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Six Retailers Join Bangladesh Factory Pact

May 14, 2013 by Leave a Comment

With only one American company joining — PVH, the parent company of Calvin Klein and Tommy Hilfiger — consumers, investors and labor groups are pressing Gap, Walmart and other American retailers and apparel companies to sign onto the effort. The plan will require participating companies to agree to rigorous inspection of the factories they use in Bangladesh and to help underwrite needed safety improvements at factories with violations.

Once numerous European companies began joining the plan on Monday — led by HM, the Swedish company that is the largest purchaser of apparel from Bangladesh — a division has appeared between European and American companies about what needs to be done to respond to the April 24 factory building collapse in Bangladesh in which more than 1,100 workers died.

Walmart has maintained a distance from the collapse, even though Ether Tex, one of the factories in the collapsed Rana Plaza building, had listed Walmart as a customer on its Web site. Both Walmart and Ether Tex’s chairman have said that Walmart was not a customer at the time of the building collapse.

The Bangladesh Center for Worker Solidarity has provided The New York Times with photos of what it says are documents recovered in the Rana Plaza rubble that show that a Walmart contactor from Canada, Fame Jeans, was having jeans produced for Walmart at Ether Tex. One document, a purchase order dated May 12, 2012, calls for “dark blue wash,” “skinny fit” jeans to be delivered in the fall of 2012.

Another document, dated April 27, 2012, discusses pricing for five different jeans styles, with the F.O.B. prices ranging from $3.41 to $4.50 a pair.

Kevin Gardner, a Walmart spokesman, noted that the documents were from a year ago. “Our investigation of the Rana Plaza building site after the collapse revealed no evidence of authorized or unauthorized production at the time of the tragedy,” Mr. Gardner said. “If we learn of any unauthorized production, we will take appropriate action based upon our zero-tolerance policy on unauthorized subcontracting. We remain committed to promoting stronger safety measures in factories, and that work continues.”

Judy Gearhart, executive director of the International Labor Rights Forum, an advocacy group in Washington, said Walmart was improperly trying to distance itself from the building collapse.

“It’s another example of Walmart’s lack of ability to track the specifics of its supply chain,” she said. She called on Walmart to join a compensation fund for the victims of the Rana Plaza building collapse.

So far no American company has agreed to contribute to such a fund, while Loblaws of Canada, Primark of Britain, El Corte Inglés of Spain and three other European companies have agreed to participate.

Consumer and labor groups have focused more on persuading Gap rather than Walmart to join the Bangladesh factory safety plan. Gap has been the most vocal company in criticizing the plan, expressing concerns that overly litigious American lawyers could seize on the agreement to sue American companies on behalf of aggrieved factory workers in Bangladesh. Gap’s proposed changes would greatly limit any legal liability for any company that violated the plans.

In a statement, Gap said: “We’re pleased that an accord is within reach, and Gap Inc. is ready to sign on today with a modification to a single area — how disputes are resolved in the courts. This proposal is on the table right now with the parties involved. With this single change, this global, historic agreement can move forward with a group of all retailers, not just those based in Europe.”

Under Gap’s proposal, if a retailer is found to have violated the agreement, the only remedy would be public expulsion from the factory safety plan.

“The U.S. is quite litigious,” said Bill Chandler, a Gap spokesman. “We put forward specific proposals that we thought would bring other American retailers into the fold. We thought it would be a step forward and would turn it into a much more global agreement.”

The labor unions and advocacy groups that have negotiated with HM; Inditex, the Spanish company that owns the Zara chain; and other companies that have signed the plan criticized Gap’s proposal to change the agreement. These groups say Gap’s vigorous push against the version of the plan has helped sway some other American companies not to sign.

“Gap Inc. is ready to sign on today with a modification to a single area — how disputes are resolved,” said Scott Nova, executive director of the Worker Rights Consortium, a group sponsored by 175 colleges and universities. “Gap’s demand is that the agreement be made unenforceable — and therefore meaningless. What Gap wants is the right to renege on its commitments when it wishes.”

Gap says that it has already taken substantial steps to improve safety at the 78 factories it says it uses in Bangladesh. It has hired a respected fire inspector to examine those factories and has pledged $22 million in loans to help finance safety upgrades when problems are found.

Among the other companies that joined the Bangladesh safety plan on Tuesday were Kik, a German low-cost apparel retailer; Aldi, the German retail chain; and G-Star Raw, a Dutch designer clothing company.

Article source: http://www.nytimes.com/2013/05/15/business/six-retailers-join-bangladesh-factory-pact.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Some Retailers Rethink Their Role in Bangladesh

May 2, 2013 by Leave a Comment

Benetton repeatedly revised its accounts of goods produced at one of the factories, while officials at Gap, the Children’s Place and other retailers huddled to figure out how to improve conditions, and some debated whether to remain in Bangladesh at all.

At least one big American company, however, had already decided to leave the country — pushed by the last devastating disaster, a fire just six months ago that killed 112 people.

The Walt Disney Company, considered the world’s largest licenser with sales of nearly $40 billion, in March ordered an end to the production of branded merchandise in Bangladesh. A Disney official told The New York Times on Wednesday that the company had sent a letter to thousands of licensees and vendors on March 4 setting out new rules for overseas production.

Less than 1 percent of the factories used by Disney’s contractors are in Bangladesh, according to the official, who spoke on the condition of anonymity. The company’s efforts had accelerated because of the November fire at a factory that labor advocates asserted had made Disney apparel. The Disney ban also extends to other countries, including Pakistan, where a fire last September killed 262 garment workers.

Disney’s move reflects the difficult calculus that companies with operations in countries like Bangladesh are facing as they balance profit and reputation against the backdrop of a wrenching human disaster.

