retail news in context, analysis with attitude

The New York Times reports that several global apparel companies have come to an agreement with authorities in Bangladesh "to a landmark plan to help pay for fire safety and building improvements after the collapse last month of the Rana Plaza factory complex, which killed more than 1,100 people.

"The agreement, hailed by labor and consumer groups as a major breakthrough, came as the Bangladeshi government also took steps to respond to the April 24 disaster at Rana Plaza outside Dhaka, the Bangladeshi capital. In the last two days, the government has pledged to raise wages for garment workers and change labor laws to make it easier to form trade unions."

These moves are seen as breaking a vicious cycle that has contributed to a toxic environment for many workers in Bangladesh, where employees can make as little as $37 a month for working in unsafe conditions, and yet global brands "have often sought to deflect any direct responsibility for the problems, while the government has often been tepid in protecting worker rights."

Meanwhile, Reuters reports that Walmart has "called on the Bangladesh government on Monday to stop production at one apparel factory and investigate the condition at another until workers' safety could be assured ... Walmart said that it had stopped production at Stitch Tone Apparels factory because it had discovered that a neighboring factory had structural problems.

"It also said inspectors who had been contracted by Walmart had reported a potentially dangerous condition at another one of the factories Walmart uses, Liz Apparels factory. The inspectors notified the government, the factory owner and other companies that contract with the facility.

"Walmart called on other companies to halt their production in these facilities."
KC's View:
I think it is fine for companies to help pay for safety improvements and call for the Bangladesh government to do a better job of inspecting buildings and assuring that they are up to safety codes.

In the end, however, retailers have the ultimate hammer - they can refuse to do business with suppliers that are manufacturing product under questionable conditions and exploiting workers. And they can come down with that hammer with speed and force, making all the difference in the world if they stand for something other than cheap goods.

In our environment of transparency, it is critical for these companies to know exactly what is going on in all these factories, and to make sure that they live up to standards that they - and their customers - find to be acceptable. They are responsible, in the end, and can be held culpable. Ignorance is not a defense. Inexpensive goods are not an excuse.