The Telegraph
Monday , December 10 , 2012
Since 1st March, 1999
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Big retail lesson from neighbour

As Parliament cleared the way for Walmart and Sears to set up shop in India, the US giants and their business practices were being scrutinised afresh in neighbouring Bangladesh from where global retailers source most of their garments sold in stores worldwide. This correspondent was in Dhaka to check out the aftermath of a tragic fire at an overcrowded sweatshop, which was the backroom for the world’s best known labels.

Ashulia (Bangladesh), Dec. 9: Welcome to the capital of the world’s garment industry. Around $19 billion worth of garments are shipped out of Bangladesh and much of it from this non-descript industrial suburb of the country’s capital — Dhaka.

It’s a town dotted with factories towering over what were once green fields and grey-blue ponds, where young women toil at sewing machines for hours to produce cheap clothes, which Walmart and Sears sell.

Welcome also to the place of industrial accidents and protests.

Last Monday, as potential Indian investors brainstormed with their Bangladeshi counterparts on possible collaborations, mostly in garment and gems and jewellery, around 10,000 workers clashed with the police here protesting the death of 112 workers in a devastating fire at an illegally-built factory on November 24.

Before it was silenced by the fire, the sewing machine’s non-stop hum filled up Tazreen Fashions as ill-paid workers stitched up clothes that made their way to US retailer Walmart, European clothing brand C&A, Hong Kong’s Li & Fung and Sears among others.

Many of these brands did not even know Tazreen existed. Buying agencies down the line contract and sub-contract jobs to the 500-odd factories dotting Ashulia.

Workers’ unions and western NGOs such as Amsterdam-based Clean Clothes Campaign blame the global retailers for turning a blind eye to the work conditions, while squeezing prices at the end of the supply chain.

In April last year, a meet of global brands, factory owners, government officials and NGO activists was organised in Dhaka to flag worker safety after several apparel factory fires in Ashulia and elsewhere had claimed dozens of lives.

The leaked minutes of the meeting show that the global brands accepted the need to improve electrical and fire safety measures but implicitly added they could not pay a higher price for garments, which in turn could have funded the modifications. “It is not financially feasible for the brands to make such investments,” the minutes said.

Walmart rebuttal

Contacted by The Telegraph, a Walmart spokesperson said, “Those remarks are out of context. Walmart has been advocating improved fire safety with the Bangladeshi government, industry groups and suppliers.

“We firmly believe factory owners must meet our Standards for Suppliers and we recognise the cost of meeting those standards will be part of the cost of the goods we buy.”

Garment factory owners trying to squeeze the maximum profit out of the supply chain have obviously not invested enough in work-place safety.

Tazreen’s owner, Delwar Hossain, said the Bangladesh government had given him permission to set up a three-storey factory. Hossain added five more floors without any official permit and was constructing the ninth one when the blaze broke out. Despite hints by government officials and factory owners about a possible “sabotage”, the fact remains that “electrical fittings were substandard Rules prescribe that clothing stores and boiler rooms should be in buildings separate from the main factory, but all were lumped in the same building with no fire escape,” said Wajedal Islam Khan, co-ordinator of SKOP, an all-Bangladesh confederation of workers.

Poor infrastructure

A damning US Department of Labour report on Bangladesh says, “On a par with other factory settings, garment factories are often dimly lit, with poor ventilation, and open for very long hours. Workers, mostly female, work without a break during their shift. Too often the factory doors are locked.”

Bangladesh businessmen say they are working to address concerns from buying nations. “Industry here is working overtime to address concerns. Bangladesh will be second to none in the compliance of global norms,” said Abdul Matlub Ahmed, president of the India-Bangladesh Chamber of Commerce and Industry.

Ambassadors of the US and European Union have warned that failure to do so could cost Bangladesh market acceptance in the West.

However, China and India are increasingly replacing the West as the key buyers with the rise in the costs of tailoring in these countries. A tailor, who works for 20 cents per hour in Bangladesh, costs 55 cents in India, 52 cents in Vietnam, and 96 cents in China.

India imported $55 million in garments last year from its eastern neighbour against $35 million the year ago, with big brands such as Big Bazaar, Van Huesen, Park Avenue and Turtle buying from Ashulia. China’s purchase jumped five-fold to more than $100 million last year from $19 million a few years back.