Wal-Mart washes hands off Simco's hardship
US retail giant Wal-Mart has refused to accept any responsibility for Simco Dresses' financial hardship arising from a rejected shipment, suggesting it deals with Success Apparel, the local company's contractor, over the matter.
Simco received an order on August 14 last year via one of Wal-Mart's sourcing companies, the New York-based Success Apparel, part of which was later subcontracted to Tuba Group, parent company of the controversial Tazreen Fashions.
Tuba Group was supposed to execute the order at Tuba Fashion, a compliant factory, but diverted it to Tazreen Fashions -- without Simco's knowledge.
After the Tazreen fire on November 24 last year, Wal-Mart severed ties with Success Apparel and blocked Simco's first shipment worth $3.90 lakh, which by then had reached the Los Angeles port, leaving Simco on the brink of bankruptcy.
â€œDue to Simco's involvement in the subcontracting that led to Success Apparel's termination, Wal-Mart determined it was inappropriate to purchase the product,â€ said Andy Barron, an executive vice-president of Wal-Mart, in the letter addressed to Muzaffar Siddique, managing director of Simco.
â€œBecause Success Apparel was the party with whom you contracted and that was responsible for informing you of Wal-Mart's requirements, we suggest we work with them to address your concerns.â€
The undisclosed subcontracting conducted by Simco has brought about Success Apparel's non-compliance to Wal-Mart's Standards for Suppliers, which stipulates that workers who produce merchandise for sale at the retailer are treated ethically and that they work in a safe environment.
Siddique, on the other hand, claims Wal-Mart's Dhaka office was aware of the subcontracting agreement between Simco and Tuba Group all along.
â€œI will reply to the Wal-Mart this week,â€ Siddique told The Daily Star.
Additionally, in order not to harm factories that did not engage in prohibitive behaviour, Wal-Mart has decided to purchase merchandise directly from compliant factories producing merchandise for Success Apparel.
â€œHowever, Wal-Mart has and will continue to accept product manufactured by Simco for other suppliers until current purchase orders are completed.â€
Meanwhile, Nazma Akter, president of Sammilito Garment Sramik Federation, a platform for garment workers, said Wal-Mart should accept the products, which were shipped before the fire.
Nazma along with other workers' organisations submitted a letter on December 3 last year to the US retailer's Dhaka office demanding compensation for the fire victims and not to cancel work orders from Bangladesh.
â€œBut Wal-Mart did not respond. This is not ethical,â€ Akter said.