Amid Bangladesh Fallout, Cambodian Factory Collapses

Shoe factory floor falls in, killing at least three.

The fashion industry has another black eye.

This story first appeared in the May 17, 2013 issue of WWD.  Subscribe Today.

As it absorbed another deadly disaster — a building housing a shoe factory in Cambodia collapsed early Thursday morning, killing at least three people and injuring 11 others — the industry continued to deal with the Rana Plaza catastrophe last month in Bangladesh that took the lives of 1,127 workers.

The collapse of the ceiling of the shoe factory, located on the outskirts of Phnom Penh, resulted in more bad news for the beleaguered manufacturing community in Asia.

“I’m standing in the factory right now and a portion of the ceiling has basically collapsed,” said David Walsh, Cambodia director of the Solidarity Center, an AFL-CIO affiliate. “Two were killed on the scene and one died in hospital. It’s a calamity. Where the garment industry goes, so do worker rights abuses.”

Japanese sporting goods company Asics confirmed that it had contracted the factory, which is believed to be operated by Wing Stars Shoe Co. Ltd., to make sports shoes. According to Ken Loo, secretary general of the Garment Manufacturers Association in Cambodia, a Taiwanese national owns Wing Stars Shoe, which is a GMAC member. Reached by phone, factory staff declined comment.

Cambodia is often seen as a potential alternative to Bangladesh as companies scour the globe for new low-cost countries in which to manufacture. It is the sixth-largest supplier of textiles and apparel to the U.S.

The incident comes in the wake of a string of recent tragedies in Bangladesh and Pakistan, most recently the Rana Plaza disaster in Savar. It followed several factory fires in the last nine months in Pakistan and Bangladesh that cost hundreds of workers their lives, and the incidents have underscored the often-perilous state of worker safety in Asia.

The cause of the ceiling’s collapse was not immediately clear. According to Mouen Tola, head of the labor program at Phnom Penh-based Community Legal Education Center, initial reports suggest it was due to management storing too many items in the mezzanine.

Loo, the industry official, contested that claim. He said the collapse could have been caused by construction defects from a building contractor who had cut corners.

“From what I saw, they had stocked it with boxes that were about five feet high and some accessories,” he said. “It wasn’t stacked with heavy machinery.”

Labor rights activists were quick to compare the Cambodian incident to the Savar tragedy.

“We have a lot of concern about what happened in Bangladesh, but we did not expect this in Cambodia,” Mouen said. “The government really needs to reconsider how they manage the occupational safety system.”

Sanjiv Pandita, executive director of the Asia Monitor Resource Center, a Hong Kong-based labor rights watchdog, called on the Cambodian government to create an independent workers’ safety regulator.

“Things cannot be changed from the outside because there’s a structural issue here,” he said. “There needs to be a core grassroots organization with oversight, like OSHA in the U.S. Let’s focus on building the institutions and getting Cambodia and Bangladesh funding, because we can have many initiatives, but unless we [create this agency], things will not change.”

However, Loo said there was a marked difference between Cambodia and Bangladesh.

“What happened in Bangladesh is systemic, but what happened here is an unfortunate, isolated incident,” he contended. “I don’t know yet what we’ll do, but we will, of course, do something. There are some construction defects, [but it is not] about the structural integrity of the buildings that workers are in.”

The garment manufacturing industry is Cambodia’s largest export earner, and in a possible sign of the collapse’s political sensitivity, the factory grounds were swarmed with military and government personnel by early afternoon, eyewitnesses said.

Wing Stars Shoe is one of the largest footwear manufacturers in Cambodia and is believed to employ around 7,000 workers across different factories.

International workers’ rights groups have long urged garment labels to improve workers’ safety conditions in Cambodia. A report released last month by the International Labor Organization’s Better Factories Cambodia program warned of grave fire safety violations in garment factories there. Thursday’s tragedy follows incidents such as mass faintings and the nonfatal shootings of workers on strike that have afflicted Cambodia’s garment and shoe manufacturing industry in recent years. The industry employs upward of 350,000 people in the nation of about 15 million.

Meanwhile, in Bangladesh, a natural disaster took its toll on Thursday, as factories in Chittagong stayed closed with Cyclone Mahasen causing panic in coastal areas. Residents of the city heaved a sigh of relief as the cyclone passed by without causing destruction.

