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Bangladesh Safety Agreement Gains Traction in Europe as Gap and Walmart Push Back

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Six more firms have signed on to the new Bangladesh safety agreement, including Carrefour, Benetton, Marks & Spencer, and Spanish retailer El Corte Ingles. American brand owner PVH has signed on, but other American firms including Gap have been reluctant to do so. The plan would require rigorous independent inspections and money to pay for safety upgrades such as fire escapes, along with potentially exposing foreign firms to legal liability for safety violations.

Walmart is also unwilling to sign the new plan, saying it saying it “introduces requirements, including governance and dispute resolution mechanisms, on supply chain matters that are appropriately left to retailers, suppliers and government, and are unnecessary to achieve fire and safety goals.”

Walmart’s efforts include conducting “in-depth safety inspections at 100 percent,” of the 279 factories it uses in Bangladesh and publicizing the results on their website. They have also promised to immediately stop production at factories with safety problems and to notify factory owners and the government.

The company has already taken this unusual reporting step, informing the government of serious safety problems at three factories on Tuesday and requesting that the factories immediately cease production.

Walmart also implemented a zero-tolerance policy for subcontractors working in unapproved factories. That move followed the Tazreen Fashion fire in November where Walmart clothes were found in a factory that had been flagged by the company’s own inspectors.

New documents found in the rubble at Rana Plaza, the factory building that collapsed on April 24th, link Walmart to that disaster as well. Several photos released by the Bangladesh Center for Worker Solidarity show that a Walmart contractor from Canada was producing jeans last year at the Ether Tex factory, on the fifth floor of the building.

One document that was found at Rana Plaza detailed a purchase order by Fame Jeans, for “dark blue wash,” “skinny fit” jeans to be delivered to Wal-Mart in the fall of 2012. Another document, dated April 27, 2012, discussed pricing for five jeans styles, with prices from $3.41 to $4.50 a pair.

Wal-Mart emphasized that the documents were over a year old. “Our investigation of the Rana Plaza building site after the collapse revealed no evidence of authorized or unauthorized production at the time of the tragedy,” said Kevin Gardner, a Wal-Mart spokesman.

Alan Brandman, chief executive of Fame Jeans, told the New York Times in an interview that, “It’s very clear that Walmart did not authorize me in any capacity to work within this factory.” He blamed a “rogue employee” for placing the order without Brandman’s knowledge. He also emphasized that “no other product came out” of the factory “for us or for Walmart.”

Walmart did not dispute the validity of the documents, but did deny knowledge of the production orders. The firm followed by announcing its new safety measures.

The company’s inspection plan largely matches that of the proposed safety agreement, but Walmart does not take responsibility for paying for necessary upgrades at factories. Instead, the firm plans to cease production at facilities that need upgrades and put the onus on the Bangladesh government to ensure compliance.

Of all the companies opposed to the plan, Gap has been the most vocal. That firm is concerned that the agreement would open the door for factory workers in Bangladesh to sue American firms. It has proposed changes that would limit liability for companies that violate the plan.

Gap spokesman Bill Chandler said, “The U.S. is quite litigious. We put forward specific proposal that we thought would bring other American retailers into the fold. We thought it would be a step forward and turn it into a much more global agreement.”

Labor advocates claim that Gap’s concerns are overblown, and that the push is a backdoor attempt to make the agreement unenforceable. It removes consequences for firms that back out of the agreement. Advocates also say that Gap’s opposition is largely responsible for the failure of other American retailers to sign on to the plan.

Regardless of whether American firms get on board, the widespread European commitment will shift the landscape in Bangladesh. Europe accounts for 60% of Bangladesh apparel exporters, versus 25% for the United States.

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