Loblaw and Joe Fresh say a $2-billion class action lawsuit that a Toronto law firm is attempting to bring against them over the 2013 collapse of a Bangladeshi garment factory that killed more than 1000 people is "without merit," and say they will defend themselves against it.
On Thursday, Toronto law firm Rochon Genova LLP launched a lawsuit against the company and others, seeking $2 billion in damages on behalf of garment workers who survived the collapse of the Rana Plaza garment factory in Bangladesh, and the families and estates of those who did not.
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The statement of claim alleges Loblaw knew before the collapse that Bangladesh factories had "an extremely poor record" of workplace safety standards and industrial building standards.
It also alleges that Loblaw was aware there was a "significant and specific risk" to workers who manufactured Joe Fresh garments and who were employed by their subcontractors in Bangladesh.
Joe Fresh is just one of the many clothing designers who had merchandise being made at the facility via subcontracting.
"We believe that this claim is without merit and intend to vigorously defend our position," Kevin Groh, a spokesperson for Loblaw Companies Limited told CBC News.
Loblaw says it has already spent more than $5 million since the disaster on overhauling its supply chain in the country, including increasing "standards and inspections of all factories where our products are sourced" and being the sole Canadian signatory of an international agreement known as The Accord for Fire and Building Safety in Bangladesh, which introduces standards and audits related to the structural integrity of factories.
"We hope this claim does not distract from the positive work Loblaw has done and continues to do in respect of this tragedy – and that it does not discourage others from making similar contributions," Groh said.
It's worth mentioning that the lawsuit has yet to be certified as a class action. That only happens if a judge looks at the case and determines if there's enough evidence to continue. Many class action lawsuits are thrown out or abandoned before certification.
The head of a shareholder advocacy group that lobbies companies to be more responsible corporate citizens says Loblaw is being targeted because they're a leading company with more capacity to bring about real change than some others.
"They were in the Rana Plaza factory. They had a clear connection there and they did know of these risks in advance and they didn't have a system in place to address them," Kevin Thomas of SHARE told CBC News Thursday.
Thomas credited Loblaw with heeding the "wake-up call" of Rana Plaza, but said other companies have not taken the trouble to examine the risks in their supply lines.
"I'm more concerned from an investor's point of view about the companies that didn't change their game since Rana Plaza," he said.
"Bangladesh is one country, but what about Cambodia, what about Vietnam?"