Inspectors Certified Pakistani Factory as Safe Before Disaster

http://www.nytimes.com/2012/09/20/world/asia/pakistan-factory-passed-inspection-before-fire.html

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ISLAMABAD, Pakistan — A prominent factory monitoring group heavily financed by industry gave a clean bill of health to a Pakistani apparel plant last month, just weeks before a fire engulfed the premises and killed nearly 300 workers, many of them trapped behind locked exit doors.

In August, two inspectors who visited the factory, Ali Enterprises in Karachi, to examine working conditions gave it a prestigious SA8000 certification, meaning it had met international standards in nine areas, including health and safety, child labor and minimum wages. The two inspectors were working on behalf of Social Accountability International, a nonprofit monitoring group based in New York that obtains much of its financing from corporations and relies on 21 affiliates around the world to do most of its inspections.

Weeks later, a fire swept the plant on Sept. 12, trapping hundreds of workers in a building with barred windows and just one open exit, resulting in one of the worst industrial disasters in history — one that killed nearly twice as many workers as the landmark Triangle shirtwaist factory fire of 1911 in New York.

The Karachi tragedy is a huge embarrassment to the factory monitoring system, in which many Western garment and electronics companies rely on auditing groups to provide a coveted seal of approval to their low-cost suppliers in the developing world.

As the blaze spread — much as the Triangle fire did a century earlier — some workers were forced to leap from upper-floor windows, suffering serious injuries; many more died of smoke inhalation and from searing temperatures inside the building. A German discount textile chain has said its jeans were being manufactured in the plant at the time.

The calamity has led to bitter recriminations in Pakistan, where textile exports play a vital role in a faltering economy. For international rights campaigners, the fact that the factory had been certified by a respected Western organization made clear the failings of a controversial 15-year-old industry initiative.

“The whole system is flawed,” said Scott Nova, executive director of the Worker Rights Consortium, a monitoring group based in Washington that is financed by American universities. “This demonstrates, more clearly than ever, that corporate-funded monitoring systems like S.A.I. cannot and will not protect workers.”

Social Accountability International said it had suspended work in Pakistan with the RINA Group, an Italian company that carried out the Ali Enterprises audit on its behalf. It added that it was engaged in a broad review of its entire certification process.

“We’re trying to find out what went wrong,” Eileen Kohl Kaufman, executive director of Social Accountability International, said in an interview. “It’s unimaginably horrible. The only thing we can hope for is clear answers so as to show how to take preventive action.”

The three owners of the Ali Enterprises factory, who fled Karachi in the hours after the fire broke out, appeared this week at a courthouse in Larkana, 200 miles to the northeast. The State Bank of Pakistan has frozen the owners’ bank accounts, which hold more than $5 million, according to news media reports. Their passports have been confiscated, and they may face criminal charges.

On Monday, a two-person government commission of inquiry started investigating the circumstances around the fire. It has already uncovered evidence of gross failings in Pakistan’s regulatory system, which is riddled with corruption, political interference and poor management.

During a hearing on Tuesday, electrical safety inspectors struggled to define the rules and regulations of their own department. One said they had formally stopped doing factory inspections in 2003.

Records showed that the Ali Enterprises factory had officially registered just 250 workers even though in reality as many as 1,000 people worked there, said Mirza Ikhtiar Baig, senior adviser on textiles to the prime minister. “There is an urgent need to review our safety features,” he said.

But the disaster has also revived scrutiny of the procurement policies of the Western companies that have their clothes made in factories like Ali Enterprises.

In a statement about the fire, Social Accountability International said, “The enormity of this tragedy points to endemic issues in the apparel industry for decent working conditions.”

The SA8000 certification, which was begun in 1997, is central to the work of Social Accountability International, whose stated mission is “to advance the human rights of workers around the world,” and which is supported by companies like Gap; Gucci, in Italy; and Groupe Carrefour, in France, as well as representatives of some labor rights groups.

Based on International Labor Organization and United Nations standards, the group says on its Web site that the certification has “improved the lives of over 1.8 million workers in over 3,000 factories, across 65 countries and 66 industrial sectors.”

But Richard M. Locke, a professor of political science at the M.I.T. Sloan School of Management who has written extensively about monitoring, said the Ali Enterprises fire suggested that such claims were exaggerated.

“Even after a decade or more of such private monitoring efforts, these programs — no matter how well funded or designed or how well trained their auditors are — simply do not in and of themselves produce sustained and significant improvements in labor standards in most supply chain factories,” Professor Locke said.

The RINA Group, which carried out the Ali Enterprises audit, has performed 540 factory certifications for Social Accountability International, according to the the international organization’s Web site, including nearly 100 in Pakistan.

Although Ali Enterprises was a well-established textiles plant, largely in the supply of denim products, so far just one of its Western customers has come forward publicly: the German textile discount chain KiK, which operates 3,200 stores in Germany, Austria and six Eastern European countries.

KiK — an acronym for Kunde ist König, which means the customer is king — has previously faced criticism for its supply-chain practices in Bangladesh.

In an e-mail, a company spokeswoman told European labor rights activists that it had obtained three independent audits of Ali Enterprises. The factory failed to meet fire safety standards during a 2007 check, but those problems were remedied by the time of a subsequent check in December 2011, she said.

KiK said it had started a relief fund for the families of the dead and injured workers in conjunction with other Western producers that use the plant. But the identities of those producers remain a mystery.

One reporter found a pair of jeans bearing the Diesel brand on the factory’s premises after the fire, but Diesel has denied any links to the plant.

In recent years, many factory monitors have come under criticism. For instance, various audits of Foxconn, which assembles iPhones and iPads for Apple in China, have been heavily criticized for failing to stop child labor, illegal amounts of overtime and dangerous conditions.

Ms. Kaufman of Social Accountability International said the two inspectors spent four days at the Karachi plant. She noted that because this was an initial audit for certification, the plant’s managers had been warned of the visit. She said future inspections would have been without advance notice.

Tessel Pauli, coordinator for the Clean Clothes Campaign, a European antisweatshop group, criticized the audit process.

“Workers are often told what to tell the auditor,” she said. “The inspections are announced, and there is time to do things like open exit doors that other times are locked.”

After the Ali Enterprises fire, some surviving workers said they had been warned of a visit by inspectors and coached to lie about their working conditions, under threat of dismissal.

<NYT_AUTHOR_ID> <p>Declan Walsh reported from Islamabad, and Steven Greenhouse from New York.