Li & Fung: the garment industry’s sweatshop locator

The New York Times shines a light on a company that is not exactly looking for the limelight:

112 workers died in a Li&Fung-sourced factory in Dhaka

Li & Fung — the most important company that most American shoppers have never heard of — has long been on the cutting edge of globalization, chasing cheap labor to garment factories first in China, then elsewhere in Asia, including Bangladesh.

As the world’s largest sourcing and logistics company, Li & Fung plays matchmaker between poor countries’ factories and affluent countries’ vendors, finding the lowest-cost workers, haggling over prices and handling the logistics for roughly a third of the retailers found in the typical American shopping mall, including Sears, Macy’s, JCPenney and Kohl’s. 

The business has been tied to labor violations and deadly accidents in several countries. It has also been faulted as failing to properly investigate complaints about conditions at factories, including one in Cambodia where hundreds of workers were sickened, and accused of cheating laborers of wages in Turkey.  ...

Such episodes highlight the often hidden role played by sourcing companies in trying to feed the West’s seemingly insatiable demands for ever cheaper merchandise. Worker advocates say that Li & Fung and others make accountability more difficult by adding a layer of insulation between reputation-conscious retailers and often poorly treated workers, allowing businesses to avoid bad publicity and legal liability when things go wrong. 

Sourcing companies face an inherent conflict: they are expected to find low-cost factories for clients, but also to blow the whistle if the factories violate safety standards. Some critics say that the scale of Li & Fung’s operations and the speed at which it shifts production from one site to another give owners less incentive to improve their factories and make it difficult for Li & Fung to deliver on its pledges of carefully vetting its suppliers. ...

Li & Fung and other sourcing companies track harvesting schedules because many factories rely on migrant workers. They watch weather reports to advise drivers which trucks should be outfitted with roof-mounted dinghies for use when roads wash out. In Dhaka, Bangladesh’s capital, sourcing agents check in daily with political and labor officials who can offer warnings about demonstrations that could shut down production.