent fires confirm longstanding fears that the voluntary system is weak, opaque and inherently flawed.
“Right from the outset, there has been concern,” said Philip J. Jennings, general secretary of UNI Global Union, a grouping of 900 labor unions that recently quit the board of Social Accountability International to protest what he said was the certification system’s overall ineffectiveness in improving factory conditions and workers’ lives.
Certification systems like the SA8000, said Khalid Nadvi, an expert on monitoring at the University of Manchester in England, are “very patchy and in many cases totally ineffective.”
“Factories often know when the inspectors are coming,” Mr. Nadvi added. “You have workers being coached what to say. There may be two sets of books.”
The certificate that Ali Enterprises boasts about is considered the most prestigious in the industry. It is the creation of Alice Tepper Marlin, a Wellesley College graduate and former Wall Street analyst who, after starting an activist group in 1969 to push for greater corporate responsibility, eventually settled on trying to make the world’s sweatshops less horrid.
Founded in 1997, Social Accountability International receives fees and membership payments from industry giants like Gap, Gucci and H&M, but it also obtains money from labor unions, governments, foundations and nongovernment organizations. It created the SA8000 to certify factories that meet basic requirements in eight areas, including health and safety, wages, working hours and child labor.
Today, Ms. Tepper Marlin’s modest-sized organization oversees a sprawling, often problematic empire. Its SA8000 stamp of approval has been given to 3,083 factories in 66 countries. Ms. Tepper Marlin said the catastrophic Ali Enterprises fire shook her deeply. After missing some crucial warning flags until it was too late, she and her organization are now rethinking their whole monitoring system.
Nonetheless, she still vigorously defends that system, saying that it has been vital to setting and safeguarding baseline standards for supply-chain workers in poor countries, particularly those with corruption-prone governments and weak unions.
“We think we do make a difference,” Ms. Tepper Marlin said. “We’re just trying to help get a culture of compliance.”
The various disasters have given fresh oxygen to critics who say industry-led certification should be abolished across the board and replaced with a more accountable system that requires the retailing giants – and their Western consumers – to help pay for needed factory improvements, even if that means higher prices for clothing.
“These private codes have become a commodity that is bought and sold, but not rigorously enforced,” Mr. Nadvi said. “We need to move beyond them.”
Outsourcing the Inspections
There was evidence that Ali Enterprises was flawed well before September’s fire. Abdulrauf Shaikh, a longtime inspector, examined the factory three times, in 2010, 2011 and again this July, just two months before the fire. Each time he found a locked fire exit – as in the fatal 1911 Triangle shirtwaist factory fire in New York – minimum wage violations and other serious problems.
Mr. Shaikh was there on behalf of a European apparel company that was thinking of using the factory. When Mr. Shaikh confronted the Bhaila brothers over these problems, he recalled, “They said: ‘We are SA8000-certified. Whether you pass us or fail us, that’s your issue. We don’t care.’ ”
Social Accountability International does not inspect the factories itself. It has a compliance affiliate that licenses firms to do the actual work. One such firm is RINA, an Italian corporation founded in 1861 to inspect ships. In Pakistan, the process was further subcontracted: RINA’s local operations are run by RI&CA, which inspected Ali Enterprises last summer.
That Pakistani firm has a controversial reputation largely because of its unusually high rate of approvals, doing inspections that led to 118 SA8000 certificates between 2007 and 2012. In contrast, a larger auditing firm, Bureau Veritas, awarded 46 certificates in Pakistan over a period twice as long.
RI&CA’s flurry of accreditations worried a team of English monitors led by Vic Thorpe and Stirling Smith, who often went to Pakistan to check on inspectors’ operations. “It seems very fishy,” Mr. Smith said. “They’ve certified so many factories compared to the other players, so you wonder.”
Mr. Thorpe said he conveyed his concerns to Social Accountability International. Its compliance arm did step up its oversight, but no further action was taken. Several monitors in Pakistan questioned why the local firm was able to do so many inspections for so many years with seemingly little oversight.
