Wal-Mart Fires Supplier After Bangladesh Revelation

Clothing giant refuses to sign worker safety agreement, announces own plan.

ByABC News
May 15, 2013, 6:58 PM

May 15, 2013 — -- For the second time in a year, Wal-Mart has announced it would be firing a clothing supplier after a deadly incident revealed garments bound for their stores were being produced under substandard conditions in Bangladesh.

Wal-Mart announced Wednesday it would be terminating its contract with a Canadian-based blue jeans supplier Fame Jeans a few hours after documents surfaced showing the company had at one point ordered pants from a factory inside Rana Plaza. The eight-story building in the Bangladesh capital collapsed earlier this month, killing more than 1,100 garment workers.

The documents were from May 2012, and Wal-Mart said it did not have any products in the factory when the collapse occurred.

"The production described in these documents was from a year ago, and based upon our policy on unauthorized subcontracting we are terminating this supplier," Wal-Mart statement said. "This supplier, Fame Jeans, had told us there was no previous production at Rana Plaza, but our suppliers have a binding obligation to disclose all factories producing Wal-Mart merchandise."

Fame Jeans did not respond to messages seeking comment, but an executive from the company told The New York Times a "rogue employee" had placed the order, and had decided to use the factory without senior company managers knowing. The document, which the Times first reported on Wednesday morning, shows a request for 5,322 pairs of skinny fit girls jeans and identifies Wal-Mart as the customer.

Initially, Wal-Mart said its investigation after the building collapse had confirmed that the retailer "had no authorized production in this facility."

"If we learn of any unauthorized production, we will take appropriate action based upon our zero-tolerance policy on unauthorized subcontracting," the statement said.

The chain of events following the deadly building collapse in some respects echoes the aftermath of a garment factory fire six months earlier that killed 112 workers. Three days after that fire, when documents surfaced indicating a Wal-Mart supplier had sourced clothing to that factory, Wal-Mart announced it had terminated its relationship with the contractor.

"A supplier subcontracted work to this factory without authorization and in direct violation of our policies," the company's statement said then.

Advocates for better safety conditions in Bangladesh said they were surprised that a company so well-known for keeping firm command of its supply chain had now twice found its clothes being made in factories it didn't know about.

Scott Nova, the executive director of the Worker Rights Consortium, said he would like to see the retailer take responsibility for its production process and address the conditions in Bangladesh that have been leading to the deadly disasters there.

"One disaster after another at factories producing Wal-Mart goods, but it's never Wal-Mart's fault," Nova said. "They always have some story about a rogue supplier or sneaky subcontractor."

Wal-Mart spokesman Kevin Gardner said Wal-Mart is taking dramatic steps to address the epidemic of unsafe conditions in Bangladesh, where the company produces more than $1 billion of clothing and goods each year.

"The need for companies, non-governmental agencies, workers, and government to take action when hazardous conditions exist is essential to improving factory conditions, and Wal-Mart is committed to providing even greater transparency into its supply chain in order to help drive change," Gardner said.

He said the company has posted a list of every Bangladesh factory that its inspectors have flagged as potentially dangerous and committed to publicly release the inspection results from all our authorized factories in Bangladesh. "Transparency in our supply chain is critical in order for us to be able to identify worker safety issues like those found in Rana Plaza," he said.

While Wal-Mart has not signed the workplace safety agreement reached between labor groups, worker advocates and a number of large European retailers, the company has also announced its own plans to tackle the conditions in Bangladesh. Those plans include enhanced safety inspections that aim to prevent deadly fires and collapses.

READ: Major Retailers Sign Worker Safety Agreement After Bangladesh Horror

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