Wal-Mart Stores (WMT), the world’s biggest retailer, could move some of its apparel manufacturing out of Bangladesh, according to a report published in Women’s Wear Daily.
The report said the company has a strategy to reduce its reliance on Bangladesh.
Bangladesh is the world’s second-biggest apparel exporter, after China, with an industry worth about $19 billion. Its labour costs are the lowest in the world, says Charles Kernaghan, executive director of the Institute for Global Labour and Human Rights.
He says workers there make from 18¢ to 26¢ an hour while in China they make an average of $1.34 an hour. Kernaghan also notes that the Bangladesh Parliament is controlled by the business community and the export processing zones by the military.
If Walmart did move some of its apparel manufacturing out of Bangladesh, there are at least two other places it might go: Cambodia, where the average wage is 29¢ an hour, according to Kernaghan; and Vietnam, where workers make about 55¢ an hour.
Walmart’s labour costs would go up, but it could benefit from the better infrastructure available in those countries.
“Bangladesh needs to make a giant step forward in terms of enforceable labor rights,” Kernaghan says. “But when it comes to making the factories safer, this has to be up to the big retailers. It’s at least 50 percent their responsibility.”
Megan Murphy, senior manager for international corporate affairs at Walmart, said in an e-mail: “Bangladesh continues to be an important sourcing market for Wal-Mart. We welcome the opportunity to work with the respective governments, suppliers and factories to improve worker safety conditions and standards.”
Walmart could also be sending a not-so-subtle message to its suppliers in Bangladesh: ‘You need us more than we need you’. UNB