Li & Fung pledges pay-outs for victims of Bangladesh fire

Li & Fung has pledged more than HK$9,000 to each family of the victims of a fire at a Bangladeshi garment factory that killed at least 124 people.

The blaze is the latest industrial accident to raise concerns about the safety of workers who make clothing for companies such as Li & Fung, the world’s largest supplier of clothes and toys to retailers.

Li & Fung, whose clients include Wal-Mart Stores and Target, said the factory has made apparel for the company and is in contact with its owner. The Hong Kong-based company said it will conduct its own investigations into the cause of the fire.

“Rescue operations are still ongoing and the number of the dead may climb,” Habibur Rahman, superintendent of police for Dhaka, told reporters on Sunday on the scene at the industrial belt of Ashulia, on the outskirts of Bangladesh’s capital. The government has no updated death toll on Monday.

“We are very distressed and saddened by the deaths of workers and wish to express our deepest condolences to the families of the victims,” Li & Fung said in an e-mailed statement. It is pledging 100,000 takas (HK$9,000) to each family of every victim, matching the financial assistance from Bangladesh Garment Manufacturers and Exporters Association.

The fire started on Saturday at a warehouse of Tazreen Fashion, a unit of textile manufacturing company Tuba Group, Rahman said. Rapid Action Battalion, a special force consisting of army and police officers, was seen assisting with the rescue operations.

The factory has no emergency exits and workers were unable to escape and were burned alive, Washington-based International Labor Rights Forum said, citing Mohammad Mahbub, a director at the fire department operations. Some workers jumped out of the eight-story building to escape the flames, according to Mohammad Sharif, who runs a grocery store in the neighbourhood and whose parents-in-law worked at the plant.

Bangladesh is the world’s second-largest apparel exporter after China and 700 garment workers have died since 2005 because of unsafe buildings in the Asian country, the International Labor Rights Forum said in a statement. As wages have risen in China, companies such as Li & Fung are tapping Bangladesh and other lower cost Asian countries.

Textiles contribute more than 10 per cent of Bangladesh’s gross domestic product and about 80 per cent of the nation’s exports, mainly to the US and the EU, according to the website of the Bangladesh Garment Manufacturers and Exporters Association.

C&A, the discount chain owned by Switzerland’s Cofra Holding, confirmed it has business ties to Tazreen Fashion, which was commissioned to supply C&A Brazil with 220,000 sweatshirts in the period from December until February next year.

“The victims and their families are in our thoughts and prayers,” Thorsten Rolfes, a spokesman for C&A Europe, said in the statement posted on its website on Sunday.

Tazreen Fashion employs 1,200 workers and exports goods worth $36 million a year, mainly to the US and Europe, according to the company’s website.

Speaking on a television last night, Prime Minister Sheikh Hasina expressed shock at the deaths of the fire victims and that she will be monitoring the rescue operations closely. She will meet with ministers today to decide on a national mourning date for the victims.

Some bodies were burned beyond recognition, according to local television ATN News.

In March, PVH, which markets Tommy Hilfiger and Calvin Klein, signed an agreement with Bangladeshi unions, international unions and other labour rights groups to develop a fire safety program to prevent future deaths in Bangladesh’s garment industry, ILRF said. The group is calling for urgent action to protect factory workers.

Wal-Mart spokesman Kevin Gardner said the company is trying to determine if the factory has a current relationship with Wal- Mart. “Our thoughts are with the families of the victims of this tragedy, he said.

“Fire safety is a critically important area of Wal-Mart’s factory audit program and we have been working across the apparel industry to improve fire safety education and training in Bangladesh,” Gardner said.

German newspaper Abendzeitung said in a report on Sunday that Carrefour SA and Wal-Mart had been customers. A response from Carrefour to an e-mailed request for comment from Carrefour wasn’t immediately available.