Some of the factory owners in the Rana Plaza complex that collapsed last week, killing some 400 people, were facing financial pressures that pushed them to take safety shortcuts, company executives said.
Phantom Apparels Ltd and Phantom Tac Ltd, housed on the fourth and fifth floors, had faced business disruptions due to political protests that have swept the country since FebruaryJust before the disaster, the factories were rushing to complete an order from Spanish fast-fashion retailer Mango, according to company executives who survived the building collapse.
The $20bn-a-year garment industry had lost $500mn in export orders due to the earlier turmoil, the Bangladesh Garment Manufacturers and Exporters Association said this month. Western buyers had shifted many of those orders to India, it said, warning that some of the three million jobs in the sector were at risk if instability continued.
Workers for all five factories in the building said in interviews they were urged by factory managers Wednesday morning to return to work at Rana Plaza, in Savar, despite warnings from engineers that an exterior crack on the building made it unsafe. It collapsed hours later.
Just before last week’s disaster, two of the factories — Phantom Apparels Ltd and Phantom Tac Ltd — were handling an important order from Spanish fast-fashion retailer Mango MNG Holding SL, documents and statements from executives show.
Those two factories, owned by Aminul Islam, a Dhaka-based businessman, and the other factories had been unable to fill orders due to the chaos, said the factory executives and trade association members. When Mr Islam won a contract with Mango, he was eager to make it work, the executives said.
“The owner told us that the company had lost $121,000 worth of orders and Mango, being such a large buyer, was crucial for us,” said one Phantom executive. “Workers were told not to miss a single day of work since we were losing so much time due to political unrest.”
Mr Islam and the owners of the other factories turned themselves in to police over the weekend after authorities ordered their arrest for criminal negligence. The building owner is also in police custody. The men in custody haven’t yet been charged. Lawyers for the men couldn’t be reached or declined to comment.
Sayed Shah Jamal, Phantom Apparels’ quality-assurance manager, who was rescued from the wreckage on Wednesday, said of the work for the Mango contract, “The fabric had just come in and we were all working very hard to ship the order before the June deadline.”
Documents recovered from the factory site by labor activists and reviewed by this correspondent show several orders for more than 35,000 units of boys’ polo shirts and girls’ leggings for Mango’s Autumn-Winter collection.
Phantom Apparels and Phantom Tac, with a total of 10 production lines between them with 60 seamstresses on each line, were rushing to complete the order, according to the executives.
The factories, which also supplied clothes to other European retailers, had been audited by Mango executives in October to determine safety standards and work conditions, one factory executive said.
“The audit team found some problems and were due to arrive this month for a follow-up audit,” the executive said. “They canceled the visit due to general strikes in the country.”
Mango, in a statement, contradicted the Phantom executives, saying it was in talks with the factory to place a test order but that it hadn’t yet authorised it to do the work and hadn’t yet begun an audit. On Monday, Mango stood by its earlier statements.
“Even so, notwithstanding the social audit, it would have been impossible to detect the structural defects of the collapsed building,” the company said.
Another factory in the building, New Wave Style Ltd, also had problems with delayed shipments and was facing onerous debt repayments, said Annisul Huq, a former president of the Bangladesh garment manufacturers’ association.
The factory, owned by Mahbubur Rahman Tapas and Bazlus Samad Adnan, decided to keep operations going after the warning from building engineers.
“They were under tremendous pressure to meet shipment deadlines,” Mr Huq said.
Industry insiders make it clear that all the factory owners in the Rana Plaza building were staring at financial ruin if the building was to be abandoned.
“With the razor-thin margins and demands of fast fashion, if a factory can’t produce for three or four weeks, it is likely to go under,” said Abdus Salam Murshedy, president of the Exporters’ Association of Bangladesh (EAB). “This is true for most of our factories except the very biggest manufacturers.”
New Wave couldn’t be reached for comment.
Documents recovered from the building site showed the New Wave factory received an order from Italy’s Benetton Group SpA through an Indian agent, Shahi Export (Pvt) Ltd, in August 2012. The order was for 45,000 sleeveless shirts and 27,000 full-arm shirts.
Benetton initially denied any connection to the factory. But on Monday, after labor groups found Benetton-labeled clothing and production documents in the rubble, the company acknowledged a “one-time, subcontracting order that was completed several weeks ago,” a Benetton spokeswoman said.
She said the company had removed the manufacturer from its supplier list after completing the one-time order “as we found that the manufacturer no longer met certain of our standards.”
Other companies that contracted work in the building included Canadian retailer Loblaw Cos. and Primark, a European budget fashion chain owned by Associated British Foods.
Both companies said Monday they would pay compensation to victims of the building collapse and urged other retailers to follow suit. Primark said payments will be made to injured garment workers, children who have lost parents and other family members of the deceased.
“We are fully aware of our responsibility,” Primark said. “We urge these other retailers to come forward and offer assistance.”
The death toll from the accident, after rising rapidly in recent days, reached about 388 people as of yesterday.
Rescuers fear the toll could still rise as the salvage operation shifts from search and rescue to recovering corpses buried in the wreckage.