But it was not entirely surprising. Industry experts say that in the battle for market share, profit-making inspection firms are often tempted to be less rigorous because that makes them more attractive to apparel manufacturers eager for certification.
RINA’s certification business in Pakistan was bolstered by its partner’s embrace of a controversial subsidy program. Since 2007, the Commerce Ministry has offered companies up to 400,000 rupees, or $4,100, toward the cost of an SA8000 inspection as part of a drive to promote the clothing industry.
But the program has a twist. The entire subsidy is payable only if the factory is awarded certification. This creates a conflict of interest that skews the process in favor of approval, critics say.
Ms. Tepper Marlin said these subsidies concerned her group enough that in 2011 it wrote to RINA and the two other firms accredited to perform SA8000 inspections in Pakistan, advising them to stop accepting the subsidies that the factories pass on to them unless they could demonstrate their impartiality.
Two firms stopped taking the government money, she said, but RINA’s Pakistani partner continued.
Despite these concerns and others, industry officials said RINA never sent employees to Karachi, instead conducting checkup meetings in the Middle East or by telephone. “Did they even bother to visit the country?” asked Zulfiqar Shah of the Pakistan Institute of Labor Education and Research.
In a statement, RINA said it had conducted “periodic internal audits and meetings” with Adnan ul-Hasan, RI&CA’s owner. But the firm declined to specify where and when those meetings had taken place.
Certification, Then a Fire
Mr. Hasan’s company inspected Ali Enterprises, a large plant with 2,000 workers in northern Karachi, between June 25 and July 5, records show. On Aug. 20 RINA awarded Ali Enterprises an SA8000 certificate.
Three weeks later, around 6 p.m., fire erupted in the factory’s storage department, among giant rolls of denim. At the time, its production was largely dedicated to making cheap jeans for KiK, a German retailer.
The blaze spread quickly, engulfing the main building where about 660 people were working. On the ground floor, some workers were burned alive. On the second floor, its windows barred, many suffocated from the smoke. In the basement, workers were trapped as hot water flowed from firefighters’ hoses.
“They boiled alive,” said Mohiuddin Aziz Yousuf, a brother-in-law of Arshad Bhaila, one of the factory’s owners, as he gave a tour of the burned-out factory.
RINA has refused to release the inspection report that its Pakistani partner prepared in July, citing confidentiality requirements. But it is clear there were serious problems at the factory.
In interviews, workers said they worked 60 or more hours a week, sometimes in 24-hour shifts. Although most earned the statutory minimum wage of $83 a month, few satisfied the SA8000 requirement of a “living wage” – one that met a family’s basic needs.
Despite management’s claims of extensive safety training, there was much evidence to the contrary.
Muhammad Ismail, a stitching supervisor at Ali Enterprises for 18 months, said he had never participated in a fire drill or received safety training. Managers put grilles on the upper-floor windows to prevent theft. He was told that 700 pairs of jeans had once been tossed out an upstairs window.
Before outside inspectors visited, Mr. Ismail said, managers erected first-aid boxes and had the plant cleaned. But once the visitors left, he said, the medical kits were stored away.
“They said the workers might steal things from the boxes,” he said.
When Mr. Shaikh, the inspector, visited in July, managers presented him with forms supposedly signed by employees saying that they had received safety and evacuation training. But when he interviewed the employees, they told him they had never received such training or signed the forms.
Mr. Shaikh said he was shocked to learn that the factory was about to be awarded SA8000 certification.
Soul-Searching After Disaster
As the Pakistani police investigate one of the deadliest factory fires in history, the Western certifying bodies are engaged in intensive soul-searching.
Social Accountability International and its compliance arm have begun an extensive review of its work with RINA. On Friday, they announced that RINA would no longer issue SA8000 certificates in Pakistan.
