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Bangladesh tragedy forces retail rethink

Western giants review strategies as activists urge reform similar to Southeast Asia which has shed sweatshop image.

Last Modified: 03 May 2013 00:12
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Western retailers have rushed to rethink brand strategies and address public concerns in the wake of the Bangladesh building collapse tragedy.

Bodies were still being pulled on Thursday from the wreckage of last week's collapse, taking the number of confirmed dead to 443, with many more still missing.

The building's collapse has led to global concern about conditions in the factories that produce cheap, catwalk-inspired clothes for top global brands.

An online petition calling for retail giants to fully compensate families of the victims of the Rana Plaza building collapse and to sign a building safety agreement had reached 69,793 signatures by 12:30 GMT on Friday.

There was concern in Bangladesh as its textile factories reopened for business on Thursday after an eight-day closure that some Western firms were considering pulling out of the country's $20bn industry.

Reviews ordered

Companies with suppliers in Bangladesh are now conducting reviews and British giant Primark and Canadian retailer Loblow have promised to compensate families of garment workers killed after Rana Plaza building collapsed on April 24.

Gap, Carrefour and Walmart were reportedly among the retail giants to meet German government and non-government groups this week to try to negotiate a plan to ensure safety at garment factories in Bangladesh.

Miranda Kerr is the face of Mango, which says it had products in Rana Plaza but the supplier was not an official one [EPA] 

A private emergency meeting of Canadian retailers, including Loblaw, Sears Canada Inc and Wal-Mart Canada, was held on Monday to discuss how they would deal with the tragedy.

The Retail Council of Canada said on Tuesday it would develop new trade guidelines in response to the Bangladesh factory collapse.

The Walt Disney Company, ordered an end to the production of branded merchandise in Bangladesh in March, The New York Times reported on Thursday.

Disney has updated its list of Permitted Sourcing Countries which is determined by data from the World Bank’s Governance Indicators as the primary tool to assess relative country risk.

Disney said in a written statement on its website that the review resulted in it no longer permitting production of its products in 43 countries where it had previously been allowed "under very limited circumstances".

"This includes five countries where there may be current Disney-branded production: Bangladesh, Belarus, Ecuador, Pakistan, and Venezuela."

Industry reform needed

Retail commentators said that Bangladesh could learn from the burgeoning mass manufacturing industry in Southeast Asia, which has shed its "sweatshop" reputation.

Kalpona Akter of the Bangladesh Centre for Worker Solidarity told AFP that amid talk of consumer boycotts, Bangladesh needed to reform its industry before fashionistas wondered "if they should be wearing bloodstained dresses".

Communist Vietnam, which produces clothes for fashion industry giants Zara, Mango and H&M, has shown it is possible to have strong labour laws, fair wages and a healthy garment industry, said Tara Rangarajan, programme manager of the International Labour Organisation's Better Work project in Vietnam.

"It is not a race to the bottom here,"he said.

"Sweatshops are part of a short-term, immediate payback, low-cost strategy."

Improved conditions

Rangarajan said that Vietnam was trying to enforce and improve its laws.

Wages are about three times higher in Vietnam than in Bangladesh and conditions in factories have improved over the past decade.

This disaster is also a critical point where brands can be pushed to move forward

{Nayla Ajaltouni, {Collectif Ethique sur l'etiquette co-ordinator}

Workers say they are now treated with more respect by employers eager to retain trained staff. They receive perks such as free accommodation and meals as standard.

Garment exports, valued at $3.1bn in the first quarter of 2013, were up 18.3 percent year-on-year.

In contrast, Bangladesh has specialised in low-cost production and embraced the sweatshop model, said Nayla Ajaltouni, co-ordinator of the campaign group Collectif Ethique sur l'etiquette.

But she said that outrage over the recent building collapse could prove a turning point."The industry has grown very quickly, (which) is why we're seeing this concentration of chronic health and safety issues," she said.

Minimum wages were increased in Bangladesh in 2011 "not for philanthropic reasons but because protests were starting to disturb the supply chain".

"It is a bit cynical but this disaster is also a critical point where brands can be pushed to move forward by the media, by citizens," Ajaltouni said.

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