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brands under fire

H&M, Primark Sign Bangladesh Safety Agreement; Gap Says It's Next [Update]

Posted by Sheila Shayon on May 13, 2013 06:39 PM

The rescue efforts in Savar, Bangladesh have officially been turned over to recovery as the death toll surpasses 1,100 in what has become the worst accident in the history of the garment industry. But 20 days later, it seems that progress and change is beginning to emerge from the rubble of a decrepit industry. 

The Bangladeshi government has agreed to let garment workers form trade unions without the permission of factory owners—a breakthrough in workers' rights in a de-regulated country, where garment factories were shut down this week following worker unrest over wages and conditions.

The proposed  safety plan, backed by a coalition of labor groups, calls for independent inspections of factories and a legally binding fire and building safety plan requiring retailers to help pay for improvements to factory safety and is an amendment to the 2006 Labor Act lifting restrictions on forming trade unions in most industries.

The pact also calls for changes regarding severance payments, welfare fund payments, management practices and payment and banking standards. In what could be a game-changing announcement, Swedish retailer H&M announced Monday that it will sign the binding agreement.

“With this commitment we can now influence even more in this issue," said Helena Helmersson, Head of Sustainability for H&M, in a statement posted on the fast-fashion retailer's corporate website. “We hope for a broad coalition of signatures in order for the agreement to work effectively on ground.”  

The agreement has also been signed by PVH, owner of Tommy Hilfiger and Calvin Klein, German retailer Tchibo and Inditex, parent company of Zara and C&A of the Netherlands. PVH has said it will contribute $2.5 million to underwrite factory safety improvements, as well, but the announcement by H&M, the largest producer of apparel in Bangladesh, is likely to carry more influence in convincing other retailers to sign-on.

Soon after H&M's announcement, UK retailer Primark signed on to the agreement and reaffirmed its pledge to compensate victims of the Rana Plaza factory building collapse after being called out by NGOs for moving too slowly. Activists, investors, consumer and labor groups continue to pressure Benetton, Cato Fashions, The Children’s Place, el Corte Ingles, Canada's Loblaws (owner of Joe Fresh), and Gap Inc. to sign the safety plan despite resistance.

"This agreement is exactly what is needed to finally bring an end to the epidemic of fire and building disasters that have taken so many lives in the garment industry in Bangladesh," Scott Nova, executive director of the non-profit Workers Rights Consortium told USA Today. Nova is calling on every brand and retailer producing in Bangladesh to sign the safety accord by May 15th.

Gap Inc. has so far objected to the accord's binding nature and said they’ve hired a fire inspector and promised $22 million for factory improvements. But in a statement today, the company says it's ready to sign on—provided a key clause about resolving disputes in court is renegotiated, as Buzzfeed notes:

In a statement released today, Gap said that it is ready to sign the agreement on the condition that the portion of the agreement stipulating that disputes be resolved in courts is renegotiated. “We’re pleased that an accord is within reach, and Gap Inc. is ready to sign on today with a modification to a single area – how disputes are resolved in the courts,” said Eva Sage-Gavin, executive vice president of global human resources and corporate affairs. “This proposal is on the table right now with the parties involved. With this single change, this global, historic agreement can move forward with a group of all retailers, not just those based in Europe.”

Estimates on the cost of bringing Bangladeshi factories up to Western standards are between $1.5 billion to $3 billion according to the Worker Rights Consortium. Put into perspective, “If the money was spent over five years, it would be 1.5 to 3 percent of the $95 billion expected to be spent on clothes manufacturing over that time. Put another way, it's 10 cents added onto the cost of a T-shirt.” But that added cost, as minimal as it seems, has been a main reason why major retailers like Walmart have refused to sign the agreement.

As FirstPost asks, has it taken these 1,127 deaths for retailers to find their hearts?

“The global brands have built a system designed to innoculate themselves from liability to disaster, while effectively pushing the dirty work further into the crevices of the underground economy,” writes Peter Goodman, Executive Business Editor at The Huffington Post. “Bangladesh is poor, and poverty is dangerous. But these tragedies are systemic. The factories that produce the goods we are buying are too far away and too scattered for any company to supervise. And the prices we are paying are too low.”

May 14 update: Benetton has agreed to sign the Bangladesh Accord on Fire and Building Safety, according to the Associated Press, while British retailers Tesco and Tesco and M&S have also signed on (read more on Tesco and M&S websites).

Comments

Sarah Robinson United States says:

Kudos to all the signatories; now we just need GAP and WALMART to do the right thing.

May 14, 2013 11:07 AM #

Comments are closed

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