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Many US Retailers Won’t Sign Bangladesh Safety Agreement But More Than 30 European, US and Other Retailers Did

In the wake of several fatal garment factory disasters in Bangladesh, most recently the collapse of the complex at Rana Plaza, more than 30 retailers signed a legally binding, five-year fire and safety improvement agreement.

The agreement is designed to prevent recurrences of the fires and building collapses that have hit Bangladesh apparel factories.

A system of rigorous inspections of factories is a key aspect of the agreement, along with mandatory repairs and renovations, fire, safety and health training, financial support from the signers of the agreement, the guaranteed rights of workers to refuse dangerous assignments and public reports.  All of Bangladesh’s 5,000 factories are included in the agreement.

Among the first to sign the agreement were international giants Inditex, the world’s largest clothing retailer, and Swedish fashion retailer H&M, although the latter did not have contracts with any of the factories destroyed in the Rana Plaza collapse.

Also signing were C & A of the Netherlands, and the UK’s Primark and Tesco.

Major US retailers declining to sign the agreement included Wal-Mart, Gap, and Sears.

Wal-Mart and Gap, expressing the concerns of other retailers, said they didn’t want to be held liable in US legal actions if they were charged with violating the agreement.

US retailers also opposed an element of the agreement imposing binding arbitration.

Potential violations could include human rights abuses, bribery, corporal punishment, child labor, and unsafe working conditions.

Instead of signing on to the Bangladesh agreement, Wal-Mart said it would institute its own safety program and encouraged other US retailers to adopt their proposed inspection standards.

Although the new agreement could significantly improve working conditions, industry experts say the most forceful pressure for reform will come from consumers, who may not buy products they know are manufactured in sweat shops.

Accordingly, Wal-Mart said it would be more transparent about its sources.

A contrary view is also held.

A study entitled, “Sweatshop Labor is Wrong Unless the Shoes are Cute,” was recently published by Neeru Paharia, an assistant professor at the McDonough School of Business at Georgetown University.

“…the fact that retailers outsource apparel production in faraway places, makes it easier for consumers not to see the harm,” said Professor Paharia.

 

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