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Disney Pulls Out of Bangladesh, Pakistan Over Factory Safety Concerns

In a move sure to prove historically important for the evolving world of social compliance, the Walt Disney Company announced it will stop all production of branded merchandise in Bangladesh and Pakistan.

The mega-retailer dispatched a letter to all of its vendors and licensees to inform them that it intends to pull out of all “highest-risk countries” also including Ecuador, Venezuela and Belarus by April 2014. All in all, Disney is exiting forty-four countries.In a press release the company, referring to its International Labor Standards Program, said, “As part of an on-going review of our policies and procedures, we have made adjustments to our sourcing guidelines that will help us better manage the challenges associated with a complex global supply chain and meet our ILS objectives.” The statement continued, “We have decided to consolidate production of Disney-branded products in a more limited number of Permitted Sourcing Countries and have instructed our licensees and vendors to transition the production of Disney-branded goods out of the highest-risk countries.”

Ever since the deadly fire at the Tazreen Fashions Factory in Bangladesh that killed 112 workers in November 2013, Disney has been considering the dramatic repositioning of its manufacturing destinations, particularly with respect to its apparel lines. Bob Chapek, president of Disney Consumer Products, said, “After much thought and discussion we felt this was the most responsible way to manage the challenges associated with our supply chain.”

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While less than 1 percent of the Disney’s factories are located in Bangladesh, the retailer’s decision is sure to draw attention since it is the first company to completely pull out of the country citing issues of factory safety and compliance. According to Disney spokesperson Tasia Filippatos, the company based its decision on a recently issued World Bank report that appraises the moral environments of countries focusing on issues like governmental accountability, corruption, violence, labor conditions and wages.

Disney, though, will continue to manufacture its merchandise in other developing countries infamously suspect regarding compliance like Haiti and Cambodia. However, the company promises it will only work within those countries in partnership with the Better Work program, run by the International Labor Organization. Filippatos said Disney would consider returning its production to Bangladesh, or any of the other countries it pulled out of, if they agreed to work directly with the Better Work program.

Some experts believe Disney’s decision could function as a lightning rod for compliance, electrifying an already vigorous social movement. Last week, a group of major retailers including H&M, Walmart, and the Gap met with nongovernmental organizations in Frankfurt to strategize about future compliance initiatives. Also, Walmart and retailer Joe Fresh participated in a meeting last week conducted by the Retail Council of Canada to discuss similar issues.