We would like to call reader attention, especially those residing in either retail, apparel or other low-cost focused supply chains, to some newer information concerning the recent factory fire that occurred in Bangladesh. Â Last month, a fire in an apparel factory operated by Tazreen Fashions Ltd. outside Dhaka, Bangladesh tragically killed 112 people and raised yet another appeal for increased worker safety in low-cost manufacturing environments.
Today’s Wall Street Journal features a rather in-depth investigative article, Fire Warnings Went Unheard, (paid subscription or free metered view) concerning both the timeline and nature of supplier relationships that preceded this fire. The article presents evidence as to a perceived  lack of knowledge or accountability as to whether a supplier was qualified to produce goods for a retail customer. It is a probing editorial as to how suppliers and retailers can either turn a blind eye to existing supplier working conditions, or how a lack of concise information regarding certification, or lack thereof, can be “assumed’ to be shared. We recommend this as important reading.
For those unable to access the article, we provide a brief synopsis. WSJ reporters investigated documents within the burned out factory, as well as interviewed various suppliers in the alleged chain of contract arrangements. They report that just weeks before the fire, a majority of the Tazreen assembly lines were dedicated to production of girls’ apparel destined for Wal-Mart, apparently subcontracted to Tazreen from another designated Wal-Mart supplier. A spokesperson for Wal-Mart confirms that the factory was removed from that global retailer’s list of authorized factories months before the incident, and that the existing work was subcontracted in violation of supplier standards, a cause for termination of contract with the original contracted supplier.
WSJ reporters trace an audit that was conducted in May 2011, performed for a separate Wal-Mart supplier that found that fire exits and stairwells were blocked and workers were unaware of evacuation routes. WSJ reporters found evidence of a suspected December 2011 audit, but it had its pages of findings ripped out. While Wal-Mart and other retailers have mechanisms to audit and approve factories, the WSJ indicated that warning signs are often overlooked. The news of a barred factory might not be communicated to other suppliers or the very factories themselves, according to WSJ interviews. A marketing employee at Tazreen’s parent company claimed no documentation indicating that the factory was barred. WSJ also reports four other suppliers to Wal-Mart worked with Tazreen in 2012, all claiming lack of knowledge as to final production source.
The WSJ makes no summary conclusions as a result of its investigative reporting. Perhaps that part was edited. In any case, I’m sure our Supply Chain Matters readers can form their own conclusions. No supplier wants to risk losing business from a major retail customer, especially one with the volume clout of Wal-Mart. At the same time, volume commitments, profitability and on-time delivery pressures cause other actions to occur. An environment of see no evil, tell no evil becomes predominant until tragedy occurs.
Meanwhile, apparel workers across Bangladesh remain concerned for their safety, with global labor rights groups calling for more accountability and proactive remediation programs.
Apparel and clothing supply chains obviously have some homework, but the question remains, who specifically has the homework assignment.
Bob Ferrari
Hi Bob, this is seedy at best, and i have already tried to summarise the issues at length here – as well as offer some ideas as to how this might have been preventable – you can check them out here, and I’d be grateful for any of your erudite views (I’ll update the post following your summary of these findings when I can – I don’t subscribe to the WSJ).
For me and my company – which to be fair is entering pilot phase in January, so not basing this on anything other than a hunch – the biggest problem with any auditing is who completes the audit. Right now, we have a system where management – under all the pressures you mention – are the only ones really in the loop. They do the paperwork, clean the facilities when the inspector calls, and coach any worker who might get quizzed during the tour. Then as soon as the inspector leaves town, doors and windows are barred, women and children file back in.
Our approach is to use anonymous phone/web surveys that workers complete. Most workers now have some access to a mobile, and there are ways to make them free and touch tone so that they can have their say. We can then contrast this view with the view of management that current audits focus on. The gap between the two is where the truth lies.
As it can be deployed pretty much instantly, there are no huge costs or problems with scale. In Bangladesh there are 4,500 apparel factories and millions of workers. All could be surveyed in weeks.
Yes, there are problems. Workers used to lying for their job might still be likely to do so online or over the phone as they do face to face. Managers might try to fill in the surveys themselves too. But there are cunning ways to spot a fake so to speak.
Anyway, we hope it will take auditing into the 2.0 world. And it is better trying to hear the truth from workers now before such tragedies occur.
That’s of course unless as you say brands might really not rather know.
Hello Stuart,
Thanks for sharing your observations.
Factory owners have always found the means to neutralize the intent or accuracy of audits and different approaches like the ones you describe can certainly be helpful. The Fair Labor Association included online and in-person surveys with workers when it conducted recent audits of Apple’s contract manufacturer,Foxconn. However, the mitigation process to correct problems has to have commitment from factory management, and here lies the crux of current issues. Who pays the price?
By our view, the industry (retailers, suppliers, producers) has to stop pointing fingers of denial up and down the supply chain and get serious about enforcing and paying for minimum safety standards. We as consumers, need to also be willing to select and purchase apparel that has been produced under safe working conditions, even if that apparel costs a bit more. An independent auditing process that has broad powers, that can certify a facility as both safe and free of unlawful labor practices, should yield a label that states that condition.
Best wishes on your firm’s efforts auditing efforts.
Bob Ferrari
Hello Everyone,
An new update to our December 11th and other commentary related to the tragic Bangladesh factory fire. The Wall Street Journal and other media report that a Bangladeshi government panel investigating this fire has concluded that the fire was an act of sabotage. However, this panel did not specify who was responsible.
The panel further accused the owner of Tazreen Fashions of “criminal negligence” and recommended that authorities pursue murder charges against this executive. Three mid-level executives who are suspected of stopping workers from exiting the facility remain in police custody and the report indicates that it is unclear whether these executives have been formally charged with a crime.
Meanwhile, a worker rights group within the country remains skeptical about the government investigation and questions if the fire was caused by arson, why murder charges are being considered for the factory owner.
No doubt- the events and repercussions surrounding this tragedy continue to unfold.
Bob Ferrari