A Globe and Mail's months long investigation results in a lengthy report by Mark MacKinnon and Marina Strauss in today's Report on Business. A number of excerpts are posted here, but you can read the entire report BY CLICKING THIS LINK. The report begins by returning to the tragedy at Rana Plaza.
SAVAR, BANGLADESH and TORONTO — The Globe and Mail
At about 8:30 a.m. one morning in April, a generator rumbled to life
at Rana Plaza – rattling the building, as it always did when it started.
Work
had just begun at the welter of garment factories when the power went
out. So a manager on the seventh floor, home to the New Wave Style
factory, was quick to stand up as the lights went back on and announce
that the building was safe. Everyone should continue doing their jobs. But this time, Rana Plaza didn’t stop shaking.
“He died on the
spot as he was announcing that we should keep working,” Raehana Akhter
recalls. Then she fell, too. “It was like stepping into an elevator
[shaft]. I felt this feeling in my stomach, and then everything fell.” When
she landed, Ms. Akhter, a 22-year-old mother who worked as a quality
control officer for about $2 a day, was in complete darkness, with her
left leg trapped under shattered cement. “The ceiling was just
here,” she says, putting her hand about 30 centimetres above her face.
“I felt like this would be my little grave.”
..........
Excerpt 2
As garment factories have pushed into new markets in search of
ever-cheaper labour, the apparel industry has become perhaps the
ultimate symbol of two decades of globalization. Once a cornerstone of
Canadian industry on Spadina Ave. in Toronto and Chabanel St. in
Montreal, the manufacturing of clothing now ties together Western
consumers and distant Asian workers in a cycle driven by trends and
budgets that change with the seasons. No product better represents how
our economy has been altered than the global tee, the fashion basic
that’s sold for miraculously cheap prices, sometimes just $5.
 |
| A child is seen in a residential area adjacent to the Dignity Knitter
garment factory in Sa’ang District, Kandal province, Cambodia. Factory
workers rent small rooms in the compound – which has one water pump and
four squat toilets – for just a few dollars a month. (Photo source: Lauren Crothers for the Globe and Mail) | | | |
As
The Globe and Mail found during more than two months tracking such
T-shirts – from the cotton fields of China to the gleaming offices of
Hong Kong and Singapore
, to factories in Cambodia and Bangladesh
and back to Canadian stores – supply chains are increasingly fragmented.
Production leapfrogs from city to city. Middlemen outsource to other
middlemen. Governments make bold claims but few checks on safety. And
the consumer knows little about the long and tortuous path journey of
that T-shirt to the store – only that it has become far more affordable
than it ever used to be.
Yet as the ties between countries have
become stronger, accountability has become a loose thread. The Globe’s
investigation shows how companies such as Loblaw place their orders
through middlemen, who in turn source work to a network of far-flung
factories. The retailer whose shelves are stocked with cheap T-shirts in
many cases does not know where in the world it or its materials is
going to be produced when an order is placed. Inspecting buildings and
working conditions has been beyond the retailer’s scope.
..........
Excerpt 3
No one personifies the middle man more than Bruce Rockowitz.
The 53-year-old – originally from Vancouver – is the chief executive officer of Li & Fung, the industry’s largest middleman.
After
moving to Hong Kong from Canada in 1979, Mr. Rockowitz co-founded his
own trading house – and outbid established players to land major
American clients. Soon, one of those established players, Li & Fung,
founded in 1906, bought up his company and asked him to head up the
firm. (The first non-Fung to do so.) Since then he’s expanded the
company’s network to 15,000 factories across Asia.
Along the way,
the gregarious Mr. Rockowitz has also become a billionaire, married a
local pop star and, when he’s not working at the glass-clad LiFung
Tower, is seen driving a blue Bentley with a “Rock 8” licence plate
around the city.
But that flash shouldn’t deflect attention to his
real power over the supply chain. He works with such industry giants as
Wal-Mart and Tommy Hilfiger. Hudson’s Bay Co. has Li & Fung manage
much of its apparel outsourcing. And Loblaw and Joe Fresh are another
client.
Twice a year, designers from Joseph Mimran &
Associates, the creators of the Joe Fresh line for Loblaw Cos. Ltd. (Mr.
Mimran is the “Joe” in Joe Fresh”), travel to Asia clutching precious
cargo – the next season’s designs – which are then passed on to factory
bosses.
Those bosses say that when deals are consummated,
middlemen generally take about 5 per cent of the contract’s value from
each side.
To Mr. Rockowitz, the logic of outsourcing the outsourcing is inescapable.
“Retailers
are very focused on opening stores, marketing, designing product,” he
says. “We focus on the supply-chain aspect, the sourcing side, the
logistics side, and then creating brands they don’t want to do in-house …
basically, doing what our customers don’t want to do, so that they can
focus on growing their business.”
THE ENTIRE ARTICLE CAN BE READ HERE.