Barred by Wal-Mart, Bangladeshi clothes suppliers feel left on the shelf

The day after Wal-Mart Stores published Simco's name on its list of banned Bangladesh suppliers, the garment maker learned it had lost an order from US retailer J.C. Penney for 500,000 pairs of pyjamas.

Khurrum Siddique, Simco's head of operations, thinks this is no coincidence. He said his factories, named along with dozens of others on Wal-Mart's "red" list of unauthorised suppliers first published on May 14, have become pariahs for Western brands that are trying to play it safe in Bangladesh after a litany of deadly workplace accidents.

The reputational blow dealt to these businesses exposes a dilemma for multinationals since the April 24 collapse of a building outside Dhaka that killed 1,130 people, most of them low-paid seamstresses. Is it better to sever ties with long-time suppliers that may pose a safety risk, or stay and try to lift standards?

"What Wal-Mart is doing at the moment is nothing but saving its own skin. As a responsible business partner, they should stay with us and help improve working conditions for the safety and security of workers," said Reaz Bin Mahmood, a representative of the Bangladeshi garment industry. "For so long, they made huge profits. Now the time has come to join friendly hands with us."

Simco's four factories appeared on Wal-Mart's list even though they had never failed a safety audit in 22 years of supplying the world's biggest retailer.

Wal-Mart said Simco was banned for unauthorised sub-contracting of an order to a factory called Tazreen Fashions where 112 workers died in a fire last year. Simco said it had subcontracted to Tuba Garments, which was an authorised Wal-Mart supplier at the time, but Tuba then shifted the order from its mother factory to Tazreen.