Bangladesh has some of the lowest wages in the world, its government is eager to lure Western companies and their jobs, and many labor groups want those big corporations to stay to improve conditions, not cut their losses and run.

But as the recent string of disasters has shown, there are great perils to operating there.

“These are complicated global issues and there is no ‘one size fits all’ solution,” said Bob Chapek, president of Disney Consumer Products. “Disney is a publicly held company accountable to its shareholders, and after much thought and discussion we felt this was the most responsible way to manage the challenges associated with our supply chain.”

The public disclosure of Disney’s directive came two days after officials from two dozen retailers and apparel companies, including Walmart, Gap, Carrefour and Li Fung, met near Frankfurt with representatives from the German government and nongovernment organizations to try to negotiate a plan to ensure safety at the more than 4,000 garment factories in Bangladesh.

With 3.6 million garment workers and more than $18 billion in apparel exports last year, Bangladesh is the world’s second-largest apparel exporter after China.

Walmart, Gap and other companies said on Wednesday that they were already taking action, including paying for Bangladesh factory managers to be trained in fire safety. But labor advocacy groups are pushing them to do more, especially to help finance factory improvements like fire escapes.

“Companies feel tremendous pressure now,” said Scott Nova, the executive director of the Worker Rights Consortium, a factory-monitoring group based in Washington. “The apparel brands and retailers face a greater level of reputation risk of being associated with abusive and dangerous conditions in Bangladesh than ever before.”

On Wednesday, thousands of people continued to gather around the collapsed Rana Plaza building in Savar, a suburb of Dhaka, Bangladesh’s capital. As emergency personnel dug through the rubble for yet another day, many relatives of the missing carried signs, holding out diminishing hope that a loved one would be found. A mass burial of unclaimed bodies was conducted as the death count climbed above 400.

In Rome, Pope Francis voiced sympathy for Bangladeshi garment workers on Wednesday, saying he was shocked to learn that many of them earned just $40 a month. “This is called slave labor,” he said.

Article source: http://www.nytimes.com/2013/05/02/business/some-retailers-rethink-their-role-in-bangladesh.html?partner=rss&emc=rss

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Rail Project for Port of Los Angeles Sparks Anger in Long Beach

April 12, 2013 by Leave a Comment

It was a provocative statement from the mayor of this city of nearly half a million people, where the port, one of the busiest in the nation, has long driven the economy. For years, Mayor Bob Foster said, he has favored development projects in the region, looking for ways for the port to bring in more business. But the $500 million project by the Burlington Northern Santa Fe Railway would increase traffic and pollution and have a devastating effect on residents in adjacent working-class neighborhoods, he said.

“This is really taking advantage of poor people for the advantage of others,” Mr. Foster said in an interview. “The city of Los Angeles and a major corporation are really treating Long Beach in a deplorable manner — one city is literally ignoring another city’s residents. We’re asking them to be clean and to be a good neighbor and help mitigate this, but they’re basically thumbing their nose at us.”

The fight over the proposed railyard, which would serve as a large center for trains that move shipping containers from the Port of Los Angeles to other parts of the country, is the region’s biggest battle yet over threatened competition from the expansion of the Panama Canal, set to be completed by 2015.

Community activists say the project’s supporters have ignored the negative effects it would have on the neighborhood already hurt by pollution, but those who back it contend that it is the most environmentally friendly way to grow businesses in the region and maintain the port’s dominance.

“We have to start moving things faster and cleaner, and we have to have the infrastructure to do that as close to the port as you can, which is what this does,” said Wally Baker, the chairman of Beat the Canal, a coalition of industry and labor groups supporting projects that they say will bring thousands of jobs to the area. “The last thing we want to do is create more uncertainty. That’s the kind of goofy thing that drives business away from California.”

The ports of Los Angeles and Long Beach have long been economic engines for the region, which is now home to the nation’s largest hub of distribution warehouses that sort the imported goods before they are sent to retailers across the country.

Roughly 40 percent of the country’s container imports, including cars, clothing and household items, mostly from Asia, pass through the two ports, making it the sixth-busiest harbor in the world. Many here worry that competition with ports on the East Coast is the most important threat, because so many of the products that arrive in Long Beach and Los Angeles are on their way elsewhere, often crisscrossing through a web of trains and trucks to get to consumers in the East.

Other ports along the East and Gulf Coasts are rushing to make significant changes to compete with the widened Panama Canal. Last year, the Obama administration moved to speed up the review process to deepen the harbor for many of the ports, saying that deeper harbors would help to create new jobs and strengthen the economy.

Mr. Baker’s group has estimated that the ports could lose 100,000 jobs once the Panama Canal expansion allows larger ships to bypass California and go directly to the East Coast. Without the canal’s expansion, these larger ships could not fit through the waterway. And while Mr. Foster and Long Beach port officials have said that they do not see an immediate threat in the expansion, Los Angeles officials seem to disagree.

David Arian, a retired longshoreman and the vice president of the commission that oversees the Port of Los Angeles, called the railyard “essential to our future.”

“It is the only way to stay competitive, it’s the only way to deal with the canal,” he said during the hearing in March to approve the project. “It’s the only way we’re going to get that market share.”

Officials from the port declined to comment further, concerned that they could provide more fodder for a lawsuit from the plan’s opponents.

The ports have long been known as the biggest contributors to air pollution in the region, with local officials complaining that such pollution has caused an epidemic of asthma, stunted lung development in children and chronic lung disease in adults.

Article source: http://www.nytimes.com/2013/04/12/us/rail-project-for-port-of-los-angeles-sparks-anger-in-long-beach.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,