Walmart Lends $50 Million For Bangladesh Factory Safety Improvements

Walmart (NYSE:WMT) said it will lend $50 million to garment factory owners in Bangladesh as part of a push for safer working conditions in the country, Bloomberg reported.

The Walmart-backed loans are part of a package of more than $100 million that a group of 20 major North American retailers pledged in July. The group, known as the Alliance for Bangladesh Worker Safety, has said it will set safety standards by October and refuse to buy from factories that are found by the group to be unsafe.

The group was formed in the wake of the April 24 collapse of a building housing several Bangladeshi apparel factories that killed 1,132 workers and injured more than 2,500.

Despite the attention that the disaster brought to the Bangladeshi factories, neither the Alliance nor the similar Accord on Fire and Building Safety in Bangladesh, which is backed by more than 70 mostly European apparel makers and retailers, have been able to make much headway in cracking down on illegal and unsafe garment factories or helping out families of workers killed or injured in the collapse.

As of early August, only about 350 survivors and family members have received between $1,200 and $2,500 from the Bangladesh government, which promised them $1,200 in cash, $19,236 in savings certificates and an additional $1,200 lump sum in life insurance benefits.

Part of the problem is reportedly that in some cases factory owners are also elected officials and have successfully blocked legal changes to get rid of the unsafe factories, some of which are already illegal but continue operating. In addition, the factory owners' trade group, the Bangladesh Garment Manufacturers and Exporters Association, which said it would pay three months' worth of wages for workers at the collapsed factories, hasn't done that, claiming too many of its members now can't afford to make the payments.

For more:

- See this Bloomberg story

Related stories:

Uniqlo Joins Bangladesh Accord, But Workers From Collapsed Factory Still Aren't Getting Help
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Bangladesh Factory Owners Aren't Held Accountable Because They Control The Law, Activists Say