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Walmart Rejected Safety Upgrades at Asia Factory Where 100 Died in Fire

At some point, consumers need to stop rewarding bad behavior.

It seems a little too easy for Walmart to brush off safety upgrades at their supplier factories. Their reasoning is that the cost is too high. The dead factory workers in Bangladesh, and their families, might have viewed the safety issues differently.

Whether it’s the appalling work conditions at Apple supplier factories in China where workers are available 24×7 and given a cup of tea and a biscuit, the Chinese factories that previously produced lead-tainted children’s toys for the US market or the garment factories throughout Asia, there’s a distinct lack of accountability by too many Western companies. Walmart is only the latest.


At a meeting convened in 2011 to boost safety at Bangladesh garment factories, WalMart Stores Inc. (WMT) made a call: paying suppliers more to help them upgrade their manufacturing facilities was too costly.The comments from a Wal-Mart sourcing director appear in minutes of the meeting, which was attended by more than a dozen retailers including Gap Inc. (GPS), Target Corp. and JC Penney Co.

Details of the meeting have emerged after a fire at a Bangladesh factory that made clothes for WalMart 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.

Walmart is claiming that it cut ties with that factory months before the fire, and blamed any connection to the plant to a supposed rogue supplier.


Wal-Mart Stores Inc. said Monday that the Tazreen Fashion factory in Ashulia, near the Bangladeshi capital, Dhaka, was no longer authorized to produce merchandise for its stores.

But one of its suppliers “subcontracted work to this factory without authorization and in direct violation of our policies,” Wal-Mart said in a statement. “Today, we have terminated the relationship with that supplier,” it said, without identifying the company in question.

But documents from the factory, as reported by the Nation, appear to shoot possible holes in Walmart’s defense:

[T]here were multiple Walmart suppliers using the Tazreen Factory as recently as April of this year, and at least one when the fire broke out. … [T]here are “strong indications in the documents, but short of certain, that it was still multiple suppliers at the time of the fire,” rather than the single rogue supplier implied by Walmart’s statement. … (Some of the Tazreen documents are posted below; they were provided to The Nation by the Corporate Action Network, which also posted them on its own website.)

For Western consumers, this callous bargaining can often mean cheaper prices (unless you’re buying an Apple product, where everyone but Apple gets screwed in all directions – but smile, ’cause it’s trendy to own something that cost two to four times the competition , with next to no warranty) but there’s a cost. Just as there’s a cost at home in the US when Walmart wants to deny workers bargaining rights, cut wages and benefits, there’s a price to pay for cutting costs with suppliers and it can even have deadly consequences.

What’s also disturbing about companies like Walmart cutting corners for workers at home, and suppliers abroad, is that the benefits are all focused on the top of the food chain. Whereas companies used to have a more level playing field where everyone prospered, now the benefits all go to the top. Workers are supposed to be impressed when they receive a few crumbs from three day old, stale bread tossed their way. Look at Hostess. In bankruptcy, and the workers are asked to take a pay cut while the management gets millions in bonuses.

Everyone can accept that times and business models change, but do we really want to be reinforcing bad behavior with businesses that show such little concern for their direct or indirect workers? Giving them your money might save you in the near term, but it’s clear that you could be next in line to get hit with cuts.

At some point, consumers need to stop rewarding bad behavior. We see that the anti-Obamacare extremists of Papa John’s, Denny’s and Applebees are feeling the pinch for their bad behavior, so we know it’s possible to have an impact when we choose to spend our money elsewhere.

As I’ve said before, the free market can work. Giving tax breaks and bailouts to those least in need is not the free market, but choosing to spend your own hard-earned cash with businesses that do the right thing is absolutely the free market. As consumers, we have a lot more power than people realize, and it’s time to start using it.

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