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Thu May 30, 2013
Walmart And Bangladesh Factory Safety Standards
American retailers have refused to join an international plan to improve safety conditions at garment factories in Bangladesh. That includes Walmart. Thinking back to a meeting this past winter, the retail giant's stance came as no surprise to commentator Lee Cullum.
“Give me a W-A- L!” And on to the end of the official Walmart cheer that animates many important occasions at that company. It ends like this: “Who’s number one?” Then everybody shouts, “The Customer!”
President and CEO Mike Duke explained all this at a Council on Foreign Relations gathering in New York last December. Pickets outside protested Walmart’s ties to the Tazreen factory in Bangladesh, where a fire had killed 112 workers a month before, as well as the treatment of pigs slaughtered for sale in Walmart stores.
But it was the fire that kept coming up in questions inside the session that wintry night. Mike Duke pointed out that Walmart had stopped working with the Tazreen factory but a supplier had used it anyway, without authorization from the company. In fact, he said, Walmart had stopped doing business with 94 factories in Bangladesh in 2010 because of problems with fire safety.
The trouble now has gone far beyond fire. More than 1, 120 people thus far—many of them young women with children—had the life crushed out of them in Dhaka, when the Rana Plaza collapsed, one floor upon the other, in late April. Some had warned that the building was cracking apart, but factory owners were afraid to slow down, even for a day, lest they lose their customers in the U.S. and Europe, impatient for performance, right now, at the right price. Besides that, workers were loath to miss any of their wages which for many was probably the legal minimum, $37 a month, the lowest in the world, though the government in Bangladesh says now an increase might be considered, and not a moment too soon.
Walmart has said it was not involved in any of the five factories in Rana Plaza. However, the New York Times found documents indicating that a Canadian contractor did make jeans there for Walmart last year. That contractor has since blamed the whole thing on a “rogue employee.” Whatever the true circumstances of the business between the two, Walmart has refused to sign a joint agreement with European retailers to finance rigorous inspections of factories in Bangladesh plus repairs and improvements where necessary, including fire escapes. Like other American retailers, the giant from Bentonville is concerned that the plan would be legally binding. Instead the corporation has offered to spend $1.8 million to train 2000 Bangladeshi managers in preventing and surviving fires. It also has pledged to inspect all of the 279 factories it uses in Bangladesh and report any problems on its website and to the government. No mention has been made of paying to shore up dangerous buildings.
The tragic recent history of garment workers in Bangladesh cannot be reversed by relatively modest gestures toward training, inspecting and reporting. As a questioner from the Financial Times noted with Mark Duke, “ There seems to be a conflict between expecting low prices from those factories and expecting those factories to be able to meet your standards. So could the solution… be to give back a bit of profitability to those factories so they can work in better conditions?”
Duke was emphatic in his reply: “We will not buy from an unsafe factory. So this is not a price discussion.” But of course there has to be a price discussion or the carnage will continue. Some observers have noted that a two to three, or perhaps five percent increase would go far toward providing workers in Bangladesh a living wage and safe conditions. That’s little more than a nickel on a $15 shirt.
Mike Duke pointed out with justifiable pride that Sam Walton created Walmart “to help people life a better life.” Surely this includes helping them to stay alive at all.
Lee Cullum is a veteran journalist and commentator living in Dallas.