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Supplier threatens to sue Wal-Mart in Bangladesh
Publication Date : 10-06-2013
A Bangladeshi garment maker, Simco Dresses Ltd, has threatened to take legal action against US retail giant Wal-Mart for blacklisting the company.
Wal-Mart used to buy clothes from Simco, but after the Rana Plaza collapse that killed 1,131 people in April, the retailer declared 245 Bangladeshi factories unauthorised. Simco was one of them.
The retailer also posted the names and addresses of the apparel units on its website and said these factories failed to meet its “standards for suppliers”.
Simco in a letter to Andy Barron, an executive vice president of Wal-Mart, said putting the name of Simco on the list was unfortunate.
“You do not give any specific information but are tarring and feathering the good repute of our company which has been built over 29 years,” Khurrum Siddique, deputy managing director of Simco Group, said in the letter sent on May 17.
The other factories under the Simco Group that Wal-Mart has declared unauthorised are Simco Bangladesh, Kins Collections and Nimmi Apparels.
“We do not want to work for Wal-Mart in future,” the letter read.
“But putting us on the list because of so-called ‘electrical, fire and building safety’ issues is not only a false misrepresentation but will also cause us serious financial damage, because our other customers, American or otherwise, are following the list.”
“I, therefore, would immediately request you to remove our name from the list, or else we will be forced to take legal action,” the letter said.
However, in reply, the retailer said they are committed to the social and safety standards encompassed in their standards for suppliers.
“It is for the reason that we published the list of factories that our suppliers are not authorised to utilise,” Wal-Mart said.
The Daily Star has obtained a copy of the Simco letter and the reply.
Wal-Mart Ethical sourcing audits result in a factory rating based on the type of issue found, the retailer said.
“A factory that has been assessed as ‘red-failed/unauthorised’ is one in which our independent audits have found serious or repeated violations of our standards,” Wal-Mart said.
These violations could relate to safety issues, social issues, unauthorised subcontracting or other requirements established by its standards for suppliers.
“Unauthorised factories are not permitted to produce merchandise for Wal-Mart,” it said.
Wal-Mart eliminated the Simco entities from its list of authorised factories due to issues associated with undisclosed subcontracting of Wal-Mart production to Tazreen factory.
Muzaffar U Siddique, managing director of Simco Dresses, said Wal-Mart did not accept a shipment of Simco as it was subcontracting part of its production to Tazreen Fashions where a fire killed 112 workers last year.
The shipment worth US$390,000 has been lying on the Los Angeles port now, Siddique said.
Simco sent the goods to Wal-Mart through the retailer’s appointed vendor Success Apparels. Wal-Mart severed ties with Success after the Tazreen fire.
“I held meetings with Wal-Mart officials, but they do not agree to pay,” Siddique said.