Ever since a building with garment factories collapsed in Bangladesh last week, killing more than 400 people, Western apparel companies with ties to the country have scrambled to address public concerns about working conditions there.
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. But at least one big U.S. company with Bangladeshi operations 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 Co., considered the world's largest licenser, with nearly $40 billion in sales, in March ordered an end to production of branded merchandise in Bangladesh. A Disney official said in an interview Wednesday that the company had sent a letter to thousands of licensees and vendors 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 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 nations, including Pakistan, where a fire in September killed 262 garment workers. Disney's move reflects the difficult calculus that companies with operations in countries such as Bangladesh are facing as they balance profit and reputation against the backdrop of a wrenching human disaster.
Bangladesh has some of the world's lowest wages, its government is eager to lure Western companies and their jobs, and many worker advocacy 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 Wal-Mart, Gap, Carrefour and Li & Fung -- met near Frankfurt with German government representatives and nongovernment organizations to try to negotiate a plan to ensure safety at Bangladesh's more than 4,000 garment factories. 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.
Wal-Mart, Gap and other companies said 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 improvements such as fire escapes.
"Companies feel tremendous pressure now," said Scott Nova, executive director of the Worker Rights Consortium, a Washington-based factory monitoring group. "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, which was constructed without proper permits 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 Wednesday, saying he was shocked to learn that many of them earned just $40 a month. "This is called slave labor," he said.
European Union officials called for immediate safety improvements, and said they were considering changes in Bangladesh's duty-free and quota-free status to encourage more responsible management by the country's garment industry.
Western retailers and brands that sell apparel made in Bangladesh say they use only factories that monitoring firms have inspected and approved. One of the world's most prominent monitoring groups, the Business Social Compliance Initiative, based in Brussels, has acknowledged that it had approved two of the factories inside Rana Plaza, although it said that its inspections did not consider the structural soundness of the building.world