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Dhaka Tribune

Benetton to continue with Bangladesh RMG factories

Update : 11 May 2013, 07:10 AM

In his first interview since the deadly collapse of a building that housed five garment factories in Savar, the chief executive officer of Benetton has said his company plans to continue using factories in Bangladesh to manufacture its products, asserting that the welfare of workers in poor countries is best served by providing jobs.

"It's not the solution pull out from Bangladesh or to think in the future we can leave Bangladesh," Biagio Chiarolanza said. "I spent some period of my life in this part of the world, and I believe – I really believe – Benetton and other international brands can help these countries improve their condition. But we need a safe and happy working environment and we need to have better conditions."

Chiarolanza, a 20-year Benetton veteran who became the CEO in 2010 after spending seven years as head of operations, told The Huffington Post on May 8 that his company had purchased small quantities of shirts from a manufacturer that operated inside the plant.

He said Benetton bought the shirts from a company called New Wave Style, which was one of several garment factories housed in Rana Plaza.

The collapse of the building in an industrial suburb of Dhaka on April 24 took the lives of more than 1,000 people.

“The New Wave company, at the time of the tragic disaster, was not one of our suppliers, but one of our direct Indian suppliers had subcontracted two orders,” said Chiarolanza, speaking via phone from Italy, where Benetton is based.

One of Benetton’s suppliers in India had issues fulfilling orders, and offered the option to relocate a portion of its work to several manufacturers located in Bangladesh, according to a Benetton executive who spoke on the condition that he remain anonymous. New Wave was one of those manufacturers.

He emphasised that Benetton’s orders from New Wave were relatively small, totalling around 200,000 shirts, and were issued in December last year and this January.

The shirts were made inside Rana Plaza, shipped to the supplier in India and then distributed through Benetton’s "entire distribution network," Chiarolanza said, though he did not disclose the locations of retail outlets where the clothing eventually landed on shelves.

According to Chiarolanza, the company commissioned an assessment of New Wave prior to placing its order. That assessment included checks on the manufacturer's ability to meet quality standards and fulfil the order on time, and it looked at issues related to working conditions and safety.

Benetton requires that all of its manufacturers sign a code of conduct addressing myriad issues of concern, from child labour to discrimination in hiring and firing practices, he said.

Chiarolanza said the tragedy has prompted Benetton to add "additional items" to its assessment process: going forward assessments will scrutinise the structural integrity of the buildings where its products are made.

Between 2% and 4% of Benetton’s products are made in factories in Bangladesh, according to the company. Benetton directly manages about half of this production, while relying on outside suppliers – mostly in China – for the rest.

Among the reasons Chiarolanza cited for opting to remain in Bangladesh is a need to maintain operations in multiple regions, giving Benetton the capability to quickly produce and deliver products to retail outlets worldwide.

Other countries, such as Laos and Egypt, offer very cheap labour, Chiarolanza said. But Bangladesh presents the best place to make T-shirts and other simple items that are shipped off to large Asian markets nearby, including China.

Benetton affirmed its stance on wages in Bangladesh: a low wage is better than no wage at all. Chiarolanza argued that the wages provide an opportunity for advancement, particularly for women, since the vast majority of workers in garment factories are female. Nova, though, does not accept the status quo in the poverty-stricken nation.

"The wages in Bangladesh are an act of cruelty," he said. "Women cannot support their families on $40 a month. Yes, unemployment is worse, but that is no justification for paying sub-poverty wages that are half of the wages in the next lowest-cost country."

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