RINA, in a statement, said it had suspended its relationship with its Pakistani affiliate, and was conducting spot checks on factories that had been certified in its name. The group, however, is resisting calls to rescind all its SA8000 certificates in Pakistan.
RI&CA, meanwhile, has sought to distance itself from the fire. In a telephone interview, the Pakistani owner denied he even did apparel monitoring. “We didn’t do Ali Enterprises,” Mr. Hasan said. “I’ve never even seen the factory.”
The police, RINA and lawyers for Ali Enterprises flatly contradicted that statement.
Extensive failings by the Pakistani state played major roles in the disaster. There was little enforcement of safety laws; labor unions, which experts say could provide a voice on working conditions, have been strangled for decades; the local fire department did not reach the factory until at least 75 minutes after the blaze erupted.
A government investigation into the blaze, hastily convened to quell public anger, has not yet released its findings.
In the monitoring business, one of the most contentious issues is confidentiality, and whether inspectors should be obliged to inform the public about poor or perilous conditions, like locked exits.
“There is an issue here of basic moral responsibility,” said Scott Nova, executive director of the Worker Rights Consortium, a monitoring group in Washington. “You have an obligation to make sure other people know.”
Avedis H. Seferian, chief executive of Worldwide Responsible Accredited Production, another certification program, said a public blacklisting might only make things worse, causing Western customers to shun the factories and workers to lose their jobs. (His group had also certified Ali Enterprises, but that approval lapsed in late 2011.)
“If your goal is to have a good factory,” he said, “you’re not achieving that by not giving them a chance to improve.”
Mr. Nadvi recommended that the voluntary monitoring system be replaced by a government-run system developed in consultation with industry and the International Labor Organization, a United Nations agency.
But Ms. Tepper Marlin warned that jettisoning certification programs could cause an exodus of apparel orders and jobs from Pakistan and Bangladesh.
“This type of trade and development has played an important role in bringing people out of poverty,” she said. “Do we really want to say that we should move away from it because there are some factories with problems?”
‘It Could Happen Again’
Today, the Ali Enterprises factory is a charred memorial to a national tragedy. A suffocating stench lingers over the deserted halls, now filled with soot, twisted metal and charred rolls of denim. Discarded plastic sandals, left by trapped factory workers, are piled near a door that was locked during the fire.
The exact death toll, originally estimated at 289, is in dispute. Court records confirmed 262 deaths. But families say 48 other people are missing, with many remains still not identified.
The Pakistani government and a wealthy industrialist have paid families $9,375 per death in compensation; KiK, the factory’s main customer, has agreed to pay an additional $1,930 per head.
Muhammad Siraj lost his 18-year-old son, Shah Nawaz, and 23-year-old daughter, Farzana. They worked in the stitching department, making $125 a month for long hours. “It wasn’t a lot,” Mr. Siraj said, “but it provided lentils and bread.”
Now all that remains are a pair of six-year-old photos; in one, Shah Nawaz sits shyly beside his sisters, peeking from behind a shoulder.
“I feel nothing against the factory owners,” said Mr. Siraj, a gently spoken scrap merchant. “They can’t give me my son back.”
The Pakistani police have brought fire-related charges against the Bhaila brothers, their elderly father, three factory guards and two managers. The brothers’ supporters claim the men have been subjected to “trial by media” and say the fire resulted from sabotage.
“These safety regimes are not meant to deal with sabotage or terrorist activity,” said Mr. Yousuf, the Bhaila brother-in-law. Police investigators said they had ruled out that theory.
Ms. Tepper Marlin’s group has ordered a special round of fire inspections at every Pakistani factory with SA8000 certification.
Still, there is deep skepticism about whether the wrenching tragedy will result in genuine improvements, even after all the inquiries.
“Two months down the road, what has changed?” asked Mr. Shah, the labor rights activist. “Nothing. It could happen again tomorrow.”
Declan Walsh reported from Karachi, and Steven Greenhouse from New York.
Source: NYTimes