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. 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.