Rooftop Generators in Bangladesh Ingredient for Danger

May 13 (Bloomberg) -- Liz Dunn, senior research analyst at Macquarie Capital and Adam Davidson, co-host of "Planet Money," examine the cost to retailers of improved safety conditions for workers in Bangladesh and that state of the U.S. consumer supporting retail. They speak on Bloomberg Television's "Bloomberg Surveillance."

As Aleya Begum sewed pants for 11 hours each day, vibrations from a power generator shuddered across the roof of her Dhaka garment factory.

The machine cranking out electricity became her biggest fear after another Bangladeshi industrial complex collapsed last month to kill more than 1,000.

“Just after Rana Plaza collapsed we always feared the roofing of the building will come crashing down on us,” said Aleya, who earned about 6,800 taka ($87) with overtime each month.

Local government inspectors ordered her factory to close 15 days ago as Rana Plaza turned into the country’s worst industrial disaster. Officials found two generators together weighing five metric tons (5,000 kilograms), roughly the weight of an elephant, on the roof of her 50-year-old building which has ceiling cracks and iron bars exposed where concrete has fallen off.

Her workplace offers a glimpse into how large machines whirring in poorly constructed buildings are threatening Bangladesh’s $19 billion apparel industry and the lives of its workers. As Western retailers seek to improve safety in the South Asian nation that stocks their shelves with cheap apparel, they face infrastructure snarls that range from erratic electricity to unreliable constructions.

Photographer:Arun Devnath/Bloomberg

Aleya Begum’s building, pictured here, in Dhaka. Close

Aleya Begum’s building, pictured here, in Dhaka.

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Photographer:Arun Devnath/Bloomberg

Aleya Begum’s building, pictured here, in Dhaka.

Vibrating Buildings

“Only about 0.01 percent of the buildings in the country are well built and conform to the building code,” said Iftikhar Khan, who runs Medway Consultancy Services, a civil engineering and design firm that does work in Dhaka. “The government inspections are just a formality and there is no oversight into what really happens on the ground on construction sites.”

At the same time, there is an acute shortage of power supply in Dhaka, and some factories can run generators for six of the 12-hour workday, according to Kalpona Akter, executive director of the Bangladesh Center for Worker Solidarity, which promotes labor rights. Continual vibrations from generators inside a building can harm the structure.

“If the building itself is weak, the vibration stress from the generator can add up,” said Mehedi Ahmed Ansary, professor of civil engineering at the Bangladesh University of Engineering and Technology in Dhaka. “In the building code the provision is to always to put the generator on the ground floor, so it doesn’t create an extra load on top of the building.”

Earthquake Zone

Dhaka is in a high-risk earthquake zone, according to the United Nations Office for Disaster Risk Reduction, which says it urged the government last year to update its building code.

Photographer: Arun Devnath/Bloomberg

Aleya Begum’s building, pictured here, in Dhaka. Close

Aleya Begum’s building, pictured here, in Dhaka.

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Photographer: Arun Devnath/Bloomberg

Aleya Begum’s building, pictured here, in Dhaka.

At least 72,000 buildings in the city will collapse or suffer significant damage in the event of a magnitude 6 to 7 earthquake, based on an analysis by Bangladesh’s Comprehensive Disaster Management Programme, which gets funding from UNDP.

Many factories in the country operate out of buildings that are partly used for commercial purposes. Aleya’s building is located in bustling Karwan Bazar, a wholesale market area in the capital Dhaka. The ground floor is a catacomb of small shops, mostly selling electronic goods and household utensils. The building, owned by local government body Dhaka North City Corporation, has three levels including the ground floor.

Unsafe Facilities

On the first floor, people eat lunch at two restaurants, sitting on plastic chairs on a floor blackened from overuse. The factories for SAS Fashion Wear Ltd. and Topkind Apparel Ltd., where Aleya worked, are on the final level. The local city government has ordered both plants to close amid a push to shut down unsafe facilities after the Rana Plaza collapse.

“See, the owner tried to cover up the cracks with whitewash, but the cracks are still visible,” Aleya said, standing with about 100 other workers waiting to pick up their last salaries from the shuttered factories. As she spoke, sunlight streamed in through a whale-shaped hole on the side of the factory, where bricks and construction material had broken off.

Photographer: Arun Devnath/Bloomberg

A crack is seen on the side wall of Topkind Apparel Ltd. in Dhaka. Close

A crack is seen on the side wall of Topkind Apparel Ltd. in Dhaka.

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Photographer: Arun Devnath/Bloomberg

A crack is seen on the side wall of Topkind Apparel Ltd. in Dhaka.

Until it shut down about two weeks ago, Aleya’s factory was a cog in the wheel of the global fashion industry. It acted as a subcontractor, making the jackets, coats, and pants that end up on the shelves of Western retailers. Factories like Topkind have mushroomed across Bangladesh as retailers globally sought a new source of cheap clothing as wages surged in China.

