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Foot-dragging in garment factory reform draws ire of Loblaw’s Weston

Family members at the scene of the April collapse of an eight-storey building housing garment factories outside of Bangladesh’s capital city of Dhaka. More than 1,100 workers died in the collapse. Galen Weston, the executive chairman of Loblaw, says others in the industry are not doing enough to prevent another disaster.

REUTERS

Galen Weston, executive chairman of Loblaw Cos. Ltd., blamed other retailers for not following through on measures needed to prevent another Bangladesh factory disaster.

Loblaw was one of only nine companies to attend talks convened in Geneva last week to discuss compensation for those injured, and family members of those killed, in the collapse of an eight-story building housing garment factories outside of Bangladesh's capital city of Dhaka. The International Labour Organization, which chaired the talks, aimed to include companies representing 29 clothing brands made in the Rana Plaza complex. More than 1,100 people died in the collapse, which happened in April.

"We are very frustrated and disappointed with the pace at which the apparel industry is moving on this particular subject," Mr. Weston said on Wednesday at an International Council of Shopping Centres conference in Toronto.

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He described the event as a "poor showing of global retailers who had manufacturing in the Rana Plaza at the conference in Geneva."

Loblaw produces some of its Joe Fresh apparel line in Bangladesh.

Mr. Weston said the retailers that showed up at the meeting, including Primark – a British fashion chain also controlled by Mr. Weston's family – have agreed to a compensation formula "for the most part" and that Loblaw has allocated money for it. He did not disclose the amount.

Major retailers that skipped the Geneva meetings include discount titan Wal-Mart Stores Inc., department-store chain J.C. Penney and fashion purveyors Benneton and the Children's Place. Mr. Weston's comments add to rising pressure on Western companies that benefit from cheap labour in Bangladesh to take more substantive measures to ensure a disaster such as the one at Rana Plaza isn't repeated.

Some companies are reluctant to make payments to accident victims, fearing the move could acknowledge their responsibility and open them to lawsuits for events they feel they couldn't control, industry observers say. Labour groups counter that clothing firms are generally responsible even if they weren't manufacturing in the plants at the time of the disaster.

Mr. Weston said the delay is also a result of the difficulties experienced in putting together a list of the tragedy's victims and their immediate family members, as well as ensuring that the funds are used "in the most constructive way."

He said Loblaw has already committed $1-million toward global charity Save the Children and a rehabilitation hospital in Bangladesh.

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Loblaw spokesperson Bob Chant said the company recently dropped seven of the 40 garment makers it uses in Bangladesh because their facilities don't meet Loblaw's standards. Loblaw began structural integrity testing at plants making its Joe Fresh clothing after the April disaster, he said.

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About the Author
Retailing Reporter

Marina Strauss covers retailing for The Globe and Mail's Report on Business. She follows a wide range of topics in the sector, from the fallout of foreign retailers invading Canada to how a merchant such as the Swedish Ikea gets its mojo. She has probed the rise and fall (and revival efforts) of Loblaw Cos., Hudson's Bay and others. More

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