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Bangladesh: Alliance RMG Factories Need $150 Million for Remediation

The Alliance for Bangladesh Worker Safety announced in July that it had completed inspections at all of its 587 member factories, and now the organization says it will take $150 million to repair the safety flaws found during those inspections.

At a press conference in Bangladesh last week, the Alliance discussed its progress in terms of wage distribution and financing factory repairs, and revealed what the industry will require to become more compliant.

Alliance managing director Mesbah Rabin, said, “Alliance assessment, on average, has identified 45 kinds of faults in each garment factory, especially fire and electrical ones, and each unit needs $250,000 to carry out the remedial work,” Bangladesh’s Financial Express reported.

Remediation has so far taken place in 50 percent of its inspected garment factories and the rest remain in-process.

At some factories, structural issues were so flagrant that the Alliance ordered full or partial closures in some cases. Laborers who lost work due to remediation efforts have been compensated through a fifty-fifty arrangement between the Alliance and factory owners, where each pays two-months worth of wages.

The Alliance rolled out a 24-hour helpline for workers to report concerns in 51 of its factories so far, and has plans to increase that number to 250 factories by November.

In the last year, Rabin said Alliance member brands, including Macy’s, Gap, VF Corporation and Walmart, have increased their order volumes and raised product prices in an effort to really revamp the industry. The members have also backed over $100 million in capital for their respective supply chains, the Alliance noted in its first annual report released in July.

Rabin said the Alliance has approved a guaranteed fund worth $20 million to support factory repairs through low-cost financing, plus the $100 million from its brands, the Financial Express reported.

“As the hard work of remediation now begins, it is incumbent upon all stakeholders to do their part to ensure a safer industry for everyone,” Rabin said.