By ALLEN G. BREED, ANNE D'INNOCENZIO and SCOTT MAYEROWITZ, Associated Press
About a year and a half before a fire at a clothing factory in Bangladesh killed 112 people in November, executives from Wal-Mart, Gap and other big retailers met nearby to discuss ways to prevent the unsafe working conditions that have made such tragedies common.
Representatives from a dozen of the world's largest retailers and fashion labels gathered with labor groups and local officials in April 2011 at the three-day meeting held in the 15-story, glass-walled headquarters of the Bangladesh Garment Manufacturers & Exporters Association in Dhaka, the capital. They were considering a first-of-its-kind contract that would govern fire safety inspections at thousands of Bangladeshi factories making T-shirts, blazers, and other clothes Americans covet.
Under the terms of the agreement, each company would be required to publicly report fire hazards at factories, pay factory owners more to make repairs and provide at least $500,000 over two years for the effort. They would also sign a legally binding agreement that would make them liable when there's a factory fire.
Discussions seemed promising. Then, on the second day, Sridevi Kalavakolanu, director of ethical sourcing for Wal-Mart Stores Inc., spoke up. "In most cases very extensive and costly modifications would need to be undertaken to some factories," Kalavakolanu was quoted as saying in the minutes of the meeting obtained by The Associated Press. "It is not financially feasible ... to make such investments."
The statement from the world's largest retailer, with $447 billion in annual revenue, essentially sucked the air out of the room, witnesses said. It also set the tone for the rest of the meeting, which ended the next day without a single company agreeing to the plan.
"I think that really had quite an impact on ... everybody who was in the room," said Ineke Zeldenrust, who was at the meeting representing the workers' rights group Clean Clothes Campaign. "It was quite clear that we were very far from a solution."
As if to underline how much still needs to be done, even as executives nixed the proposal over tea in an air-conditioned room decorated with flowers, scores of scarred survivors and their relatives gathered outside the same building to await compensation checks from another fatal factory collapse more than six years earlier.
The retailers' meeting and its aftermath highlighted a central issue for the $1-trillion dollar global clothing industry: What role retailers play — and should play — in making working conditions safer at the factories that manufacture their apparel.
Retailers often claim they know little or nothing about conditions at factories, because the long and intricate manufacturing chain runs through several contractors and sub-contractors. Wal-Mart and others whose garments were found in the ruins of the fatal Tazreen Fashions Ltd. on Nov. 24 say they had severed ties with the factory or were unaware their clothes were being produced there.
Yet some industry experts and labor activists say it is those major retailers, and the customers who buy their clothes, who ultimately set the price for how much factories get paid, and how much they in turn pay their workers. Safety, they say, can take second place to profits.
The retail industry hasn't released estimates on how much it would cost to upgrade Bangladeshi factories to Western standards. But one advocacy group, The Worker Rights Consortium, puts the cost at about $1.5 billion to $3 billion over the next five years. That's about 3 percent of the $95 billion expected to be spent on clothes manufacturing in the country during that time. It also amounts to about 10 cents added onto the cost of a T-shirt.
Building fires have led to more than 600 garment work deaths in Bangladesh since 2005, according to research by the advocacy group International Labor Rights Forum.
Major retailers such as Wal-Mart, Gap Inc. and Swedish clothing chain H&M have stepped up their own fire safety efforts, but they've stopped short of industry-wide standards that would hold them legally and financially accountable for fire hazards at factories.
Gap, which owns the Gap, Old Navy and Banana Republic chains, turned down the proposal because it did not want to be vulnerable to lawsuits, according to Bobbi Silten, senior vice president of global responsibility. The retailer also did not want to pay factories more money to help with safety upgrades, she said.