Loblaw’s Bangladesh redemption to be costly

The minimum wage for a Bangladeshi garment worker is US$38 a month. W. Galen Weston, the executive chairman of George Weston Ltd, and family are worth $8 billion. While seemingly disjointed, those two numbers have a very tangential relationship.

But that’s a nuance that’s largely lost in the Twitterverse, the galaxy in which a photo of a Joe Fresh label amidst the rubble of a collapsed clothing factory in Bangladesh that killed at least 400 workers was widely distributed. The world of Twitter isn’t quite as Hobbesian as the conditions inside the average Dhaka sweatshop, but it can be just as unforgiving, a fact that would have played no small part in the recent decision by two Weston-controlled companies, U.K.-based Primark and Loblaw, makers of Joe Fresh, to compensate victims of the worst industrial accident to hit South Asia.

This isn’t to say Weston’s companies wouldn’t have reached out to the workers’ families regardless. However, there’s no question that the specter of one of Canada’s richest families being very directly tied to an illegally constructed, structurally unsafe factory with steel bars on the windows and blocked emergency exits makes for appallingly poor PR. Particularly for an organization that prides itself on being one of the country’s most environmentally-sensitive employers, an award Loblaw won for the fourth year in a row last week.

In Canada at least, most of the attention has been focused on the Loblaw and Joe Fresh connection, somewhat obscuring the fact that the only other major retailer to step forward, claim a measure of responsibility and offer compensation is also a Weston-controlled company. Primark, a British-based clothing manufacturer that prides itself on ethical practices, as promoted on its website, has begun working with a local NGO in Dhaka to provide support and assistance for the workers' families.

Nevertheless, both brands are now facing demands for a boycott of its products. It’s in such circumstances that the crisis communication experts generally try to get out ahead of the story, be as transparent as possible and promise to make amends. Forced or otherwise, Primark and Loblaw have so far followed the script with precision, and thus are now able to craft the news rather than having to continually respond to the latest damaging detail, be it the rising death toll or new revelations on how dire conditions were in the factory.

Of the latter, there’s been no shortage to date. It’s understood that companies liken the Weston subsidiaries were sourcing clothes from Bangladesh because the labour laws are lax and wages are amongst the very lowest in the world. Bangladesh is now the world's second-largest clothing exporter, behind only China.

There remains some dispute around how much business Loblaw was doing in the collapsed building. Reporting in the Globe and Mail on Monday, Barrie McKenna and Marina Strauss reference a Washington-based Workers Rights Consortium that said that this year alone the company ordered almost 18,000 kilograms of clothes, which they noted worked out to 22,000 pairs of pants or 28,000 T-shirts.

For their part, Loblaw refuted the figures, saying the tally was much smaller. However, they obviously realized that bickering over the exact numbers wasn’t in anyone’s best interested, so instead focused on next steps.

As of now, the specifics of the compensation plan are still being worked out. On Wednesday, Weston’s company will release its Q2 earnings and will hold their annaula general meeting on Thursday. There likely will be no connection between the two.

Search