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A global outcry that followed a deadly factory collapse in Bangladesh prompted the garment industry to take a closer look at supplier safety standards.


Retailers that manufacture clothes in Bangladesh factories, where substandard conditions have been deadly, are slowly working to improve how those facilities operate.

Retailers such as Loblaw Cos. Ltd., which makes the Joe Fresh line, and Wal-Mart Stores Inc., have gone as far as to stop using a handful of plants in Bangladesh because they didn't pass safety inspections.

Wal-Mart, the world's largest retailer, disclosed on Monday a list of 75 factories that it had inspected, about 15 per cent of which had failed the first round of safety checks and are working to improve their plants.

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"We're not done yet," Jay Jorgensen, Wal-Mart's chief compliance officer, said in an interview. "We're committed to the workers in Bangladesh."

The moves come after a series of fires and other tragedies made headlines. The worst occurred last April when a building that housed factories, including one producing Joe Fresh apparel, collapsed, leaving 1,129 people dead. It provoked a global outcry, prompting the garment industry to start to improve its suppliers' safety standards.

Western companies that use the plants have banded together in two separate groups to implement changes: the Alliance for Bangladesh Worker Safety – consisting of Wal-Mart and other North American retailers – and the Accord on Fire and Building Safety in Bangladesh, which includes Loblaw and mostly European chains.

Hudson's Bay Co., which is a member of the Alliance, said it will also disclose which factories it uses, HBC spokeswoman Tiffany Bourre said. But the company, which acquired Saks Inc. this month, did not say what other information it will reveal about conditions at those factories, nor the timing of its disclosure.

The Alliance has already publicly disclosed all factories used by its members in Bangladesh. "As a member, we were required to disclose our Bangladesh factory locations to the Alliance," Ms. Bourre said.

Loblaw, which will not disclose its factory names, recently dropped three of the 40 plants it works with in Bangladesh because they failed its safety audits, spokesman Bob Chant said on Monday. Following the tragic building collapse, Loblaw shored up its auditing requirements and started to check for building integrity along with fire and safety regulations and working conditions.

The retailer is working with its remaining factories to make "minor" improvements in areas such as worker training and record keeping, Mr. Chant said.

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Wal-Mart stopped doing business with two factories that failed its safety inspections and couldn't fix the problems, Mr. Jorgensen said. One of those plants, REU, is the site of a work stoppage, while the other, AFTB Garments, is building a new factory, a spokeswoman said later.

Mr. Jorgensen said Wal-Mart has the most in-depth audit inspections of any company. In all, it sources from more than 200 factories in Bangladesh and will post audit results for all of them.

Wal-Mart and other North American companies did not join the Accord because it includes "unusual litigation risks. We don't want one dime of the money we're going to spend to be spent on lawyers." Wal-Mart so far has spent $4-million (U.S.) on factory audits, he said.

But Scott Nova, executive director of the Worker Rights Consortium, a Washington labour advocacy group, said Wal-Mart's reports contain very little "real" information, such as what precise violations existed at the factories, which ones were corrected and which remain to be corrected.

"There are no specifics about what the hazards are – just an opaque scoring system," he said. "This is not transparency and it would be a mistake to draw conclusions from it about what is really going on."

Mr. Nova said the Accord brands have made binding commitments to help pay for factory renovations, agreed to independent inspections with full public transparency, and accepted a genuine role for unions in protecting worker safety.

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Loblaw has also begun to compensate employees (or their dependents) of the Bangladesh factory, called New Wave Style, affected by the collapse, with three months' wages, Mr. Chant said. Loblaw is following in the path of clothier Primark, its sister chain in Britain – both controlled by the Weston family.

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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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