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Positive News and Developments Concerning Bangladesh

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This is a follow-up to our previous commentaries in the aftermath of the tragic Rena Plaza factory building collapse in Bangladesh.  With a death toll exceeding exceeds 1100 persons, with many more with injuries, the building collapse was labeled the single largest factory tragedy in many years, and certainly the most noteworthy concerning the apparel industry.  In mid-May, we noted that  some of Europe’s largest and most agile apparel retailers agreed to sign a five-year legal agreement designed to improve safety conditions among Bangladesh garment factories.  However, due to a significant legal concern, absent from that agreement were major U.S. retailers.

This week comes word that a group of 17 American retailers, including Wal-Mart Stores, Target Corp. LL Bean  and Macy’s have signed on to a five-year agreement to help improve safety at garment factories across Bangladesh. According to a report published in the Los Angeles Times, the U.S. focused accord is separate from a legally binding plan finalized earlier this week by more than 70 mostly European companies such as H&M and Zara owner Inditex.

The U.S. based coalition would seek inspections at all member-supported factories in Bangladesh within a year.  Over the next three months, a set of safety standards will be developed and the coalition plans to set up an anonymous worker hotline by November  using mobile technology and administered by a third party. The effort is financially supported  by member companies who have provided $42 million for the initiative, with an additional $100 million in loans for plant owners to fortify their facilities and workforce. Companies are to continue contributing financial support over the next five years, based on how much product they source from Bangladesh. That, by our view, is a significant commitment.

Our previous commentaries expressed concern that global apparel retailers needed to take the collective initiative to strongly influence the fixing of both social and factory infrastructure in the country. Without the involvement of significant global retailers such as Wal-Mart, H&M and Zara, efforts to fix the poor working and factory conditions be for not. These latest announcements and actions are far more encouraging and applaud the apparel industry for taking these collective actions.

There are obvious remaining concerns that the European and U.S. industry consortiums do not conflict in a singular direction toward action, but that is workable, compared to the situation a few short months ago.  The next concerted effort now rests with the factory owners themselves, and with the government of Bangladesh, who must each collectively step-up to their responsibilities to provide safe working environments among clothing factories with an adequate wages to allow workers to adhere to a decent standard of living.

We as global consumers, continue to hold our responsibility to pay attention to where our apparel is produced and to hold retailers accountable for continuing their new efforts to correct working conditions across Bangladesh.

Bob Ferrari

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