Disney Bangladesh: Walt Disney Company Pulls Apparel Out Of Bangladesh Factories; Will Other Brands Follow?

By Philip Ross on May 3, 2013 5:14 PM EDT

collapsed garment building disney pulls out
Members of Border Guards of Bangladesh inspect the collapsed Rana Plaza garment factory as they attempt to rescue workers from rubble. So far, more than 400 bodies have been removed from the smashed concrete structure. (Photo: Reuters)

The disastrous factory collapse last month in Bangladesh has put American-based retail companies in the position of addressing the harsh and deadly working conditions in Bangladesh's garment factories. One American company, Disney, has opted to pull its apparel business out of Bangladesh.

Could Disney set a trend among retailers of ending their merchandise production in Bangladesh?

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The New York Times reports that Walt Disney Company had already decided to leave Bangladesh even before last month's garment factory collapsed, which killed more than 400 people and wounded many, many more.

Disney's decision to pull out of Bangladesh was prompted by a fire late last year in one of the factories that left 112 people dead. From CNN Money:

While Disney is the first brand to completely halt production in Bangladesh after the tragedies, it's a small chunk of what the company sources. Less than 1% of the factories that Disney sources from are located in Bangladesh. Even less are made in the four other counties, according to Disney spokeswoman Tasia Filippatos.

The company said its decision was based on a report from the World Bank that assesses how countries are governed, using metrics like accountability, corruption and violence, among others. The five countries from which Disney pulled production had the lowest scores on those measures.

In a country where only about half of adults are literate and one-third of the population lives below the national poverty line, its government desperately wants to lure Western companies and their jobs. New York Times reports that many labor groups, however, want those corporations to stay and improve conditions instead of running away at the first sign of disaster.  

Disney will reportedly also cut ties with factories in four other countries, including Ecuador, Venezuela, Belarus and Pakistan, and said it will do so by April 2014.

According to Bloomberg Businessweek, other companies like Gap, Wal-Mart and J.C. Penney Co. that also operate in Bangladesh have to work on balancing demands for better working conditions in their factories against the low costs of production and the risk of disaster.  

"If your footprint is low and you make the calculus and there are other places where you have more leverage and can make improvements, that's a sound approach," David Schilling, the senior program director at the Interfaith Center on Corporate Responsibility, told Bloomberg.

Representatives from Wal-Mart and J.C. Penney will be meeting in Frankfurt this week to talk discuss their plans for addressing the concerns over their garment factory working standards.

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