Thursday, May 2, 2013

Disney Pulls Out of Bangladesh Factories



The Walt Disney Company told licensees and vendors to halt production in "highest-risk countries" like Bangladesh and Pakistan.

The Walt Disney Company has stopped production of branded merchandise in Bangladesh, in response to the spate of fatal factory accidents last fall.

The company sent a letter in March to vendors and licensees to transition production out of the "highest-risk countries," like Bangladesh, in order to bolster safety standards in its supply chain.

Disney will also halt production in four other countries: Ecuador, Venezuela, Belarus and Pakistan, by April 2014.

The decision was made before last week's devastating collapse of a factory building in Bangladesh that left more than 400 people dead. It was prompted by the November fire at the Tazreen Fashions Factory in Bangladesh's capital Dhaka that killed 112 people, and another fire in Pakistan that killed 262 garment workers last September.

"After much thought and discussion we felt this was the most responsible way to manage the challenges associated with our supply chain," said Bob Chapek, president of Disney Consumer Products.


Related: Shoppers face tough choices over Bangladesh

While Disney (DIS, Fortune 500) 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.

Disney said it will continue to source from some countries, like Haiti and Cambodia, that didn't get high marks in the World Bank report, but only with factories that partner with the Better Work program run by the International Labor Organization and the International Finance Corporation. The group works to control health and safety conditions.

Read More and See Video... http://money.cnn.com/2013/05/02/news/companies/disney-bangladesh/index.html?source=yahoo_quote


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