The May accident at a plant outside the capital city of Phnom Penh focused new scrutiny from activists and labor unions on Asia's booming garment and footwear industry, which experienced its worst disaster ever at a factory complex in Bangladesh in April. In Cambodia, where factory working conditions are poor but deadly accidents havebeen rare, the incident has reminded companies and factories of potential dangers.
Ron Pietersen, Asics's senior general manager in its global legal and compliance division, said the company might have been "naive" about suppliers in the past but that it will now take a "tougher" approach to ensure that its partners make workplace safety a priority.
Asics has become increasingly reliant on low-cost manufacturing partners. Founded in 1949 as a maker of basketball shoes in Kobe, Japan, Asics posts sales that are smaller than global heavyweights such as Nike Inc. NKE +0.33% Since 2008, under a new president, the Japanese company has increased its efforts to bolster its market share overseas—especially in the Americas.
The collapse of a mezzanine floor at Asics supplier Wing Star Shoes Co. killed a 21-year-old father of a newborn, and a woman whose identification papers at the factory indicated she was 23 but whose parents said she was 15. The accident also injured 12 people.
Mr. Pietersen said the accident caused "panic everywhere because it had never happened to us before." He said the recent accidents in Cambodia and Bangladesh have taught Asics and other companies the importance of buildings' structural integrity. Previously many companies' audits, including those of Asics, focused on working conditions, he said.
As a result of the Cambodia accident, Asics has instructed its nine supplier factories in the country to join Better Factories Cambodia, a program backed by the United Nations that monitors factories, reports on its findings and offers training for factories and workers.
Before the accident, only three of Asics's factory partners participated in the voluntary program. Wing Star, created a year and a half ago by a joint venture between an Asics subsidiary and a Taiwanese partner, wasn't among them.
Factories avoided participating because "you could simply get away with it," Mr. Pietersen said. "And that's different now."
Asics said it is committed to staying in Cambodia and working with the factories to improve conditions.
Asics and the factory where the accident occurred will pay the families of the dead workers based on 25 years of minimum-wage, inflation-adjusted salary, said David Welsh, Cambodia program director for the Solidarity Center, a nongovernmental organization affiliated with the U.S.-based AFL-CIO labor group.
Mr. Welsh, who was involved in the negotiations, said each family would receive more than double what the factory initially offered to pay in total. Asics on its website said the factory made an initial $15,500 payment to victims' families.
Neither Asics nor Mr. Welsh would discuss details of the settlement, which they said was confidential.
Mr. Welsh said the families seemed satisfied with the payment and that the settlement had set a precedent for calculating compensation for such matters in Cambodia.
Mr. Welsh called on the Cambodian government to pay the workers' families what they are owed through the recently established National Social Security Fund. He said that though the government has committed to paying the male victim's family, they have "pretty arbitrarily" said that they won't pay the dead woman's family because her father is able-bodied and not yet 55 years old.
Mr. Welsh, who remains in talks with the government, said he believed it was obligated to pay a total of nearly $30,000 to the families on top of the settlement with Asics and the factory.
A representative from Cambodia's Ministry of Labour and Vocational Training declined to comment.
The recent spate of accidents in the garment trade, especially in Bangladesh, where the April collapse of a factory complexkilled more than 1,100 people, has put pressure on Western retailers to tighten oversight of their supply chains. Sweden's Hennes & Mauritz AB HM-B.SK 0.00% and Spain's Inditex SA ITX.MC +0.15% are among the 70 apparel companies and retailers that have signed a legally binding pact that is expected to improve factory monitoring in Bangladesh.
Like Bangladesh, Cambodia has experienced rapid growth in its garment industry as apparel makers look for supply alternatives to China, where costs are rising.
—Sun Narin in Phnom Penh, Cambodia, and Mayumi Negishi in Tokyo contributed to this article.
Write to Kate O'Keeffe at Kathryn.OKeeffe@dowjones.com
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