Aaron Vincent Elkaim
in

Q&A : Loblaw

Shockwaves reverberated around the world on April 24, 2013 when the 8-story Rana Plaza collapsed in Bangladesh killing more than 1100 workers making clothes for Western retailers. Canadians were horrified to learn that one of this country’s most iconic brands, Loblaws and its wildly successful clothing brand Joe Fresh Style were involved in the tragedy.

Almost as soon as photos appeared of Joe Fresh tags and clothing in the rubble, the company stepped forward to acknowledge its role, unlike many companies and brands who sought to distance themselves. In the weeks and months since that time, Loblaws and Joe Fresh have promised to lead the way in improving worker safety and vowed to improve the lives of the workers making their clothes.

But the fifth estate investigation into what Canadian retailers knew before thousands lost their lives on that day prompted us to wonder how companies like Loblaws did business in Bangladesh before the collapse.

In a press conference a week after the tragedy, Loblaws Chairman Galen Weston wondered, what role industry played “in propagating a manufacturing culture that would take such risks with people’s lives”

We wanted to ask both him and Joe Fresh President Joseph Mimran for a sit-down interview to probe this further. We were turned down. So we sent a list of questions in email form. Here are the unedited questions we posed and answers we received:

the fifth estate: We accessed shipping records to help us trace the links between Canadian retailers and their Bangladeshi suppliers. The records indicate that New Wave Style -- the company making clothes for Joe Fresh at the time of the Rana Plaza collapse -- first popped up in the records on December 26, 2008. The location of that New Wave Style facility is: PLOT NO. A/3 (4TH & 5TH FLOOR), SECTION NO. 14, MIRPUR, DHAKA-1206, BANGLADESH. As far as you know, is this accurate?

When our team was in Bangladesh, they learned that New Wave Style was making clothes for Joe Fresh at this facility as early as 2007. Can you confirm this as well?

We also learned that a company called House of Pearl appears to be a vendor on an order for Joe Fresh. Did House of Pearl act as a buying house for Joe Fresh on an ongoing basis, much like for example Li and Fung has done for many Canadian retailers.

Loblaw: We produce apparel with a number of factories in Bangladesh, and we have not shared the names of our vendors or our specific process and strategy for sourcing for a varietyQ&A of valid reasons, for instance, but not limited to, that it's competitively sensitive information. Specific to Rana Plaza, the factory we worked with was one of many tenants inside the building complex and we understood that all of our manufacturing was done in a safe environment.

the fifth estate: Could you also tell me whether anyone ever visited this facility? Were any audits done on it?

Loblaw: We regularly visit and audit our vendor factories.

the fifth estate: Factory owners in Bangladesh told us that in terms of compliance from Loblaw/Joe Fresh, they were told to “follow the law of the land.” Is that accurate? If not, could you tell me what your requirements were before Rana Plaza collapsed and what changes you've made (if any).

Loblaw: Attached are the transcripts from the May press event and the presentation to the Foreign Affairs Committee in which Loblaw participated, which might be helpful to you in terms of direct comments on our requirements before the collapse and our commitments to the future. We used and still use internationally recognized and reputable auditing firms that audit apparel factories around the world. Their audit procedures are credibly robust and they do their independent audit, which is reviewed by Joe Fresh and Loblaw compliance teams. And, as was the industry standard at the time, one of the things that was not reviewed or audited was structural audits.

Since then, as you know from our communication on September 20 here are our changes we have made: we have signed onto the Bangladesh Accord on Fire and Building Safety (we are one of 80 plus brands in the Accord and the only Canadian company to do so). Attached is the latest news release issued this morning from the Accord. We have established our own Loblaw standard that states that all of our control brand Loblaw products must be made in facilities that respect local construction and building codes. Vendors that want to do business with Loblaw must comply. Since May, we completed full audits of all our vendor factories that produce for us in Bangladesh and removed from our approved list those factories who did not meet our new standards. The audits and standards include criteria for building integrity. We are in the process of finalizing our team of permanent “boots on the ground”.

the fifth estate: On May 2, at the presser, Joe said that Loblaws will have its own people on the ground reporting directly to Loblaws. Could let me know how many Loblaws employees will be stationed in Bangladesh?

Loblaw: We are in the process of finalizing our team of full-time “boots on the ground” in the region; the exact number has not been finalized.

the fifth estate: Also this would indicate that Loblaws did not have anyone on the ground prior to Rana Plaza. Is this accurate? Just trying to accurately represent the positive changes that you guys are making.

Loblaw: It would be accurate to say that we had people on the ground on a regular basis - we visited and our party audit firms visited and audited. We are now making the move to increase our visibility and help ensure compliance from our vendors, with a full time team located in the region to work with our suppliers and regularly visit factory sites.

the fifth estate: As for the New Wave Style factories located inside Rana Plaza -- did any Loblaws/Joe Fresh employee ever visit the factories?

Loblaw: We, and our third party audit firms, visited our vendor factories located inside Rana Plaza.

the fifth estate: Were you aware that clothes bound for your stores were being made there at the time of the collapse?

Loblaw: Yes, we confirmed we produced in Rana Plaza within hours of the tragedy. This is a matter of public record from our news releases, and our twitter feeds, first issued on April 25, and each day after for a series of days.

the fifth estate: What your conditions/protocol are in place at your company for subcontracting -- was it Loblaws/Joe Fresh or House of Pearl that undertook compliance inspections?

Loblaw: We used and still use internationally recognized and reputable auditing firms that audit apparel factories around the world. Their audit procedures are credibly robust and they do their independent audit, which is reviewed by Joe Fresh and Loblaw compliance teams. And, as was the industry standard at the time, one of the things that we was not reviewed or audited at the time was structural audits.

Since then, as you know from our communication on September 20, - we have signed onto the Accord on Fire and Building Safety (we are one of 80 plus brands in the Accord and the only Canadian company to do so). We have established our own Loblaw standard that states that all of our control brand Loblaw products must be made in facilities that respect local construction and building codes. Vendors that want to do business with Loblaw must comply. Since May, we completed full audits of all our vendor factories that produce for us in Bangladesh and removed from our approved list those factories who did not meet our new standards. The audits and standards include criteria for building integrity.

the fifth estate: On the day before the Rana Plaza collapse, was anyone at Loblaws/Joe Fresh informed that the building had been evacuated due to safety concerns? To your knowledge, was House of Pearl informed? If so, did they communicate this to you?

Loblaw: We learned about the evacuation from media reports in the days following the collapse.

the fifth estate: Lastly, after the building collapsed and consumers in Canada raised concerns, what information was given to front-line staff in Joe Fresh stores about to tell customers who asked about clothes made at Rana Plaza?

Loblaw: We met with and/or communicated with our employees regularly to explain what we knew of the situation and to provide them with information about our sourcing policies, as well as our commitments to our evolve sourcing policies, to include building integrity in audits. We know that they did their best to respond to customers queries. We also were active on our digital properties, providing our customers with regular updates and responding to their questions to the best of our abilities.