- Six years ago, a factory building outside Bangladesh’s capital city collapsed, killing more than 1,100 people trapped inside.
- In the wake of the tragedy, some of the world’s biggest retailers established groups that were set up to inspect factories in Bangladesh and prevent disasters like this from happening again.
- Any factories that didn’t meet safety requirements were blacklisted by these groups and companies that were members were expected not to source items from there.
- But a new investigation from The Wall Street Journal found that items sold on Amazon, Walmart, and Target were produced in blacklisted factories in Bangladesh. Amazon is not a member of the groups, but Walmart and Target are.
- These items were acquired through wholesalers or listed on their sites by third-party sellers.
- Read The Wall Street Journal’s full report here.
- Visit Business Insider’s homepage for more stories.
It’s been just over six years since a factory building outside Bangladesh’s capital city collapsed, killing more than 1,100 people inside. In the months that followed, some of the world’s biggest retailers including Walmart, Target, H&M, and Gap took action and established two organizations tasked with inspecting factories in the country with the goal of preventing disasters like this from happening again.
Factories that didn’t meet safety requirements were blacklisted by these groups and the members were expected not to source items from there.
But a new investigation from The Wall Street Journal’s Justin Scheck, Jon Emont, and Alexandra Berzon revealed that despite these measures being put in place, items produced in these blacklisted factories in Bangladesh have still found their way on to Walmart and Target’s websites, along with Amazon, although Amazon is not a member of the two organizations inspecting the factories.
The Journal examined shipping records along with information on these retailers’ websites and factory inspection reports to identify problematic garments.
It found that items were either bought by wholesalers and sold on to Amazon and Walmart or listed with third-party sellers on their marketplaces. 67 banned factories had items listed on Amazon, 33 on Walmart, and one on Target.
A spokesperson for Amazon told The Journal that “it inspects factories that supply its own brands to ensure they are in line with international safety standards similar to those of the safety-monitoring groups.” The Journal did not find that any items from Amazon-owned brands were made in blacklisted factories.
The spokesperson also said that it “does not inspect the factories that it buys clothes from its wholesalers or that come from third-party sellers but it requires these parties to adhere to its safety standards.”
A spokesperson for Walmart said in a statement emailed to Business Insider that suppliers must comply with its Standards for Suppliers. This includes, “the requirement to source from factories that are safe and otherwise meet our high expectations in accordance with our Standards.”
Amazon, Walmart, and Target have since removed the clothing that The Journal found in its investigation. Business Insider reached out to Amazon and Target for more details but did not immediately hear back.
Faiaz Rahman, director of a Bangladeshi manufacturing group called Urmi Group, told the Journal that when he started selling clothing directly on Amazon in February he was not asked to provide any “safety-certification information.”
“Amazon is just the platform,” he told the Journal. “Anyone can sell anything.”
Rahman was only asked for safety information when he joined a “separate program to sell clothing in a partnership with Amazon that gives Amazon the right to buy the brand,” The Journal added.
A sprawling marketplace
This investigation is another example of the issues that have sprung up around Amazon’s sprawling third-party marketplace. This has become a more controversial topic of late as the marketplace continues to grow and outpace its first-party business.
In September, a Wall Street Journal report revealed that thousands of items that were being sold by third-party sellers on Amazon’s site were not deemed safe by regulators. Most concerningly, these items included children’s toys and medication for adults.
Then, on Sunday, CNBC reported that Amazon customers were complaining about being shipped out-of-date or moldy food by third-party sellers.
While Amazon removed items after being alerted to the issue, the lack of proactive policing is still raising concerns amongst its critics.