Can Loblaw Live Up To Its Promises In Bangladesh?

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International labour rights groups say they will be closely watching Canada's Loblaw Companies. Ltd., along with other retailers, to see if they live up to promises made after the deadly Rana Plaza factory collapse.

"The devil is in the details," notes Gilbert Houngbo, deputy director-general of the UN's International Labour Organization, who is in Dhaka for four-days of meetings with the government, unions and employers to find a way to prevent another such tragedy.

Loblaw, whose discount clothing brand Joe Fresh was made in the factory, vowed on Thursday to keep its contractors in the country, ensure buildings follow local codes and to compensate victims through a relief fund.

The Canadian company is one of only three of about 30 companies with garments produced in the building that have offered to compensate victims. The other corporations are low-cost UK brand Primark and Spain's department store chain, El Corte Ingles.

"We're just going to need to see what happens on the factory floors," said Liana Foxvog, a director of organization and communications at International Labor Rights Forum, a Washington-based advocacy group.

Loblaw said it produces in 47 facilities in Bangladesh and almost all are likely to require retrofits and renovations to ensure the buildings comply with local building codes, as the company has vowed to do.

Major renovations needed

Bangladesh's multi-storey garment factories are often housed in structures initially built for small, commercial businesses, not to withstand industrial uses and local building codes are rarely observed or enforced.

Most buildings require even the most basic renovations, such as adding emergency exits, building external fire escapes and replacing the collapsible metal gates that separate each floor from the stairwell with proper fireproof walls, said Foxvog.

"These buildings just need major, major upgrades and it's not necessarily something that Loblaw can do on its own," she explained.

As is often the case, a number of factories were operating in the eight-storey Rana Plaza building in Dhaka's commercial suburb of Savar, when it collapsed on April 24 under the weight of illegally built extra floors.

"Is Loblaw going to put in enough funding to bring these buildings up to code, even if the other companies in the factory aren't putting up funding?," Foxvog asked.

Four senior representatives of Loblaw are flying to Bangladesh next week to meet with government and labour officials.

Loblaw has said its own workers will make sure local building codes are followed, but labour organizations want to know whether the audits will be publicly accessible, listing the name and address so that independent audits can also occur.

Some companies leave

Farah Kabir, Bangladesh country director for ActionAid, a global anti-poverty advocacy organization, appreciates Loblaw's vow to stay in Bangladesh to push for change.

"That is a demonstration of a certain amount of commitment and responsibility, but I wish that this had come with an enforcement of audits before this happened," said Kabir.

Six months ago, a fire that killed 112 people spurred the Walt Disney Company to stop production of its merchandise in Bangladesh and other countries that ranked low on the World Bank’s governing indicators, which look at government effectiveness, the rule of law and control of corruption.

Bangladesh is the world's second largest apparel exporter behind China, with about 3.6 million people working in its $20-billion-a-year garment industry. Most workers earn as little as $38 a month.

News of Disney's move out of the country raised questions about whether Western brands with merchandise made in Bangladesh should leave a country where building codes are not enforced, or remain in order to advocate for change.

"By walking away, are we really solving the problem?" asked Kabir.

But labour organizations argue that Western companies need to take a broader approach in order to effect any real change on the ground — and focus their attention on all labour issues, not merely structural integrity issues raised by the collapse of a factory where extra storeys were illegally added.

"Today we're talking about safety because we had a safety issue but you have to jump the gun a little bit. Last time it was a fire. This time it was structural. God knows what it'll be next," said Houngbo.

Firms forced to self-regulate

The International Labor Rights Forum and other groups tried unsuccessfully to get companies to sign onto an agreement to improve conditions in the country.after an earlier fire, in December 2010, killed more than 100 people at another Bangladesh factory.

Only two companies joined the fire and building safety agreement — PVH Corp, which owns Tommy Hilfiger and Calvin Klein, and a major German retailer, Tchibo Group — but on the condition at least two other companies signed on.

"They didn't want to be acting alone, nor should they," said Foxvog. "We need many more companies in this for it to be truly effective."

The fire and building safety plan sought independent building audits and higher prices paid to factories to ensure enough money in coffers to bring the buildings up to code. It also would be legally binding instead of voluntary.

"In some sense, these corporate initiatives are a substitute for real effective national law, just because Bangladesh doesn't have a working labour law or workplace health and safety system," said Brian Langille, an international labour law expert with the University of Toronto faculty of law. "These firms have to step in and try to regulate it themselves."

Labour rights groups are now pitching the fire and building safety plan as a solution to the latest tragedy.

A group of 23 Canadian organizations have signed a letter calling on Loblaw's parent company, George Weston Ltd., to partake in global talks aiming to set out a fire and building safety plan by May 15.

Loblaw said it received information about the fire and building safety plan for Bangladesh from Toronto-based Maquila Solidarity Network and it's currently reviewing it ahead of the deadline.

Trade unions need power

Incremental changes have happened in the past decade with the presence of global brands, say labour activists. Some Western manufacturers are allowing breaks during the workday, raising wages, providing food to employees and seeking to set up schools for children.

"Definitely there has been change but it is not adequate," said Kabir. A key concern for her and others is that workers in the poor South Asian country are unable to push for change themselves.

"Not having a trade union meant that they had to go to work on the 24th of April despite the fact that the building was not safe," said Kabir. "If they had trade unions, this would not have happened."

Appetite for change appears to be growing, even if it's driven ultimately by the mighty dollar.

In an interview with CNN on Thursday, Bangladesh's prime minister, Sheikh Hasina, acknowledged the garment industry faces troubles but assured consumers the government is moving quickly to fix them. "Bangladesh is a place for good conditions for the investment," she added.

The prime minister had little fear that the international companies would stop doing business with the country's massive garment industry, saying they come because of the cheap labour. Hasina also denied that the government is hostile toward unions.

The International Labour Organization's Houngbo remained hopeful that his four-day mission to Bangladesh to meet with government officials, unions and employers would prove fruitful and change will come.

"There's a general sense of urgency and a general sense of what's got to be done. Everybody seems to agree," said Houngbo.

"It's a new day for the country. My hope is that after a few weeks people don't just go back to business as usual."

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