Bangladesh Death Toll From Collapsed Building Exceeds 500

Photographer: Munir uz Zaman/AFP via Getty Images

Relatives react after identifying the body of a family member one killed in last week's building collapse in Savar, on the outskirts of Dhaka, on May 3, 2013. Close

Relatives react after identifying the body of a family member one killed in last week's... Read More

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Photographer: Munir uz Zaman/AFP via Getty Images

Relatives react after identifying the body of a family member one killed in last week's building collapse in Savar, on the outskirts of Dhaka, on May 3, 2013.

The death toll for Bangladesh’s worst industrial disaster climbed to 511 as the army continued to clear out debris at a garment-factory building that collapsed on April 24.

Police yesterday arrested Abdur Razzaque Khan, an engineer who worked as a consultant to Sohel Rana, the 38-year-old owner of the collapsed building. The government also suspended Savar Mayor Muhammad Refatullah.

Bangladesh’s garment factories face increased scrutiny after last month’s building collapse and a November fire that claimed 112 lives. Western retailers and labor activists have been wrangling over a two-year-old memorandum aimed at improving safety in the South Asian country, which supplies cheap clothes to stores around the world.

Wal-Mart Stores Inc. (WMT), J.C. Penney Co. (JCP) and other companies began discussing the agreement in April 2011. Walt Disney Co. (DIS), the world’s largest entertainment company, removed Bangladesh in March from a list of countries where partners can produce clothing and merchandise, according to a letter to licensees released yesterday.

Savar Mayor Refatullah has been suspended for “irregularities in approving the design” of the building, the local government ministry said in a notice. He has also been charged with “negligence and failure to take proper action” after cracks opened in the building, according to the notice.

Manufacturing Shift

After the cracks were found on April 23, workers were forced to return to work the next day, being told that it was safe as engineers checked the building, said Mokhlesur Rahman, director general of the Rapid Action Battalion, a law enforcement unit.

Rana and executives of four apparel makers housed in the structure in Savar, 24 kilometers (15 miles) northwest of Dhaka, have also been arrested and their assets seized. Rana’s wife and father are also in police custody.

Surging wages and inflation in China (CNGDPYOY), the largest apparel supplier, have prompted retailers to shift production to Bangladesh. The manufacturing industry that has sprung up in response has been marred by factories operated in buildings with poor electrical wiring, an insufficient number of exits and little firefighting equipment.

Western retailers and international labor activists met earlier this week in Germany to discuss the Bangladesh safety memorandum. The contractually enforceable document, which would require companies to pay suppliers more so factory owners can afford safety upgrades, was at the center of discussions in Frankfurt on April 29.

10 Cents

Companies including Bentonville, Arkansas-based Wal-Mart and Plano, Texas-based J.C. Penney attended the Frankfurt meeting, which was scheduled before Rana Plaza collapsed. The participants set a May 15 deadline to draft an agreement and decide whether to accept the terms.

The global garment industry would have to spend about $3 billion over five years to bring safety standards at Bangladesh apparel factories to Western standards, according to an analysis by the Worker Rights Consortium. Upgrading the country’s approximately 4,500 factories would cost the garment industry about 10 cents per garment, the Washington-based labor monitoring group said.

The annual cost would be $600 million, or about 3 percent of the $19 billion the Bangladesh Manufacturers & Exporters Association says Western companies spend annually on manufacturing in Bangladesh.

To contact the reporter on this story: Arun Devnath in Dhaka at adevnath@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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