Bangladesh Factory Lacked Permits

By TOM WRIGHT And SYED ZAIN AL-MAHMOUD
DHAKA, Bangladesh—Rescuers in Bangladesh succeeded in freeing 31 people from the rubble of a factory building the day after it collapsed, killing at least 235, as Dhaka city officials reported that the structure had been built without proper permits on unstable land.

The collapse of a factory building killed scores of garment workers in Bangladesh. The WSJ's Shelly Banjo talks about how the latest series of industrial disasters are making retail companies revalue the risks of cheap labor abroad.

Another 29 survivors remained trapped in the remains of Rana Plaza, an eight-story building housing garment factories that collapsed Wednesday, according to rescue workers. Those pulled out late Thursday had been protected by large weaving machines that had stopped falling masonry from crushing them and created air pockets, rescuers said.
The rising death toll, with scores more critically injured, has made the building collapse Bangladesh’s worst industrial accident.
Sohel Rana, the owner of Rana Plaza and a local politician, didn’t seek mandatory permits from a municipal agency charged with overseeing building safety in the greater Dhaka area, said Sheikh Abdul Mannan, a senior official with the agency.
“This building did not receive planning permission,” Mr. Mannan said. “It could and should have been demolished any time.” Attempts to reach Mr. Rana weren’t successful.
Mr. Rana sought permission from the mayor of Savar, a commercial hub just north of Dhaka, to build the commercial complex, which housed five textile factories, a bank and shops. Mr. Mannan said the mayor had no authority to allow construction of Rana Plaza.
The mayor, Refayet Ullah said his office had issued a permit to Mr. Rana without seeking necessary permission from the Dhaka building-safety agency. Mr. Ullah said the agency took too long to issue permits at a time when Bangladesh’s garment industry is booming, as foreign garment manufacturers look for cheaper alternatives to China.
“Hundreds of factories in this area have been built with local council permission,” he said.
He said Mr. Rana was a prominent citizen who owned other buildings in the area, all built with the go-ahead of the local council.
Mr. Rana constructed Rana Plaza in 2007, draining water from a pond and filling it with concrete foundations, according to local residents. Such land is prevalent in Bangladesh, which has many low-lying, swampy areas.
Such land is unstable and can be dangerous if foundations aren’t properly built, said Mr. Mannan of the building-safety agency.
At least two Bangladeshi garment factories at Rana Plaza, in Savar, a commercial hub outside Dhaka, had passed international labor and safety standard audits, but auditors didn’t take the state of the building into account when they conducted the checks.

The factories, New Wave Style and Phantom Apparels, both of which suffered worker fatalities on Wednesday, had been audited against a series of criteria by the Business Social Compliance Initiative.
The BSCI was set up a decade ago by the Brussels-based Foreign Trade Association, a body that comprises some 1,000 European retailers such as Adidas AG, Esprit Holdings Ltd. and Hugo Boss AG.
The initiative’s staff audits factories in countries such as Bangladesh and India to ensure they meet a range of standards, including workers’ rights, prohibition of child labor and a safe and healthy workplace.
It said that New Wave Style and Phantom Apparels had been audited against the BSCI Code of Conduct. The group said its auditors didn’t consider the state of the Rana Plaza building itself.
Workers there were evacuated on Tuesday after a large crack appeared on the exterior wall of the building. But they were asked by factory managers to return to work Wednesday morning, soon after which the building collapsed. Some workers said they were threatened with docked pay if they didn’t comply.

Munir Uz Zaman/Agence France-Presse/Getty Images
Volunteers and rescue workers at the scene of a building collapse on the outskirts of Dhaka, on April 25.

The BSCI said it “focuses on monitoring and improving labor issues within factories.” It said it was the job of “local authorities to ensure the construction and infrastructure is secure.”
The group said Bangladesh had adequate laws governing the safety of buildings but these weren’t properly implemented. The statement didn’t say when it conducted its audits of the factories or how often it carries out such checks.
Big U.S. and European retailers increasingly have sourced garments from Bangladesh as wages in China have risen. Bangladesh is now the world’s second-largest supplier of ready-made apparel after China.
These companies rely on trade association initiatives such as BSCI’s, independent third-party assessors and their own in-house auditors to monitor Bangladeshi suppliers.
Workers’ groups complain such checks have been unable to remedy poor safety standards, with over 700 people dying in factory fires in Bangladesh in recent years. Building collapses had also led to scores of deaths here before Wednesday’s accident.
Lorenz Berzau, BSCI’s managing director, defended the decision to pass the factories in the light of the latest disaster and reports about how workers were urged to return to the building.
Auditors aren’t structural engineers who can assess a building’s strength, which is a job for the government, Mr. Berzau said. Auditors also can’t assess whether managers adhere to high standards all the time.
“It’s very important not to expect too much from the social audit,” Mr. Berzau said, although he added standards would be lower without any independent checks. “BSCI and other initiatives contribute to improve the situation,” he said. “But it’s a long way we have to go.”
Proponents of a self-regulatory system for foreign apparel companies and factories to improve safety for garment workers in Bangladesh are hoping that the initiative will get fresh impetus after the building collapse.
The agreement, drafted by the U.S.-based International Labor Rights Forum and labor groups in Bangladesh in the aftermath of a deadly fire in a garment factory in Dhaka in December 2010, has so far failed to get the support of most big-brand foreign clothing companies.
Judy Gearhart, executive director of the International Labor Rights Forum, said workers need a system to allow them to report safety concerns without the fear of losing their jobs.
“We need [foreign apparel makers] to come to the agreement that we have put forward, we need greater transparency and an integral role for workers and their employers; had this been in place we would not have had workers sent back into work” after the crack appeared, Ms. Gearhart said.
So far, only two big brand retailers have signed up: PVH Corp., owner of Calvin Klein and Tommy Hilfiger, and German retailer Tchibo.
Bangladesh’s government has promised to take action to improve factory safety. In March, the ministry of labor and employment, along with international labor unions and the Bangladesh Garment Manufacturers and Exporters Association, adopted a national action plan on fire safety for the industry. Plans included modernizing equipment, overhauling fire-safety and building-safety laws, and increasing inspections.
—Joanna Sugdencontributed to this article.
Write to Tom Wright at tom.wright@wsj.com

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