Bloomberg News

Bangladesh Arrests Owner of Collapsed Building That Killed 362

April 28, 2013

Bangladesh Arrests Executives as 324 Killed in Building Collapse

Rescue workers and volunteers search by hand for victims amongst the debris of the collapsed Rana Plaza building in Dhaka, Bangladesh on April 26, 2013. Photographer: Jeff Holt/Bloomberg

Bangladesh authorities arrested Sohel Rana, the owner of the building where at least 362 people were killed when the factory complex collapsed on April 24, the biggest disaster in the country’s garment industry.

Rana was arrested in the western border town of Benapole from where he planned to cross over into India, Jahangir Kabir Nanak, state minister for local government, told cheering relatives of victims at the disaster site yesterday. Rana was flown to the capital Dhaka last evening. The police earlier arrested executives of three garment makers housed in the Rana Plaza building.

The disaster is at least the third reported industrial accident in the South Asian nation since November, when 112 people died in a fire at a workshop that was producing garments for companies including Wal-Mart Stores Inc. (WMT) Hundreds of protesters demanding punishment for Rana, a member of the ruling Awami League political party’s youth wing, blocked roads and clashed with the police in and around Dhaka on April 27. The army began removing rescuers from the site and started using heavy machines to clear rubble and look for bodies.

“It is now difficult to continue the rescue operation manually and that’s why we are going to use equipment,” said Major General Chowdhury Hasan Suhrawardi, who also gave the death toll, at a press conference in Dhaka yesterday. “We’re attaching the highest importance to saving lives.”

Rescuers have pulled 2,436 people alive from the debris, Suhrawardi said.

6,000 Employed

As many as 6,000 people were employed in facilities housed in Rana Plaza, 24 kilometers (15 miles) northwest of Dhaka, the Bdnews24.com website reported, without citing a source for the information. A few shops and a bank also operated from the building, Health Minister A.F.M. Ruhal Haque said in a briefing on April 24.

Some factory workers laid siege to the headquarters of the Bangladesh Garment Manufacturers and Exporters Association in the capital, Atiqul Islam, president of the industry group, said by phone April 26. Garment factories in Dhaka remained shut for a second day yesterday in the wake of the workers’ protests. Opposition parties led by the Bangladesh Nationalist Party called for a nationwide shutdown on May 2 in solidarity with garment workers.

One police officer and several garment workers were injured in clashes in Savar, where the factory building collapsed, Tahmina Begum, an assistant sub-inspector in the Savar Model Police Station, said by phone on April 27.

Arrests Ordered

Bangladesh Prime Minister Sheikh Hasina Wajed on April 26 ordered the arrest of the owners of five factories located in Rana Plaza. Six people have been taken into custody in connection with the collapse, including Rana’s wife, the Associated Press reported yesterday. Two associates of Rana, who helped him travel to Benapole were also arrested, Mokhlesur Rahman, director general of the Rapid Action Battalion, an elite law-enforcement agency, said at a press briefing yesterday.

“A complete lack of confidence in administration has created public perception of political shelter” for Rana, Ahsan H. Mansur, executive director of Policy Research Institute of Bangladesh, said in a phone interview yesterday. “An arrest is the only way to send a message to all that nobody is above the law.”

Rana’s permit to construct the building, where clothes were made for brands owned by Loblaw Cos. (L) and Associated British Foods Plc (ABF), was from the Savar Municipal Corp., a local body that has lower building standards, and not Dhaka’s development authority, Mannan said.

Unmet Standards

About half of Bangladesh’s garment factories don’t meet legally-required work-safety standards, said Kalpona Akter, executive director of the Bangladesh Center for Worker Solidarity, a non-governmental organization founded by two people who had worked in the garment industry as children to promote safer factories. A factory collapse in 2005 killed 64 and injured 80 people and the November fire killed 112 workers, according to the Clean Clothes Campaign, which seeks to improve working conditions in the garment and sportswear industries.

Bangladesh’s labor law requires safety measures such as fire extinguishers and easily accessible exits at factories.

“Labor-rights groups around the world have been asking, indeed imploring, major retailers to address the grievous safety hazards in their Bangladesh factories and the response is always the same: vague promises and public relations dodges, while the pile of corpses grows ever higher,” Scott Nova, executive director of the Washington-based Worker Rights Consortium, said in a statement.

Loblaw (L)’s Joe Fresh and Associated British Foods (ABF)’ Primark, which said that their suppliers made garments at the collapsed factory, both vowed to help improve working conditions in Bangladesh.

‘Shocked, Saddened’

Joe Fresh, the clothing brand owned by Brampton, Ontario-based Loblaw, had a “small number” of items produced at the complex, Julija Hunter, a spokeswoman, said in an e-mailed statement. Loblaw is “saddened” by the tragedy and will work with its vendor to see how it can help, Hunter said. Loblaw has standards for suppliers to make sure that products are produced in a socially responsible manner and conducts regular audits to ensure compliance, she said.

“We hope to hear more from the authorities about the status of this situation and we are committed to supporting them,” she said.

One of Primark’s suppliers occupied the building’s second floor, the company said in a statement. The budget fashion chain said it was “shocked and saddened” by the accident and has worked with non-governmental organizations to help improve factory standards in Bangladesh.

Zero Tolerance

Wal-Mart, the world’s largest retailer, said its own investigation confirmed it “had no authorized production in the facility,” said Kevin Gardner, a spokesman for the Bentonville, Arkansas-based company. “If we learn of any unauthorized production, we will take appropriate action based upon our zero-tolerance policy on unauthorized subcontracting,” Gardner said.

Mohammad Ali, whose 25-year-old son remains missing, said he heard from his son’s co-workers that they saw cracks on the wall of the building before it collapsed and refused to go to work. Some managers threatened not to pay their monthly salary if they didn’t return to work, he said.

Families of the workers were crying for their loved ones, while others went from hospital to hospital in frantic searches for relatives. Injured workers were being carried on stretchers into a crowded hospital emergency room. Officers have handed over 295 bodies to relatives, according to the Savar police.

$18 Billion Industry

Surging wages and inflation in China, the largest apparel supplier, have prompted retailers such as Wal-Mart and Hoffman Estates, Illinois-based Sears Holdings Corp. (SHLD) to shift production to Bangladesh. In response, an $18 billion manufacturing industry has sprung up, marred by factories operated in buildings with poor electrical wiring, an insufficient number of exits and little firefighting equipment.

The collapsed building had developed cracks the previous day, prompting BRAC Bank Ltd. (BRAC) to order its employees to vacate the premises, said Zeeshan Kingshuk Huq, a spokesman.

“We evacuated our staff,” Huq said. “Other commercial units did not do the same.”

Workers-rights advocates are petitioning companies to sign a contractually enforceable memorandum that would require them to pay Bangladesh factories enough to cover the cost of safety improvements.

So far, New York-based PVH Corp. (PVH), owner of the Tommy Hilfiger brand, and German retailer Tchibo GmbH are the only ones to sign the agreement, which also would require companies to provide accurate and regularly updated lists of their approved suppliers and subcontractors in Bangladesh. It won’t take effect until four major retailers sign up.

Textiles contribute more than 10 percent of Bangladesh’s gross domestic product and about 80 percent of the nation’s exports, mainly to the U.S. and the European Union, according to the manufacturers’ association.

To contact the reporter on this story: Arun Devnath in Dhaka at adevnath@bloomberg.net

To contact the editors responsible for this story: Stanley James at sjames8@bloomberg.net


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