Factory Shutdown

The big suppliers end up using subcontractors when they overbook or are running late on orders, said Viju Mehtani, managing director of Ambattur Clothing Ltd., an apparel exporter based in South India that produces clothes in Bangladesh.

“It’s an industry within an industry,” Mehtani said.

For Topkind, the factory shutdown is leading to a loss of 20 million taka, Managing Director M.A. Khokon said as he sat in a tinted glass-fronted room in the same building.

“I have invested in this factory all the money I had,” said Khokon, surrounded by the company’s other executives and a policeman who had been called in case the workers got unruly. “Now I have to move out of here.”

Poor quality of construction, weak enforcement of building codes and a tendency to recklessly add floors has meant that a very small percentage of structures in Bangladesh are actually safe, said Munaz Ahmed Noor, a civil engineering expert and pro-vice chancellor at the country’s National University.

‘Building Conversion’

“There is a lot of building conversion which happens in Bangladesh: hotels converted into hospitals, and malls into garment factories,” Noor said. “Most of the garment factories are like that; they were constructed either as malls or residential buildings.”

This practice of changing the use of buildings is risky because commercial towers are usually built to withstand lesser loads than industrial units, said Ansary of the Bangladesh University of Engineering and Technology.

Building construction is often left to a local mason who oversees a team of laborers at the site. The decisions made by the masons are usually based on cost and not on engineering considerations, Ansary said.

Owners of Rana Plaza, the building which collapsed April 24, had built three additional floors beyond the five that were originally approved. The first and second storeys of the building housed a bank and stores selling computer parts, electronic products and cosmetics. There were five apparel factories above.

Local Authority

Rana Plaza’s owner didn’t get permission from Dhaka’s development authority to erect the building, said Sheikh Abdul Mannan, a planning member of the authority. It instead got approval from the Savar Municipal Corp., a smaller local authority, which has different building standards, he said.

When it comes to adding floors many factory owners “don’t discuss with any engineers whether it needs additional support, whether the existing columns can support the extra load or not,” said Noor. “They are just extending the building, repeating the same structure.”

The Rana Plaza collapse likely occurred after one of the columns that bore most of the weight of the structure gave way, said Khan, the civil engineering consultant.

“When one column collapses, it shifts the load to the other columns and that has a domino effect,” said Khan.

International Brands

Some institutional investors are also beginning to express concern about the safety issue, including the Illinois State Board of Investment, which owns shares of Wal-Mart Stores Inc. (WMT) The Rana Plaza collapse followed a series of deadly fires in the country’s garment industry.

Companies from Wal-Mart to supplier Li & Fung Ltd. (494) have felt the fallout of the poor safety in Bangladesh factories. Last year, a blaze at Tazreen Fashion Ltd. that had been making clothes intended for both companies and others such as Sears Holdings Corp. (SHLD) killed more than 100 people.

Hennes & Mauritz AB (HMB) and Inditex SA (ITX), Europe’s two largest clothing retailers, were among companies that this week committed to a proposal enhancing fire and building safety.

The plan calls for existing building regulations and enforcement to be reviewed, the development of a worker complaint process and a mechanism for workers to report risks, according to PVH Corp. (PVH), which pledged $2.5 million to underwrite the program.

Wal-Mart, the world’s largest retailer, said it wouldn’t join the five-year group accord, which is supported by labor monitoring groups. Instead it will conduct in-depth safety inspections at all of its suppliers’ factories in Bangladesh. Reviews of all 279 supplier factories will be completed within six months, and the names and inspection results will be publicly released, the company said.

Industrial Disasters

The Bentonville, Arkansas-based company said its plan is superior to the group proposal and will get results more quickly.

Recurrent industrial disasters in the textile industry as well as continued political tensions are “credit negative” for Bangladesh because they may further damage investor confidence in the country, Moody’s Corp. has said. The industry accounts for 80 percent of the country’s total exports and employs more than 3 million people, it estimates.

Golam Mustafa Khan, chief revenue officer of Dhaka North City Corporation, said it may demolish the building where Aleya worked if engineers suggest the structure is beyond repair. The local government body found one three-ton generator and another two-ton unit on the roof, he said, based on information from engineers who inspected the site. An Asian elephant can weigh between 2,041 kilograms and 4,990 kilograms, according to National Geographic.

Workers in the building rushed down the stairway several times last month after spotting fire on the power cables and sparks on operators’ sewing machines, said Aleya, the 30-year-old garment worker.

“But the production manager always tried to stop us from getting out of the factory,” she said. “You work in a garment factory and you live in constant fear.”

To contact the reporters on this story: Adi Narayan in Mumbai at anarayan8@bloomberg.net; Arun Devnath in Dhaka at adevnath@bloomberg.net

To contact the editors responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net; Stephanie Wong at swong139@bloomberg.net

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