Why aren't Bangladesh factories safer?
For one reason, companies like Wal-Mart and Gap have nixed proposals for independent inspections as being too costly and binding.
Back in November, 112 workers were killed by a fire at the Tasreen Fashions factory in a Dhaka suburb. After that fire, the Associated Press noted that clothing brands and retailers continued to reject a union-sponsored proposal to improve safety throughout Bangladesh's $20 billion garment industry. Instead, companies stuck with a patchwork system of private audits and training that labor groups say just doesn't work in a country where inspections are lax and factory owners are chummy with the government.
In the five months since the Tasreen blaze, Bangladesh factories have suffered 41 other "fire incidents," according to a labor organization tied to the AFL-CIO umbrella group of American unions. Combined, the recent incidents killed nine workers and injured more than 660.
Bangladesh has the world's lowest labor costs, with a minimum wage of about $37 a month for a garment industry job. Retailers and brands including Wal-Mart (WMT), H&M, Sears (SHLD), Gap (GPS) and Tommy Hilfiger (part of PVH Corp. (PVH) all produce clothes there.
In 2011, those companies were presented with a safety plan that would ditch government inspections and establish an independent inspectorate to oversee all factories in Bangladesh, with powers to shut down unsafe facilities as part of a legally binding contract signed by suppliers, customers and unions. The inspections would be paid for by contributions from the companies of up to $500,000 per year.
The "legally binding" and "contributions" portions of that plan made retailers including Wal-Mart, H&M and Gap nix it and, in some cases, go with internal audits, training films and inspections.
In the aftermath of the Tasreen Fashions fire, Wal-Mart earlier this month announced it was instituting a zero-tolerance policy for unauthorized subcontracting in Bangladesh. The world's largest retailer also said it was contributing $1.6 million to help launch an academy in Bangladesh "to provide comprehensive training on fire safety and environmental, health and workplace safety."
That didn't help workers in the recent Rana Plaza building collapse. Officials quoted by Reuters said factory owners in the latest disaster ignored warnings to keep people out of the building after cracks were discovered in it last Tuesday. Promises are lovely, but when buildings fall and workers die just months after such promises are made, it may be time for fewer promises and more legally binding plans.
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