Separately, there was relief in sight for factories in Dhaka suburb of Ashulia that have been closed these last three days on the insistence of the Bangladesh Garment Manufacturers and Exporters Association. More than 300 garment factories manufacture for global brands in Ashulia, where there have been a series of workers’ protests seeking higher wages, safer working conditions and death penalties for those responsible for the tragedy in Savar. A government official told WWD that a conference between the labor minister and BGMEA officials on Thursday came up with a final verdict: The factories in Ashulia would reopen Friday. There would be extra security and overtime wages to be paid to workers as Friday is the weekly day off, he said.

“Security is a big concern for us,” said an owner of a factory in Ashulia, who requested anonymity. “There is no saying what level of violence can happen in such situations. But yes, we have agreed to get back to work.”

Shafiqul Islam, counselor of commerce for the Bangladesh Embassy in Washington, said the delegation that came to the U.S. this week, led by foreign minister Dipu Moni, had “productive meetings” with a wide range of government and industry officials.

“The main point in all these meetings is that the government of Bangladesh recognizes the need for reform, for change, and is committed to doing so in a collaborative effort with the industry,” Islam said. “We know things must change in light of the terrible incidents that have occurred. That is what we have been discussing this week, and we have already begun to implement reforms to try to make sure nothing like this happens again.”

Islam said the Bangladesh government understands that different companies and countries need to take different approaches to affecting these reforms and trying to ensure that new approaches are taken to fire and building safety, and factory monitoring and inspections.

“Those that signed the ‘Accord on Fire and Building Safety in Bangladesh’ felt that was the correct way for them,” he said, referring to the IndustriALL Global Union-led accord that has been signed by 37 companies, but only two U.S. ones — PVH Corp. and Abercrombie & Fitch Co. “If Wal-Mart felt it wanted to create its own plan or if Gap wants to do their own agreement, that’s also fine. The important thing is that everyone work to improving the situation and not abandoning Bangladesh. The apparel industry is very important to Bangladesh’s economy and the jobs it provides to workers and we all must work together to make things better.”

In a letter sent Thursday to Bangladesh Prime Minister Sheikh Hasina, House Democratic leaders said, “We are aware of the role that the garment industry has played in providing critically needed employment opportunities for Bangladeshis. We are also aware that a number of steps have been pledged to address issues pertaining to worker safety and rights. However, continued tragedies, including the Tazreen fire and the Rana Plaza building collapse, indicate that many workers have not had an effective voice in the workplace enabling them to address concerns with uncompromising owners and/or managers, even when those concerns are a matter of urgent, life-and-death danger. They also seem to indicate that dangerous conditions exist on a substantial scale in the industry.”

“We fully understand that there are multiple factors which brought about this tragedy and others like it, and it is critical that all key stakeholders take action,” the letter said. “However, we believe there is simply no substitute for tough, comprehensive, uncompromising government support for legislation and fully resourced law enforcement and administrative action, including the right to organize and form unions in the Export Processing Zones, that both empowers workers and prevents more accidents from happening.”

Islam noted that the delegation met with representatives from the State Department, U.S. Trade Representative’s Office and Congressional leaders, and was set to meet with Secretary of State John Kerry on Friday.

Senior officials from the ILO in Geneva lauded the union-company accord on fire and building safety in Bangladesh and welcomed initiatives from all quarters that would contribute to improving the situation in the garment sector. But it also kept the pressure up on the country to usher in reforms on labor laws, and health and safety in the workplace.

Gilbert Fossoun Houngbo, ILO deputy director-general, told WWD, “I think it’s important for all concerned parties to take the issue seriously. One thing to keep in mind is the economic interest, another thing to keep in mind is the health and safety of the workers.…It doesn’t matter what are the disagreements, we need to keep our eyes focused on the end result, which is to have the change made at a country level, and not doing business with companies that are not complying with those minimum standards.”

The senior ILO official said at a news conference that the agency was pressing the Bangladesh government, along with other stakeholders, “in reforming the labor law, essentially, to ensure that the laws and the practices are really compliant with the freedom of association and collective bargaining, known in the ILO as convention 87 and 98.”

He also underscored the importance of beefing up the country’s inspection capabilities. The ILO says the country has only 55 labor inspectors for all sectors, including about 3,000 apparel factories, and Houngbo said the garment sector alone needs at least 400.