corporate citizenship

US Retailers Detail Implementation of Controversial Bangladesh Safety Plan

Posted by Sheila Shayon on August 21, 2013 12:54 PM

Walmart, Gap and other US retailers met yesterday in Chicago to implement their controversial, independent Bangladesh factory safety plan that was created after multiple factory accidents, including the Rana Plaza collapse in April that claimed more than 1,100 workers, spurred global outrage. 

20 US retailers including Macy's and Target, as well as new signatories Costco, Intradeco Apparel and Jordache Enterprises make up the Alliance for Bangladesh Worker Safety. The group, which formed a separate safety plan from the European retailer-dominated Accord on Bangladesh Building and Fire Safety, has pledged to have safety standards in place by Sept. 10, and has reportedly already dispursed $45 million in funds in part to hire safety inspection staff in Bangladesh.

The five-year, voluntary plan agrees to train workers and inspect factories while requiring Bangladesh factory owners to pay for safety renovations, though the Alliance will provide $100 million in low-cost loans.

The plan has come under fire due to its non-binding nature—an attribute that was top-of-mind in the European-based agreement, which was signed by over 70 global retailers including H&M, Inditex and Primark.

The US Alliance named Ellen Tauscher, a former congresswoman and member of the US State Department, chairwoman, along with an eight-member board including four company representatives from Target, Walmart, Gap and VF Corp., former US Ambassador to Bangladesh Jim Moriarty, fire-safety consultant Randy Tucker, Muhammad Rumee Ali, executive director of nongovernmental organization BRAC Bank Ltd., and Mohammad Atiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association.

"It's a huge challenge, and it's going to take lots and lots of people to make it happen," said Tauscher, the San Francisco Gate reports. "It involves working with everyone. There's no room for competition here." But there's plenty of room for critics. 

Labor activists and workers rights groups say the Alliance’s plan is less effective than the legally-binding Accord, which will repare and renovate some 5,000 Bangladeshi garment factories, with shortfalls punishable by law. 

"They are essentially asking the companies and factory owners to regulate themselves," Scott Nova, executive director of Worker Rights Consortium, who helped draft the Accord, told the Wall Street Journal. "They want people to see this as an alternative plan, but it's no different than what companies have been doing without success for decades."

But Tauscher disagrees. "It's really a model for future industries and this industry to do this kind of work with other countries to uplift worker safety and many other issues for workers around the world," she said. "This is a framework that is very new and it is a challenging paradigm, but I think everyone is aware of this and knows that it is very worthwhile and that it is very important to do." 

Against the backdrop of corporations and governments trying to sort out the ecosystem that feeds the insatiable European and American fashion appetites, Bangladeshi garment workers remain the lowest-paid in the world, with an average salary of $38 per month. Since the Rana Plaza disaster, workers have protested wage rates and unfair pay practices, to which the Bangladeshi government has said it is taking all arguments into account. According to a United Nations study, in order for a Bangladesh family to have access to the minimum caloric requirements, minimum wage must be no less than $75 per month. 

But with factory bosses threatening to withold pay from protesters, and global retailers reconsidering their relationships with the country's main industry, Bangladesh may face a decline in exports in the future. The government is reportedly exploring markets in China, Japan, Africa and South America in order to reduce dependency on US and European clients, especially after the country was stripped of tax-based trade privileges. 

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