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Retailers split over how to protect Bangladesh garment workers

A tale of two agreements in the wake of deadly factory collapse

Last Updated: Oct. 10, 2013

Since the deadly Rana Plaza garment factory collapse in Bangladesh in April, over 110 international companies have vowed to change the way they operate in the poor South Asian country. But the companies have signed onto two separate agreements and together their contracts only cover about 2,100 of the 5,000 garment factories in Bangladesh.

More than 90 companies, largely from Europe, as well as worker representatives, have signed up for the first agreement on the table, the Accord on Fire and Building Safety in Bangladesh. The 20 companies in the second agreement, the Alliance for Bangladesh Worker Safety, are predominantly American.

While the alliance says it looks forward to cooperating with the accord, even entertaining "the possibility of creating a joint board of advisors," labour supporters of the accord have been critical of the alliance, calling it "another toothless corporate auditing program," in the words of the global union, IndustriALL.

Here's a look at the two agreements.

Accord on Fire and Building Safety in Bangladesh

Text of the agreement

About 1,600

There are 91 signatories, mostly European retailers including H&M (the largest buyer of apparel from Bangladesh), Benetton and Carrefour.

Several U.S. companies are involved, including Abercrombie & Fitch, PVH (parent company of Calvin Klein and Tommy Hilfiger), Sean Jean Clothing (owned by hip-hopper Sean Combs) and American Eagle Outfitters.

Five Australian companies also signed on.

Loblaw Co., Maquila Solidarity Network

The International Labour Organization (a UN agency), two global unions (UNI and IndustriALL), and at least four Bangladeshi union federations are involved. Four labour rights organizations are "witnesses" to the accord.

A steering committee with equal representation chosen by trade union signatories and company signatories, plus a neutral chair from the International Labour Organization.

Members contribute in proportion to their garment purchases in Bangladesh, to a maximum of $500,000 per year.

An independent fire and building safety inspector will be appointed.

Full inspections for at least the most significant 65 per cent of the factories that supply each member and limited initial inspections at the others.

The inspector informs management, worker representatives, the steering committee and unions affiliated to the accord.

In situations where the employee reasonably considers the factory building or work assignment unsafe, the accord requires factories to respect the right of a worker to refuse to enter that building or refuse that assignment, without discrimination.

A complaints process will be created that works in line with a planned government-run national fire safety hotline.

It also requires health and safety committees with majority worker representation at all factories.

An "extensive fire and building safety training program" will be established.

If a factory supplying an accord member does not participate fully in inspection, remediation and health and safety, the member is required to issue a warning to the factory and then must terminate the business relationship if the supplier refuses to comply.

The steering committee is responsible for enforcing the agreement and settling disputes. Worker representatives on the committee can initiate a complaint.

The committee's decisions may be appealed to a final and binding arbitration process, and the award enforceable in a court of law in the company's home country.

Individual members may provide factories with loans, joint investments, business incentives for remediation efforts or directly pay for renovations.

(Affordable loans are difficult to secure in Bangladesh.)

Inspection reports and remediation plans will be made public within six weeks. A summary of aggregated industry compliance data will be public each on a quarterly basis.

Members will provide the steering committee with a list of subcontractors used by their suppliers.

Alliance for Bangladesh Worker Safety

Text of the agreement

Over 500

Of the 20 alliance members, 18 are American companies, including Gap, Wal-Mart, Target, Sears, Macy's, Nordstrom, J.C. Penney, L.L. Bean and Costco. Together the retailers account for the overwhelming majority of ready-made garments the U.S. imports from Bangladesh.

Canadian Tire, Hudson's Bay Co., Canadian Apparel Federation, Retail Council of Canada

Seven business associations

A board of directors with four company representatives and four stakeholder representatives, plus an independent chair.

The annual contribution, also proportional, is a maximum of $1 million. So far, the alliance has raised $42-million over five years for the worker safety fund.

Members will hire and pay for alliance-approved independent inspectors to conduct fire and building safety inspections of all their supplier factories within the first year. Follow-up inspections are planned but no timeframe is specified.

There will be spot audits of remediation efforts.

The inspector informs management, worker representatives, members through the board of directors and the local government building department.

No requirement.

A "uniform, effective and anonymous" hotline for workers will be created for reporting safety concerns.

Worker participation committees will be set up at every factory so workers can "report fire and building safety risks without risk of retaliation.

All factories must undergo certified training for fire and building safety and empowerment within the first year.

There are plans to align training programs with the accord.

Members commit to not buy from factories deemed unsafe.

The alliance requires a two-thirds majority for action against a delinquent member company, which can include getting kicked out of the agreement. The member may appeal expulsion to a binding arbitration process.

Executives from alliance members have said that under the accord, companies could be held legally and financially responsible for conditions in factories that they do not own or control.

Individual members may make available affordable loans for repairs and improvements recommended by the alliance. Over $100 million has been pledged to date.

It is developing an information-sharing platform using a tool by the U.S. non-profit, Fair Factories Clearinghouse.

It plans to publicly disclose an aggregated list of all factories supplying alliance members.

Unauthorized subcontracting is prohibited.

Garment work in Bangladesh

Bangladesh's garment industry