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North American, European Retailers Set Five-Year Plans for Factory Safety in Bangladesh

Thursday, July 11, 2013
Sandler, Travis & Rosenberg Trade Report

An alliance of 17 retailers that account for the majority of North American apparel imports from Bangladesh announced July 10 a binding, five-year undertaking to improve factory safety conditions in that country. On July 7, a largely European coalition of trade unions and clothing brands and retailers announced their next steps to implement a similar pact.

North American Initiative. A press release from the Alliance for Bangladesh Worker Safety states that the Bangladesh Worker Safety Initiative “sets aggressive timelines and accountability for inspections, training and worker empowerment.” The alliance, which expects to add more members in the future, will seek to use this initiative to engage and partner with the U.S. and Bangladeshi governments as well as factory owners “to ensure that there is accountability among all parties and thus the opportunity for sustained and lasting change in Bangladesh.”

According to the press release, the initiative calls for inspections of all factories that conduct work with an alliance member (estimated at about 500) within the first year. Inspection results will be shared anonymously among alliance members and transparently communicated to factory owners, workers and the government so that factories with dangerous safety conditions are immediately identified. Inspectors will be empowered to call for factory closure and evacuation of workers if necessary. Alliance members have agreed to work only with factories that ensure a safe working environment and to refuse to source from any factory they determine is unsafe.

Other components of the initiative include the following.

- Common safety standards will be developed and in place by October.

- All alliance factories will be required to actively support the democratic election and successful operation of worker participation committees, which will provide a forum for workers to raise safety and workplace concerns without fear of retaliation.

- An anonymous worker hotline using mobile technology and administered by a third party will be established by November.

- A nine-member board of directors (four retailers, four stakeholders and an independent chair) will govern the alliance and ensure that retailer members follow through on their commitments.

- The board of directors will make public semiannual reports of on the progress of the alliance programs in meeting the initiative’s objectives.

- Each alliance member will contribute a specific amount to support the initiative that is based on the amount of production each company has in Bangladesh. The safety fund is currently $42 million and growing, 10% of the fund will be designated to assist workers temporarily displaced by factory improvements or in the event of a factory closure for safety reasons.

- To ensure that lasting infrastructure and industry improvements are realized, the alliance will work with the government of Bangladesh and its industry groups, worker rights organizations and others who support safer factory working conditions to coordinate the initiative’s activities with the National Tripartite Plan of Action on Fire Safety for the ready-made garment sector in Bangladesh.

European Initiative. On July 7, a coalition of primarily European trade unions and clothing brands and retailers announced a plan for implementing their binding five-year Accord on Fire and Building Safety in Bangladesh. According to a press release, this accord will cover all factories producing for signatory brands, which will be opened up for safety inspections and further measures depending on the factory’s significance to the brand. Signatory brands and retailers guarantee that in every case in which an unsafe factory is found, funds will be available for the necessary safety upgrades. Signatories have also committed to staying in Bangladesh for at least the first two years of the accord.

Under the implementation plan, initial inspections to identify serious hazards and the need for urgent repairs at every covered factory will be completed within nine months. The information gathered through these inspections will be used to prioritize factories for more in-depth analysis and additional remedial measures covering a broader range of issues and involving more comprehensive renovations, repairs and retrofitting.

The plan also includes (1) a process by which, during the initial inspection period, companies or workers may identify factory buildings that pose a serious security risk and require immediate remedial action; (2) an ongoing effort to hire individuals to fill the positions of chief safety inspector, who will oversee an inspectorate capable of evaluating fire and electrical safety, structural safety and worker safety in Bangladeshi garment factories that supply the signatories, and executive director, who among other things will be primarily responsible for relationships with international institutions, governments and partners; and (3) the establishment of a steering committee to govern the accord, which has equal representation of signatory companies and factory worker unions.

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