InfoAnda - Apparel factory fire reveals big brands' shadowy supply chains |

Pakistanis angry over detentions in Times Sq. case
Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They

Taiwan denies boycotting Australian film festival
Thursday, August 6, 2009

AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e

Merkel's support dips, regional ally resigns International
Thursday, September 3, 2009

By Sarah Marsh and Noah Barkin

BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German

Minister seeks closure of anti-Berlusconi websites
Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who

Asian markets mixed after Wall Street rally
Wednesday, March 18, 2009

By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an

Grenade explosion injures 15 in Bangladesh | 20 February 2009
Burundi starts vote-counting in district polls | | 25 May 2010
Japan stocks nudge higher after down week | 22 June 2009

Fighting rages in Sri Lanka, more civilians flee | International | | 15 May 2009

Forum Views () Forum Replies ()

Read more with google mobile : Apparel factory fire reveals big brands' shadowy supply chains |

Edition: U.S. Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Home Business Business Home Economy Technology Media Small Business Legal Deals Earnings Social Pulse Business Video The Freeland File Aerospace & Defense Investing Simplified Markets Markets Home U.S. Markets European Markets Asian Markets Global Market Data Indices M&A Stocks Bonds Currencies Commodities Futures Funds peHUB Dividends World World Home U.S. Brazil China Euro Zone Japan Africa Mexico Russia India Insight World Video Reuters Investigates Decoder Politics Politics Home Supreme Court Politics Video Tech Technology Home MediaFile Science Tech Video Tech Tonic Social Pulse Opinion Opinion Home Chrystia Freeland John Lloyd Felix Salmon Jack Shafer David Rohde Nader Mousavizadeh Lucy P. Marcus Nicholas Wapshott Bethany McLean Anatole Kaletsky Zachary Karabell Edward Hadas Hugo Dixon Ian Bremmer Lawrence Summers Susan Glasser The Great Debate Reihan Salam Frederick Kempe Mark Leonard Breakingviews Equities Credit Private Equity M&A Macro & Markets Politics Breakingviews Video Money Money Home Tax Break Lipper Awards 2012 Global Investing MuniLand Unstructured Finance Linda Stern Mark Miller John Wasik James Saft Analyst Research Alerts Watchlist Portfolio Stock Screener Fund Screener Personal Finance Video Money Clip Investing 201 Life Health Sports Arts Faithworld Business Traveler Entertainment Oddly Enough Lifestyle Video Pictures Pictures Home Reuters Photographers Full Focus Video Reuters TV Reuters News Article Comments (1) Full Focus Editor's Choice Our best photos from the last 24 hours. Slideshow Best photos of the year 2012 Download our Wider Image iPad app Follow Reuters Facebook Twitter RSS YouTube Read IRS finalizes new tax for medical devices in healthcare law 05 Dec 2012 Apple's shares swallow biggest loss in four years 05 Dec 2012 Military halts clashes as political crisis grips Egypt | 3:45pm EST Therapist declined temporary confinement for accused Colorado gunman: report 12:45am EST Guatemala detains McAfee, to expel him to Belize | 2:50am EST Discussed 161 Egyptian protesters breach presidential palace cordon 139 IRS aims to clarify investment income tax under healthcare law 104 Obama’s opening ”fiscal cliff” bid seeks debt limit hike, stimulus Pictures Reuters Photojournalism Our day's top images, in-depth photo essays and offbeat slices of life. See the best of Reuters photography. See more | Photo caption Fishing for shark fin The Ocean Sunset hunts sharks as well as other fish for their meat and fins off the cost of Canada. Slideshow Pregnant princess Princess Kate, Duchess of Cambridge, leaves the hospital. Slideshow Sponsored Links Apparel factory fire reveals big brands' shadowy supply chains Tweet Share this Email Print Related News Chinese factories grow again, but U.S. sector shrinks Mon, Dec 3 2012 Factory surveys show China reviving, global rebound fragile Mon, Dec 3 2012 Bangladesh fire protests rage, supervisors arrested Wed, Nov 28 2012 Protests rage over Bangladesh factory fire, supervisors arrested Wed, Nov 28 2012 Bangladesh mourns, calls factory fire "act of sabotage" Tue, Nov 27 2012 Analysis & Opinion Creating an upscale service economy A truth bomb for Walmart supporters Related Topics World » Investing Simplified » A scarf of a garment worker is seen in the burnt interior of garment factory Tazreen Fashions, after a devastating fire, in Savar November 28, 2012. Credit: Reuters/Andrew Biraj By John Chalmers and Serajul Quadir DHAKA | Thu Dec 6, 2012 2:46pm EST DHAKA (Reuters) - Sweating and trembling as he fielded questions about last month's killer fire at one of his factories in Bangladesh, Delwar Hossain insisted he had no idea the workshop was making clothes for Wal-Mart Stores Inc when it went up in flames. On the other side of the world, Wal-Mart said the factory - where 112 workers lost their lives - was not authorized to produce its merchandise and had been sub-contracted by a supplier without its permission. That there should be such blind spots in the supply chain of the world's largest retailer is puzzling. However, an investigation by Reuters since the November 24 blaze has found that, under pressure from big Western brands to produce huge volumes of apparel fast and at rock-bottom prices, Bangladeshi suppliers routinely sub-contract their orders. This frequently happens without the knowledge of the end-buyers and, all too often, the orders end up in factories that under-pay workers or cut corners on safety. Experts in supply-chain risk say the practice has led to a lack of control over what is manufactured where, by whom and under what conditions. "The first problem is retailers and wholesalers are demanding more and more compliance and more and more protocol. However, they keep pushing everyone for lower and lower prices," said Edward Hertzman, who runs Sourcing Journal, a trade publication. "You have one department of the company campaigning for fair wages etcetera, but then in the very next room the sourcing department is asking for 10-20 percent cheaper. How do you do that?" In the charred remains at the site of the fire in an industrial suburb