Major Retailers Join Bangladesh Safety Plan
Published: May 13, 2013
Three weeks after a building collapse in Bangladesh that killed more than 1,100 workers, several of the world’s largest apparel companies – including the retailing giant H&M and Inditex, owner of the Zara chain — agreed on Monday to sign a far-reaching and legally binding plan that requires retailers to help finance fire safety and building improvements in the factories they use in Bangladesh.
Consumer and labor groups hailed the move by Sweden-based H&M – which is the largest purchaser of garments from Bangladesh – as an important step toward improving factory safety in Bangladesh, saying it would increase pressure on other Western retailers and apparel brands to do likewise.
Within hours of H&M’s Monday statement, C&A of the Netherlands and two British retailers, Primark and Tesco, also joined in.
The factory safety agreement calls for independent, rigorous factory safety inspections with public reports and mandatory repairs and renovations underwritten by Western retailers. A legally enforceable contract, it also calls for retailers to stop doing business with any factory that refuses to make necessary safety improvements, and for workers and their unions to have a substantial voice in factory safety.
PVH, the parent company of Calvin Klein, Tommy Hilfiger and Izod, also said it would sign on, an expanded version of an earlier proposal that PVH was one of two companies to sign. The new plan lasts five years, the previous one two years.
Ever since the collapse of the Rana Plaza building on April 24 on the outskirts of Dhaka, Bangladesh’s capital, H&M, Wal-Mart, Gap and other companies have faced intense pressure to sign the agreement. Until Monday, only PVH and Tchibo, a German retailer, had.
In announcing its move, H&M said that “in order to make an impact and be sustainable,” the agreement “would need a broad coalition of brands.” A company statement said the agreement committed a company to the goal of a safe and sustainable garment industry in Bangladesh “in which no worker needs to fear fires, building collapses or other accidents that could be prevented with reasonable health and safety measures.”
“Fire and building safety are extremely important issues for us and we put a lot of effort and resources within this area,” said Helena Helmersson, head of sustainability at the retailer. “With this commitment we can now influence even more in this issue. We hope for a broad coalition of signatures in order for the agreement to work effectively on ground.”
H&M and Gap were the target of an online petition that obtained more than 900,000 signatures and was sponsored by Avaaz, a human rights group. The petition said, “Your companies and other multinationals profit from cheap labor, and can do much more to reduce the dangers of the places where your products are made.”
“H&M’s decision to sign the accord is crucial,” said Scott Nova, executive director of the Worker Rights Consortium, a Washington-based factory monitoring group backed by 175 American colleges and universities. “They are the single largest producer of apparel in Bangladesh, ahead even of Wal-Mart. This accord now has tremendous momentum.”
PVH also said on Monday that it would contribute $2.5 million to underwrite factory safety improvements as part of the new plan.
Gap has resisted signing on, objecting to its legally binding nature and saying it was already doing a lot on its own, having hired a fire inspector and promised $22 million in loans for factory improvements.
Bangladeshi labor groups that have sifted through the Rana Plaza rubble have not found any evidence that H&M or Gap had garments made at any of the five factories in the building.
But numerous investor, religious, consumer and labor groups are pressing other companies known to have obtained apparel from the factories there – Benetton, Cato Fashions, the Children’s Place, el Corte Ingles, Loblaws and Primark – to sign on to the safety plan. Primark, which had acknowledged that one of its suppliers had occupied the second floor of the eight-story building, had already pledged to compensate victims who worked for its supplier and their families.
Bangladesh is the world’s second-largest apparel exporter, after China, and also has the lowest minimum wage in the world — $37 a month. Its low wages and lack of regulation have helped it attract billions of dollars in orders from Western retailers and apparel brands.
On Sunday, the Bangladeshi textiles minister, Abdul Latif Siddiky, said the government planned to raise the minimum wage for the nation’s more than three million garment workers.
Over the last week, H&M was in intense negotiations on the plan with officials from IndustriALL Global Union, a federation of 50 million workers from 140 countries and from UNI Global Union, a federation of 20 million service sector workers.
In a meeting sponsored by the German government that H&M, Wal-Mart and other retailers held with IndustriALL and other labor and nongovernment organizations two weeks ago, IndustriALL set a deadline of this Wednesday for retailers to sign on to what has often been called the PVH-Tchibo plan.