Wal-Mart funds supplier training after Bangladesh fire

Wed Apr 10, 2013 12:02am IST

Piles of clothes are seen alongside sewing machines in the Tazreen Fashions garment factory, where 112 workers died in a devastating fire last month, in Savar November 30, 2012. REUTERS/Andrew Biraj/Files

Piles of clothes are seen alongside sewing machines in the Tazreen Fashions garment factory, where 112 workers died in a devastating fire last month, in Savar November 30, 2012.

Credit: Reuters/Andrew Biraj/Files

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(Reuters) - Wal-Mart Stores Inc (WMT.N), the world's largest retailer, is making its biggest push yet to try to improve conditions at factories that produce its clothing after a fire at a Bangladesh factory last year killed 112 people.

The company also said Tuesday it would donate $1.6 million to help start a new Bangladesh training academy, and outlined its efforts to regain control over the complex and far-flung web of factories that make its products.

"With the focus that is there at the moment on fire safety, everyone is keen to make sure that they get the right level of controls in place to protect the workers," Rajan Kamalanathan, Wal-Mart's vice president of ethical sourcing, said in an interview. "There is a need for that."

Wal-Mart says it was unaware that its private-label clothing was being made at the Tazreen Fashions factory in Bangladesh, which went up in flames in November, killing 112 people and injuring at least 150. Bangladeshi authorities said the facility was not safe for use, and Wal-Mart said it had not authorized anyone to make its garments there.

The fire gave rise to criticism that Wal-Mart should have been more aware of its supply chain. Since the fire, Wal-Mart has been taking a harder look at what it can do to monitor safety at the low-cost factories that produce its goods.

While products for other companies, such as Sears Holdings Corp (SHLD.O), were also being made at Tazreen, the biggest push for safety improvements has been on Wal-Mart.

Disney-branded products were also found in the remains of the factory following the fire, but Walt Disney Co (DIS.N) said its records showed that none of its authorized licensees had manufactured Disney-branded products there.

SUPPLIER DISCLOSURES DUE NEXT WEEK

Wal-Mart sent a 10-page letter to suppliers in January to lay out its policies. Since then, it has held meetings with them in Bentonville, Arkansas, where it is based; in Bangkok, and elsewhere.

The company has given its suppliers until April 15 to disclose which factories they work with, and says it will sever ties with those that subcontract work without telling Wal-Mart.

Along with the donation to the Institute for Sustainable Communities (ISC), Wal-Mart last month started to have Bureau Veritas (BVI.PA), a European testing and inspection company, assess factories and train workers on its behalf in Bangladesh.

ISC plans to set up an Environmental, Health and Safety Academy in Bangladesh with the $1.6 million in funding from Wal-Mart and $2 million from Sida, the Swedish International Development Agency.

ISC plans to start training factory managers and workers in Bangladesh in August and is trying to line up more partners for the project, said Barbara McAndrew, ISC's vice president for institutional advancement.

It is still not clear how much companies would have to pay for the training, Wal-Mart and ISC said.

ISC already runs two similar academies in China. The Walmart Foundation, Wal-Mart's philanthropic arm, has contributed $300,000 to that effort. Other companies, including General Electric (GE.N) and Adidas (ADSGn.DE), have also given support, ISC said.

(Reporting by Jessica Wohl in Chicago; Editing by Stephen Coates and Peter Galloway)

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