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Loblaw outlines Bangladesh relief plan to Ottawa

Loblaw Companies Limited announced Monday it has reached an agreement to acquire Shoppers Drug Mart Corporation for $12.4 billion in cash and stock.
Loblaw Companies Limited announced Monday it has reached an agreement to acquire Shoppers Drug Mart Corporation for $12.4 billion in cash and stock. Aaron Vincent Elkaim/Canadian Press

Loblaw Cos. Ltd. further outlined plans Tuesday to create better protections for garment workers in Bangladesh, as well as reaffirm a company commitment to remain in the country, a global provider of low-cost textiles for Western firms but a state plagued by lax industrial standards and governmental oversight.

“Our approach is a combination of actions specific to Loblaw and some related to our participation in broader initiatives,” Robert Chant, senior vice-president of corporate affairs at the country’s largest food retailer, said.

Chant was appearing before parliamentary standing committee in Ottawa, which heard from Loblaw among other retailers in the wake of the collapse of a Bangladeshi factory last month that killed 1,100 textile workers.

Garments from Loblaw’s Joe Fresh discount fashion brand were discovered in the rubble and the company quickly acknowledged a relationship with a vendor using the plant, which was in breach of multiple building violations when it collapsed.

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Chant said it isn’t industry practice to audit the structural integrity of facilities used by companies it buys from, but “clearly, it should be.”

Parliamentarians sitting on the Standing Committee on Foreign Affairs and International Development were told of a three-pronged relief program Loblaw is putting in place to aid recovery efforts.

The plan includes direct financial assistance to injured workers and families – though Loblaw has yet to specify how much it will spend; rehabilitation efforts for injured workers, as well as a joint program with Save the Children Canada and Save the Children Bangladesh to “provide life skills and workplace support for garment industry workers and their families,” the company said.

The company also reaffirmed its commitment to a pact with other international retailers such as Benetton and H&M, among others, to have Western firms source garments from regularly inspected individual factories, and to make the reports public. Restoration costs on factories would be covered by the group, with each member contributing $500,000 annually to the effort.

The agreement, called the Accord on Fire and Building Safety, is a five-year, legally-binding contract between the major retailers.

Chant said Loblaw remains firmly committed to keeping production in Bangladesh, a country where loosely enforced industrial regulation and government corruption have come under increasing scrutiny.

There are roughly four million textile workers in the South Asian country, and nearly 80 per cent are women. Chant echoed international studies and reports that suggest working in the textile industry empowers women, giving them a bigger voice in family affairs and raising their position in society.

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“That’s why we have committed to keep our apparel production in Bangladesh,” the Loblaw executive said.

In later questioning, another reason was given by the company executive – the high quality of garments produced in the country, Chant said, noting it wasn’t price alone that formed the business case for being there. “The combination of two is where the magic is,” Chant said.