Wal-Mart Nixed Paying Bangladesh Suppliers to Fight Fire
By Renee Dudley & Arun Devnath
Dec 5, 2012 8:57 AM MT
At a meeting convened in 2011 to boost safety at Bangladesh garment factories, Wal-Mart Stores Inc. (WMT) made a call: paying suppliers more to help them upgrade their manufacturing facilities was too costly.Bangladeshi people identify the bodies of their relatives who died in a fire at a garment factory in the Savar neighborhood in Dhaka, Bangladesh, Sunday Nov. 25, 2012. Polash Khan/AP Photo
Details of the meeting have emerged after a fire at a Bangladesh factory that made clothes for Wal-Mart and Sears Holdings Corp. killed more than 100 people last month. The blaze has renewed pressure on companies to improve working conditions in Bangladesh, where more than 700 garment workers have died since 2005, according to the International Labor Rights Forum, a Washington-based advocacy group.
At the April 2011 meeting in Dhaka, the Bangladesh capital, retailers discussed a contractually enforceable memorandum that would require them to pay Bangladesh factories prices high enough to cover costs of safety improvements. Sridevi Kalavakolanu, a Wal-Mart director of ethical sourcing, told attendees the company wouldn’t share the cost, according to Ineke Zeldenrust, international coordinator for the Clean Clothes Campaign, who attended the gathering. Kalavakolanu and her counterpart at Gap reiterated their position in a report folded into the meeting minutes, obtained by Bloomberg News.