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Bangladesh’s Deadly Building Collapse Renews Safety Woes

The collapse of a Bangladesh building that killed 182 people yesterday is prompting renewed calls for retailers and clothing companies to ensure the safety of workers in the Asian nation.

Loblaw Cos. (L)’ Joe Fresh and Associated British Foods Plc’s (ABF) Primark, which yesterday said that their suppliers made garments at the collapsed factory, both vowed to help improve working conditions in Bangladesh. Rescuers pulled 1,400 people alive since yesterday from mangled pieces of concrete, rods and bricks in an incident that injured at least 1,000 people.

The disaster is another black mark on Bangladesh’s industrial safety record, which made headlines after a fire at a plant producing garments for companies including Wal-Mart Stores Inc. (WMT) that killed at least 100 people in November. More than 700 garment workers have died since 2005 in Bangladesh, according to the International Labor Rights Forum, a Washington-based advocacy group.

“Labor rights groups around the world have been asking, indeed imploring, major retailers to address the grievous safety hazards in their Bangladesh factories and the response is always the same: vague promises and public relations dodges, while the pile of corpses grows ever higher,” Scott Nova, executive director of the Washington-based Worker Rights Consortium, said yesterday in a statement.

Joe Fresh, the clothing brand owned by Brampton, Ontario- based Loblaw, had a “small number” of items produced at the complex, Julija Hunter, a spokeswoman, said in an e-mailed statement.

Regular Audits

The company is “saddened” by the tragedy and will work with its vendor to see how it can help, she said. Loblaw has standards for suppliers to make sure that products are produced in a socially responsible manner and conducts regular audits to ensure compliance, Hunter said.

“We hope to hear more from the authorities about the status of this situation and we are committed to supporting them,” she said.

One of Primark’s suppliers occupied the building’s second floor, the company said in a statement. The budget fashion chain owned by London-based Associated British Foods said it was “shocked and saddened” by the accident and has worked with non-governmental organizations to help improve factory standards in Bangladesh.

Supply Chain

Wal-Mart, the world’s largest retailer, is investigating its supply chain to see if a factory in the building was producing for the company, Kevin Gardner, a spokesman for the Bentonville, Arkansas-based retailer, said yesterday in an e- mailed statement.

“We are sorry to learn of this tragic event,” Gardner said. “We remain committed and are actively engaged in promoting stronger safety measures, and that work continues.”

Mohammad Ali, whose 25-year-old son remains missing, said he heard from his son’s co-workers that they saw cracks on the wall of the building before it collapsed and refused to go to work. Some managers threatened not to pay their monthly salary if they don’t return to work.

Families of the workers were seen wailing for their loved ones while the others went from hospital to hospital in frantic searches for relatives. Injured workers were being carried on stretchers into a crowded hospital emergency room. Officers have handed over 128 bodies to relatives, according to Mohammad Asaduzzaman, who’s in charge of the Savar Model Police Station.

6,000 Employees

As many as 6,000 people were employed in the facilities housed in the building 24 kilometers (15 miles) northwest of the capital Dhaka, the Bdnews24.com website reported without citing anyone. A few shops and a bank also had an office in the area, Health Minister A.F.M. Ruhal Haque said in a briefing yesterday.

“It will take a lot of time to get a full picture of the devastation,” Nilufa Yasmin, a duty officer at the Bangladesh Fire Service and Civil Defence, said in a phone interview. “The top five floors of the building collapsed on top of each other, trapping many inside.”

Surging wages and inflation in China, the largest apparel supplier, have prompted retailers such as Wal-Mart and Sears Holdings Corp. (SHLD) to shift production to Bangladesh. In response, an $18 billion manufacturing industry has sprung up, marred by factories operated in buildings with poor electrical wiring, an insufficient number of exits and little fire-fighting equipment.

The collapsed building had developed cracks the previous day, prompting BRAC Bank Ltd. to order its employees to vacate the premises, said Zeeshan Kingshuk Huq, a spokesman.

“We evacuated our staff yesterday,” Huq said. “Other commercial units did not do the same.”

Safety Standards

About half of the Bangladesh’s garment factories don’t meet legally required work safety standards, and those that have improved working conditions have done so under pressure from Western apparel makers, said Kalpona Akter, executive director of the Bangladesh Center for Worker Solidarity, a non- governmental organization founded by two former garment child workers to promote safer factories.

Bangladesh’s labor law requires safety measures such as fire extinguishers and easily accessible exits at factories.

Workers-rights advocates are petitioning companies to sign a contractually enforceable memorandum that would require them to pay Bangladesh factories enough to cover costs of safety improvements.

So far, PVH Corp. (PVH), owner of the Tommy Hilfiger brand, and German retailer Tchibo are the only ones to sign the agreement, which also would require companies to provide accurate and regularly updated lists of their approved suppliers and subcontractors in Bangladesh. It won’t take effect until four major retailers sign on.

“These accidents are a huge reason why we’ve created the agreement,” Akter said. “It’s not just about fires, it’s about all factory conditions. This building has collapsed. There are many more buildings waiting to collapse.”

Textiles contribute more than 10 percent of Bangladesh’s gross domestic product and about 80 percent of the nation’s exports, mainly to the U.S. and the EU, according to the manufacturers’ association.

To contact the reporters on this story: Lindsey Rupp in New York at lrupp2@bloomberg.net; Arun Devnath in Dhaka at adevnath@bloomberg.net; Sarah Shannon in London at sshannon4@bloomberg.net

To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net; Robin Ajello at rajello@bloomberg.net

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