Clothiers Act to Inspect Bangladeshi Factories

July 8th, 2013

A mostly European consortium of 70 retailers and apparel brands has agreed to inspect within nine months all Bangladeshi garment factories that supply the companies.

In a plan to be announced on Monday, the companies agreed that they would take responsibility and immediate action wherever serious safety problems are found. They pledged “to insure that sufficient funds are available to pay for renovations and other safety improvements.”

The companies are announcing details of their ambitious, legally binding safety plan after negotiating with labor unions and nongovernment organizations for 45 days. A plan was originally announced in mid-May, less than a month after 1,129 workers died when a factory building collapsed in Bangladesh. The number of signatories increased to 70 from 30 in mid-May, and includes H&M, Carrefour, Marks & Spencer and PVH, the parent company of Calvin Klein and Tommy Hilfiger.

Very few American companies joined the effort. Several said they disliked the plan because it was legally binding, might subject them to lawsuits and included some ill-defined potential obligations. Several European retailers and labor groups asserted that these concerns were overblown and that the Americans were mainly worried about the cost of the plan.

About 60 percent of Bangladesh’s garment exports go to Europe. About 25 percent go to the United States.

Walmart, Gap, Target and many other American retailers have instead joined an alternative plan for which they are working out details with help from former United States Senators George J. Mitchell and Olympia J. Snowe. That group said it hoped to announce details of its plan by mid-July. Critics say the United States plan will do far less to improve factory safety in Bangladesh than the European-dominated plan.

Among the few American companies that have joined the European-dominated plan are PVH, Abercrombie & Fitch and Sean John. Loblaw, a Canadian retailer that produces the Joe Fresh clothing line, has also joined.

“We’d love to have the rest of the American companies join us,” said Andy York, ethical trading manager for the N Brown Group, a British retailer.

Only a few Asian and Australian retailers have joined the effort. They include Esprit, which has financial headquarters in Hong Kong.

Under the plan, whenever inspectors find a problem immediately threatening to cause death or serious injury, the factory’s owner will be told to cease operations during investigation and repairs. The group’s new executive director is to alert Bangladeshi officials, all signatory companies and the factory’s workers about the dangers.

The plan’s signatories agreed that money to correct safety problems could come from joint investments, direct payments, negotiated commercial terms, government or donor support or any combination of these mechanisms.

“This is the only way to bring about long-term, sustainable change to the garment industry in Bangladesh,” Mr. York said.

Labor and consumer groups have pressed Western retailers to join the plan, especially after the factory collapse. A fire last November killed 112 workers in a Bangladesh factory. The plan, which many labor unions and nongovernment organizations also have signed, is called the Accord on Fire and Building Safety in Bangladesh.

To allow for inspections, the Western retailers agreed to send in the names and addresses of all the Bangladeshi factories they use by July 15. In an unusual move, the list of these factories, expected to total nearly 1,000, will be made public, as will the inspection reports. Companies often resist disclosing the names of their overseas suppliers for fear of competitors stealing them.

Inditex, the owner of the Zara apparel chain, uses 350 factories in Bangladesh, H&M 260 and C&A, a Dutch retailer, 230, said Jyrki Raina, general secretary of Industriall, a union federation with 50 million members in 140 countries.

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