Disney pulls out of Bangladesh factories

Posted at 12:35 PM, May 03, 2013
and last updated 2013-05-03 12:35:50-04

Some companies ending production in Bangladesh in wake of building collapseNEW YORK (CNNMoney) — The Walt Disney Company has stopped production of branded merchandise in Bangladesh, in response to the spate of fatal factory accidents.

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.

While Disney is the first brand to completely halt production in Bangladesh after the tragedies, it doesn’t come at a very big cost for the company. 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.