of Bangladesh's capital, Dhaka, a Reuters photographer found clothes that were labeled for - among other big-brand retailers - Wal-Mart, Sears Holdings Inc and Walt Disney Co. After the fire, both Wal-Mart and Sears admitted that their goods were being manufactured at the Tazreen Fashions workshop, even though both had specifically denied that factory authorization as a supplier. Disney said its records showed that none of its authorized licensees had manufactured Disney-branded products at the factory for the past 12 months. Garment producers in the South Asian country say U.S. and European buyers haggle with them over every nickel and cent to keep their costs down, right down to the price of a shirt button. In turn, the suppliers - operating on wafer-thin margins - are forced to minimize their own costs and this often means farming work out to factories that operate on a shoestring. "Everything has a price," Bangladeshi Commerce Minister Ghulam Muhammed Quader told Reuters in Dhaka. "If you want to really give higher wages or really want to give some sort of other safety standards at a higher level, it costs some money. So the competitors for getting the orders from the big brands always try to cut their cost in different ways." BANGLADESH BOOM For a long time Western apparel buyers depended heavily on China to source their products. But labor shortages and mounting wage pressures prompted them to look elsewhere and Bangladesh has become - as a 2011 McKinsey report put it - "the next sourcing hotspot." There they have found a country that has favorable trade terms with Europe and, crucially - with the minimum wage for garment workers under $37 a month - plenty of cheap labor. Bangladesh's roughly 3,000 factories now account for 80 percent of the country's $24 billion annual exports. The industry employs 3.6 million people and more than four times that number are dependent on the sector for their livelihoods. In short, it has become the economic lifeblood of the once-impoverished country as it moves up from aid to trade. Poor working conditions such as overcrowding and even locked emergency exits, have long been the dark side of this success story. Rights groups say efforts to address this have often been thwarted by curbs on union activities that employers and the government fear could threaten the boom. In April, a labor activist was found murdered and his body bore signs of torture. Human Rights Watch said the killing raised the possibility of government involvement because the man had previously been detained and tortured by security officials. Officials dismissed the suggestion. There have been building collapses and many fires at Bangladeshi garment factories in the past, although none as deadly as the blaze at Tazreen Fashions. Shamoly Akhter, 19, was working on the second floor of the multi-storey factory building as night fell. She said that, when a fire alarm started ringing, two supervisors prevented employees from leaving and told them to return to their work. "The alarm was ringing continuously and we were struggling to get out ... but they said it was just a drill," she said at a Dhaka hospital, where she was being treated for injuries sustained when she leapt from the burning building. She said that music playing in the factory was turned to high volume, apparently to muffle the sound of the alarm. When finally the workers forced their way to the staircase they found it was ablaze, thick with smoke because highly flammable yarn and fabrics stored around exits on the ground floor had caught fire. The factory had no external fire-escape stairs so Akhter, like many of her co-workers, jumped from a window to the ground. Factory owner Hossain, who was not present when the fire broke out, said he had never been told by the building's planners that an outside staircase was necessary. "You see, there are three staircases so why would we need another one?" he told Reuters in an interview. SUBCONTRACTING - "A VERY COMMON PRACTICE" Hossain is managing director of Tuba Group, which has several garment factories. One of its units - Tuba Garments Limited - was recently sub-contracted to produce Wal-Mart clothes, but the order was diverted to Tazreen Fashions, according to two industry sources who declined to be named. Hossain confirmed the order came from a sub-contractor, but said he had not been told the clothes were for Wal-Mart. The trouble is that Wal-Mart rated the Tuba Garments factory as a "yellow" in "ethical sourcing audits," which meant orders could be placed there, but Tazreen Fashions was not on its list of authorized factories. "If somebody cheated ... it is not the fault of Wal-Mart, it is not the fault of that factory even," said Mohammad Shafiul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association. "It is not possible to police everything. Inspection every single hour, every single moment is not possible." Islam said sub-contracting only happens "sometimes," but one garment manufacturer who asked not to be named said it is "a very common practice." "Wal-Mart goes to the lowest bidder so manufacturers have to work on high volumes, but no one can find enough compliant factories to fulfill the orders, so they sub-contract," he said. Sourcing Journal's Hertzman, a veteran of the sourcing world who pairs retailers and apparel brands with factories in five Asian countries, said the whole certification process is often more cosmetic than anything else. "A lot of times factories find ways to get around these certifications," he said. "Everything looks kosher on the day of the audit, but they really are not up to par." The problem boils down to cost, he added. Manufacturers commit to ethical behavior, but they choose countries where workers are paid comparatively meager salaries because it saves them money. Cheaper manufacturing there means cheaper goods on shelves in the West, which is what consumers ultimately want. (Additional reporting by Jessica Wohl and Nivedita Bhattacharjee in Chicago, Lisa Richwine in Los Angeles, and Ben Berkowitz in New York; Editing by Emily Kaiser and Andre Grenon) World Investing Simplified Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (1) fromthecenter wrote: Edition: U.S. Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

