At a meeting convened in 2011 to boost safety at Bangladeshgarment factories, Wal-Mart Stores Inc. made a call: payingsuppliers more to help them upgrade their manufacturing facilitieswas too costly.

The comments from a Wal-Mart sourcing director appear in minutesof the meeting, which was attended by more than a dozen retailersincluding Gap Inc., Target Corp. and JC Penney Co.

Details of the meeting have emerged after a fire at a Bangladeshfactory that made clothes for Wal-Mart and Sears Holdings Corp.killed more than 100 people last month. The blaze has renewedpressure on companies to improve working conditions in Bangladesh,where more than 700 garment workers have died since 2005, accordingto the International Labor Rights Forum, a Washington-basedadvocacy group.

At the April 2011 meeting in Dhaka, the Bangladesh capital,retailers discussed a contractually enforceable memorandum thatwould require them to pay Bangladesh factories prices high enoughto cover costs of safety improvements. Sridevi Kalavakolanu, aWal-Mart director of ethical sourcing, told attendees the companywouldn't share the cost, according to Ineke Zeldenrust,international coordinator for the Clean Clothes Campaign, whoattended the gathering. Kalavakolanu and her counterpart at Gapreiterated their position in a report folded into the meetingminutes, obtained by Bloomberg News.

“Specifically to the issue of any corrections on electrical andfire safety, we are talking about 4,500 factories, and in mostcases very extensive and costly modifications would need to beundertaken to some factories,” they said in the document. “It isnot financially feasible for the brands to make suchinvestments.”

PVH Corp., which owns the Tommy Hilfiger brand, and Germanretailer Tchibo signed the memorandum earlier this year. Gap hadbeen in negotiations to sign the agreement.

The retailer eventually declined, objecting to higher prices,publicly disclosing Bangladesh factories and to making thememorandum contractually enforceable, said Scott Nova, executivedirector of the Washington-based Worker Rights Consortium, whoattended the meeting.

Gap decided against signing the document in October, BillChandler, a spokesman, said in a telephone interview. He declinedto discuss the negotiations.

“We made a good-faith effort to participate, and for anyagreement to be successful, it has to be acceptable to manyparties,” Chandler said. “Our investment of time shows howcommitted we are.”

Gap Plan

In October, Gap outlined a four-part plan to make factoriesBangladesh garment factories safer. It included hiring a chief firesafety inspector to inspect factories, giving suppliers as much as$20 million in capital to make safety improvements and working withthe Bangladesh and U.S. governments as well as the InternationalLabor Organization to “promote comprehensive change.”

Kevin Gardner, a Wal-Mart spokesman, declined to discuss theDhaka meeting or what was said there.

“We know that continued engagement is critical to ensure thatreliable, proactive measures are in place to reduce the chance offactory fires,” he said.

Zeldenrust called Wal-Mart's position “shocking.”

“You know it is extremely important, and they say: 'There's noway we're going to pay for that,'” said Zeldenrust, whoseAmsterdam-based organization pushes for improved working conditionsin the global garment industry.

The Nov. 24 fire at the Tazreen Fashion Ltd. factory in theoutskirts of Dhaka is being compared to such paradigm-shiftingevents as the suicides at Foxconn Technology Group, the Taiwan-based contract manufacturer that makes many of Apple Inc.'sproducts. After an outcry, the non-profit Fair Labor Associationaudited Foxconn factories in China, and the supplier vowed to makeimprovements.

Fifty percent of the Bangladesh's garment factories don't meetlegally required work safety standards and those that have improvedworking conditions have done so under pressure from Western apparelmakers, said Kalpona Akter, executive director of the BangladeshCenter for Worker Solidarity, a non-governmental organizationfounded by two former garment child workers to promote saferfactories. Bangladesh's labor law requires safety measures such asfire extinguishers and easily accessible exits at factories.

Living Hell

On Nov. 26, two days after the fatal fire at the Tazreenfactory, Akter witnessed the aftermath of a blaze at a Dhakagarment warehouse. Workers were forced to climb down a bamboo polebecause they couldn't exit through the stairs, she said. Graffition a restroom wall at the warehouse read: “Work here and your lifeis a living hell.”

Swan Group, which had operations at the building and says it hasmade garments for Foot Locker Inc., is in compliance with theworkplace safety rules, said Feroz Kobir Prodhan, the company'smanager of administration, human resources and compliance. However,the actual building is not, he said.

Many companies rely on factory audits to ferret out safetyviolations, a process some academics question because factorymanagers often know when inspectors are coming. Inspectors,moreover, tend to overlook all but the most serious problems.

“Auditing is just an information-collecting process and a prettyimperfect one because how much are you going to see on your 1- or2-day visit to the factory every six months?” said Richard Locke, aprofessor of political science and management at MIT Sloan Schoolof Management in Cambridge, Massachusetts.

Audits are useless when a contractor farms out the work toanother firm without the company's knowledge, said Timothy Lee, aformer executive with Adidas AG, who has sourced apparel fromBangladesh. After the Nov. 24 fire, both Wal-Mart and Sears saidthey had fired unauthorized suppliers.

“A lot of factories, especially during peak time, tend tosubcontract their work,” Lee said in a telephone interview. “That'sa lot of times how they get in trouble.”

Ultimately, the Bangladesh government will have to startenforcing its own laws, said Locke, who notes that workingconditions improved in China once workers began protesting.

“I'm hopeful, if for no other reason that, if Bangladesh wantsto attract foreign companies, it will do the same thing,” he said.“Otherwise they are going to lose business.”

Bloomberg News

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