Mega tragedies

In future, besides reminding us all of the death of the Quaid, September 11, will also remind us of two mega tragedies in the industrial sector, one each in Lahore and Karachi; by September 14, combined death toll in them was 314, bodies mutilated beyond recognition were 82, and scores of workers were unaccounted for. Soon after the Karachi tragedy - the worst in Pakistan's industrial history - Sindh High Court (SHC) took a suo motu notice thereof and ordered a judicial probe. Thereafter, the Sindh government too ordered an inquiry into the disaster. Not surprisingly, the factory owner was untraceable.
But to everyone's surprise, on September 14, the factory owner had obtained an 8-day bail from the Larkana bench of the SHC. Talking to a TV channel, he said he was 'advised' (by who?) to leave the factory premises (and to come to Larkana?). He said, the fire started in the warehouse and despite his frantic efforts, just one fire tender arrived on the scene after an hour and a half. So, the fire became uncontrollable, but said nothing about the factory's own (non-existent?) fire-fighting arrangements.
The New York Times quoted a statement by the Federal Adviser on Textiles wherein he said that after the first fire tender reached the scene, fire-fighters noted that the factory manager ordered the factory gates to be closed, "not allowing anyone to leave without checking."
According to EOBI, only 254 of the hundreds of workers at the gutted factory in Karachi were on its payroll; impliedly, the rest were contract employees of 'worker suppliers' and thus not entitled to, health and disability insurance, provident fund, etc. But blaming factory owners passes the buck. True, today's factory owners don't invest either in their workers or in requisite fire-fighting equipment because "it isn't necessary", but should the regulators permit this? What did they do after the recent huge fire in an ill-administered paint-manufacturing factory in Karachi?
The explanations of these failures is that the regulatory authority (Karachi Building Control Authority?) that approved the factory design either lacks the expertise to assess the risks that a defective design foretells, or approves plans in exchange for illegal benefits.
Both explanations expose regulatory lapses (of KBCA, Department of Labour, and Civil Defence) that led to the latest disaster and death of innocent workers, but the only guilty-conscious state functionary who resigned was Sindh's Minister of Industries.
The disasters in Lahore and Karachi highlighted yet again a slide in regulation, ie, bureaucracy sliding into a bottomless pit of irresponsibility, neglect of its moral and official duties, and corrupt practices, that place petty self-interests above national interest.
Worse still, the disasters expose a lack of responsibility as well as accountability skills (or their sidelining for political reasons) among the parliamentarians. That Pakistan still relies on the British era Factory Act of 1937, although things changed radically since 1937, is proof thereof.
Shouldn't the regulator approving the construction plans of factory premises ensure that the structures being built comply with the plans? We now know that the Karachi factory's premises didn't conform to the approved design because the premises contained a full un-approved floor. What is the role of the inspectors of the regulatory authorities? Wasn't this ill-designed factory operating for years? How come its owners weren't penalised for violating the construction plan? Was a waiver thereof issued later on, and if so, in what grounds?
Only periodic bribing of the inspectors could permit continuation of this violation. A shocking discovery is that, in 2003, KESC inspectors who check cable networks in factories to prevent frequent fires from short circuiting, were 'unofficially' asked to stop such inspections.
In factories, especially those consuming inflammable items as raw material or for running their production plants, fire-fighting equipment and emergency fire exits should not be just adequate, but in working order all the time, and via periodic fire-fighting drills employees explained how to react to a fire emergency.
The expectation that factory owners will do so voluntarily is overoptimistic; regulators must ensure it. But the reality is that even retail markets with scores of shops selling inflammable items don't have any fire-fighting gadgetry, not even hand-held fire extinguishers, let alone hydrants.
All this goes on despite repeated instances of destructive fires, but if regulators' attitude remains the same as exposed by such tragedies, most markets, factories and warehouses may be ticking bombs besides being easy targets for the terrorists - possibility in the Karachi tragedy.
While the government carries bulk of the responsibility for the disasters, banks financing such businesses share that blame because, prior to lending to industrial units, banks are obliged to verify that factory owners comply with all regulatory requirements.
That factory design is regulation compliant, installed fire-fighting equipment and alarms are adequate for the factory size and spread out, fire-fighting equipment is functional all the time, emergency fire exits are adequate and open quickly, and the practice of holding regular fire-fighting drills is verifiable.
Beginning 2000, banks began out-sourcing the vital factory inspection function. Many frontline bankers now don't know what to check and verify in this context. It is worth finding out what actions banks lending to the factory in Karachi had taken after an earlier fire in the factory.
The banking sector regulator must re-examine its policy on permitting out-sourcing of vital banking functions because this relaxation has created serious gaps in the skills of the frontline bankers. The proof thereof is the 'NPLs mountain' that is now as high as Rs 650 billion. While the inquiries ordered by SHC and Sindh government may take time to establish the role of the regulatory agencies - Civil Defence, emergencies services, and SITE, one fact has clearly been established: no regulatory authority was performing its mandated role.
It is time for action: exemplary punishment to those responsible for these disasters, purpose-oriented revision of the Factory Act 1937, imposition of stiff regulations, tough supervision of factory inspectors, and a warning to the chambers of commerce to devise and credibly implement self-regulatory codes in this context. As for the survivors of the hundreds who died in these two disasters, the harshest reality is surviving without the incomes that the diseased used to earn, but all that the National Trade Union Federation has demanded is that each family be paid Rs 1 million.
The sensible course is to help the survivors invest these funds in long term debt securities that provide them a monthly income close to what their diseased family members were earning. Giving hard cash to these families is wrong; they may either waste it, or be robbed by their deceptive 'well-wishers'.