Other News on Friday, 7 December 2012
Fatal North Sea collision said to be human error |
Guatemala rejects request for asylum by McAfee |
Greek police clash with youths over 2008 shooting |
Apparel factory fire reveals big brands' shadowy supply chains |
Facebook in talks to buy Microsoft ad technology: reports |
Intel CEO Otellini expects insider to replace him |
Detained software guru McAfee hospitalized in Guatemala |
Alcatel-Lucent out, Gemalto in French blue-chip index |
Broadcom eyes entry into LTE chip market in 2013 |
A123 auction to kick off with at least four bids |
Former Microsoft, Sprint executives launch mobile and cloud fund |
Once-popular Arkansas Passion Play of Jesus' life closes |
Philippines buries dead, typhoon toll hits 418 |
Egypt demonstrators reject Mursi call for dialogue |
Russia, U.S. talk as Syria events accelerate on the ground |
Exclusive: U.S. likely to extend Iran sanction waivers-sources |
U.S. warships moving to monitor North Korea's planned rocket launch |
Chinese Nobel winner dodges call for laureate's freedom |
Canada says reviewing F-35 report, denies plan to cancel |
Emboldened Hamas leader to visit Gaza for first time in 45 years |
Deportation looms for tech guru McAfee after heart drama |
Apple, Samsung spar in court, ruling to come |
Apple to return some Mac production to U.S. in 2013 |
T-Mobile USA plans to ditch phone subsidies, sell iPhone in 2013 |
Top U.S. carriers to set up 911 texting services |
Taiwan contract laptop maker Compal says Nov sales up 6 percent |
Google to charge small businesses for Web-based Apps software |
NTT Docomo loses record 40,800 subscribers in Nov, as iPhone gains |
Netflix says CEO's Facebook post triggered SEC notice |
Google critic disappointed with FTC, meet with Justice |
Jackson's Hobbit: the journey begins |
No Grammy love for Justin Bieber, One Direction |
Dancing with the Stars Burke says voice fine after thyroid surgery |
Breaking Bad, dominates Writers Guild TV nominations |
Spotify gains more listeners and Metallica |
New Whitney Houston book recalls singer's musical magic |
Actor Stephen Baldwin charged with failure to file taxes |
Hamas leader ends long exile, visits Gaza Strip |
Strong quake hits off Japan near Fukushima |
HRW demands Israel justify Gaza strike that killed 12 civilians |
Russian PM defends tough laws, stands behind Putin |
Berlusconi party says will not push Italy into chaos |
Flag riots mar Hillary Clinton's visit to Belfast |
Venezuela's Chavez returns from Cuba after treatment |
Illness leads Serb ambassador to NATO to suicide |
Italian tax police visit Facebook's Milan offices |
China's mini Apple takes slice of smartphone pie |
D. Telekom hopes investments will soften dividend blow |
TPSA sees Polish telco market tumbling further in 2013 |
Russia's Deputy PM to meet Rostelecom board next week |
China labor arbitrators rule against injured Foxconn worker |
Greece at new risk of being pushed off euro
Bodies of missing Tenn. mom, Jo Ann Bain, and daughter found
Female Breasts Are Bigger Than Ever
AMD Trinity Accelerated Processing Units Now in Volume Production
The Avengers (2012 film), made the second biggest opening- and single-day gross of all-time
AMD to Start Production of piledriver
Ivy Bridge Quad-Core, Four-Thread Desktop CPUs
Islamists Protest Lady Gaga's Concert in Indonesia
Japan Successfully Broadcasts an 8K Signal Over the Air
ECB boosts loans to 1 trillion Euro to stop credit crunch
Egypt : Mohammed Morsi won with 52 percent
What do you call 100,000 Frenchmen with their hands up
AMD Launches AMD Embedded R-Series APU Platform
Fed Should not Ignore Emerging Market Crisis
Fed casts shadow over India, emerging markets
Why are Chinese tourists so rude? A few insights

USD EUR - 1 year graph		BlogMeter 1.01