With rising pressure from trade unions and apparel industry workers throughout Dhaka, Bangladesh, police officials on Tuesday detained both the chairman and the managing director of Smart Export Garment Ltd. for questioning following the fire over the weekend that killed seven women.
This story first appeared in the January 31, 2013 issue of WWD. Subscribe Today.
The tragedy added to the frustration and anger among industry workers, who have been protesting over the past two months to demand the arrest of the owners of Dhaka-based Tazreen Fashion Ltd., where 111 workers were killed in a fire in November. Although the workers have issued an ultimatum to the government regarding the arrest of the owners, they have not been arrested so far.
Dhaka police officials told WWD that Zakir Ahmed, chairman of Smart Export, and managing director Mohammad Sharif Ahmed were being questioned about the failure of the company to comply with fire safety regulations. The company reportedly did not have fire safety procedures or certification in place, according to police officials. Several other issues have come up as well, including the fact that several of the dead were teenagers and that the emergency gate may have been locked, resulting in the fatal stampede and asphyxiation of the workers.
Police action came in response to a complaint filed by Altaf Hossain after he heard his daughter had been killed in the fire because the emergency gate was locked.
The fact that several international labels were being produced at Smart Export has stirred further international pressure for action and steps to improve the safety of garment workers in Bangladesh.
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The staff of the Institute for Global Labour and Human Rights in Dhaka interviewed a supervisor at Smart Export who identified seven factories that allegedly subcontracted work to the company. All seven factories are reportedly members of the Bangladesh Garment Manufacturers and Exporters Association.
The factories identified by the supervisor are Mrinmoy Fashion Ltd., Concord Fashion Export, Shintex BD Ltd., Syntex Knitwear Ltd., Energypac Fashions Ltd., MHC Apparels Ltd. and Mac-Tex Industries.
“There are apparently a lot of these sweatshops and subcontracting factories operating in Bangladesh and receiving work from more established factories, which was the case here,” said Barbara Briggs, assistant director at the Pittsburgh-based Institute for Global Labour and Human Rights. “The question now is, are the labels whose production were there going to take any responsibility?”
“Retailers know very well that the demands they place on suppliers cannot be met without subcontracting, but they turn a blind eye,” said Scott Nova, executive director of the Worker Rights Consortium. “This allows them to take advantage of the cheap costs these shady subcontract factories offer, at the expense of worker rights and worker safety, while maintaining deniability. When a disaster occurs, they claim they are shocked to discover that unauthorized subcontracting was going on.”
The Bangladesh Center for Worker Solidarity and the Worker Rights Consortium said they have discovered more labels and/or apparel at Smart Export, including the label Okay Men, produced by Kik, a German apparel and nonfood discounter; Mim, a French retailer and women’s apparel and accessories brand, which is a subsidiary of New Look, and Max, a retail chain in the Middle East owned by Landmark Group.
A spokeswoman for Kik denied the company used Smart Export in an e-mail early Wednesday morning.
“The accusations against us which are related to the recent and tragic events in a suburb of Dhaka are incorrect,” she said. “We have never had any business relationship with Smart Export Garment Ltd. Furthermore, there is no evidence that orders were subcontracted to Smart Export Garment Ltd. We explicitly reject contrary statements.”
However, labor groups provided WWD with documents and digital images of labels said to be found in the rubble of Smart Export, including an Okay Men label, which is produced by Kik.
The Kik spokeswoman also said the company has held “exploratory discussions” with a coalition of labor and human rights groups pressing retailers and brands to sign a binding “Bangladesh Fire and Building Safety Agreement.” The company is also considering cooperating with BGMEA, the International Labor Organization and the Buyers’ Forum, a group of large international trading companies, to address the fire safety issues in Bangladesh’s garment industry.
She added that Kik also plans to reach an “appropriate agreement” and participate in the relief fund for victims of the separate Tazreen Fashion fire in November.
The two other retailers have not responded to an inquiry for comment.
Other labels and documents found and previously reported by labor groups include Bershka and Lefties, owned by Inditex Group; the Sol’s label, owned by Paris-based Solo Invest; the Fox & Scott label, registered to Sylvain Scemama in Paris, and swimwear brand Hawaiian Authentics, produced by New York-based M. Hidary & Co. Inc.
Richard Levine, an executive with M. Hidary & Co., said, “We have no association or production at the Smart Export factory in Bangladesh. We are looking into how a document may have gotten there. We work hard with our manufacturing partners to make sure that they abide by safety codes so incidents like this are avoided.”
However, labor groups provided WWD with several documents they said were found at Smart Export after the fire. Among them was a purchase order on M. Hidary & Co. letterhead for units of its “Hawaiian Authentics” men’s swimwear brand. The purchase order, made in August last year, listed the order being placed with a factory named Fashion Store Ltd. It also names the vendor as Grace Fashion Ltd.
Responding to the calls for action, the government ordered an inspection of all its 4,500 garment factories, as well as an order to shut down any factories that did not have exit doors open, with immediate effect. Twenty teams started out on Tuesday under the jurisdiction of the Ministry of Labor and Employment. The report would be submitted as inspections continued and would be completed in three months for Dhaka, ministry officials told WWD.
Trade union leaders have been reacting with only partial satisfaction and are pressing for the arrest of the Tazreen Fashion owners before letting a dialogue with the government open again.
Their view has found widespread support. As Md. Israfil Alam, chairman of the Parliamentary Standing Committee on Ministry of Labor and Employment, said Saturday, “Factory owners in the past incidents at garment factories had never taken responsibility, and unless they are brought to justice and given due punishment, such incidents will continue to happen.”