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Loblaw & Other Retailers Sign Bangladesh Fire & Building Safety Deal
May 15, 2013
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Canada's Loblaw Inc. is being praised today for signing on to an international agreement to improve fire and building safety in Bangladesh.

The pact is designed to try to prevent another disaster like the building collapse last month, that killed more than 1,100 people.

Of course, Loblaw owns the Joe Fresh brand of clothing - which had some of its garments being made inside the building.

Under the 5-year agreement, (aka the Accord on Fire and Building Safety), Loblaw and other Western retailers will pay up to $500,000 each year to improve factory conditions in Bangladesh.

The deal also requires that the companies do independent safety inspections, make their reports on factory conditions public, and cover the cost of repairs and upgrades.

It also calls for them to stop doing business with any factory that doesn't comply and to give workers and their unions a voice in factory safety.

"This decision reflects the company's pledge to stay in Bangladesh and underscores its firm belief that active collaboration by retail and manufacturing industries, government and non-governmental organization, is critical to driving effective and lasting change in Bangladesh," Loblaw said in a statement.

"The accord aligns with and addresses the company's commitments to a new standard that all of its control brand products must be made in facilities that respect local construction and building codes."

Loblaw also reiterated its plan to have its own people on the ground in Bangladesh who will report directly to the company.

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Workers rights groups, who have been pushing for the agreement, are applauding the move.

"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 Worker Rights Consortium, told the Associated Press.

"I think they have really stepped up to the plate," Kevin Thomas, director of advocacy for the Maquila Solidarity Network, told the Toronto Star.

Several other big retailers have also signed on including Benetton based in Italy, Sweden's H&M, C&A of the Netherlands, Ireland's Primark, England's Tesco, and Spain's Inditex, which owns Zara.

Two other retailers - America's PVH, which makes clothes under the Calvin Klein, Tommy Hilfiger and Izod brands, and Germany's Tchibo signed the deal last year.

Both Loblaw and Primark have acknowledged their clothes were being made in the collapsed building and have promised to compensate workers and their families.

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Wal-Mart, the world's largest retailer, and The Gap have not signed on.

Over the next six months, Wal-Mart said it will carry out in-depth safety inspections at all 279 factories in Bangladesh that make its products, and will make the results public.

A spokesperson for the Gap said the company has been in talks to improve factory conditions in Bangladesh for two years, and plans to spend $22 million on upgrades.

"We chose this as a first step because we knew this is where we could have immediate, direct impact," the Gap said in a statement. It also said it will sign on if changes are made to how disputes are settled in court.

After the disaster, Walt Disney Co. said it would stop production of its products in Bangladesh. But all of the above retailers said they plan to stay and improve things. Other companies including The Children's Place, Mango, J.C. Penney, and Sears have said the same.

Bangladesh has 3.6 million garment workers, and 5,000 clothing factories - making it the third-biggest exporter of clothes in the world, after China and Italy.

The industry is worth $20 billion, but the minimum wage for workers is just $38 a month - enabling Western retailers to sell their clothes cheaper here.

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The Bangladeshi government has promised to raise the minimum wage within three months, based on recommendations from factory owners, workers and government officials. It also has promised improvements in safety and agreed to let workers to form unions without asking the factory owners.

Union leaders responded cautiously.

"In the past, whenever workers tried to form associations, they were subjected to beatings and harassment. The owners did not hesitate to fire such workers," said Kalpana Akter of the Bangladesh Centre for Workers Solidarity.

On Monday night, officials at the collapsed building site called off the search for bodies, with the official number of dead at 1,127.

Since 2005, at least 1,800 workers have been killed in Bangladesh's garment industry in factory fires and building collapses, according to the International Labor Rights Forum.

Related stories

Loblaw & Joe Fresh Say They'll Be A "Force For Good" In Bangladesh

Fast Fashion, Western Retailers & The Bangladesh Building Collapse

Woman Found Alive After 17 Days In Rubble Of Collapsed Building In Bangladesh

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