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Fast Retailing Sides With Gap, Wal-Mart on Safety Accord

Japan’s Fast Retailing, operators of popular retail chains Uniqlo and Theory, has declined to sign the Accord on Fire and Building Safety in Bangladesh.

The retail giant says it will perform its own safety improvement and inspections of their contracted factories, rather than sign the legally binding document, which requires companies to implement and fund specific safety measures.

“We want to first focus on what we can do right now, on our own,” Yukinhiro Nitta, the company’s head of corporate and social responsibility, told the Wall Street Journal. Fast Retailing plans to hire a Japanese auditor, who will inspect the architectural soundness of factories producing their clothing in Bangladesh, making use of ultrasound and X-ray technology to analyze construction materials and check for cracks in concrete.

Fast Retailing’s refusal to sign comes as something of a surprise, as it aligns the corporation with U.S. retailers Gap Inc, Wal-Mart, Sears, and JC Penney, all of whom have also declined. The anti-accord retailers cite, among other complaints, a “binding arbitration” clause in the accord, which potentially restricts participating companies’ rights to appeal court decisions (read the accord’s full text here).

But more than 30 European companies, including the majority of Fast Retailing’s major non-U.S. rivals, have signed the accord, notably Sweden’s H&M and Spain’s Inditex, which operates Zara.

Fast Retailing has been expanding its Uniqlo chain aggressively in recent years, opening an average of two new stores in Asia every week. Early this year, Fast Retailing announced plans to open 20 or more U.S. stores in 2014, and a goal of becoming the world’s “number one” casual clothing brand by 2020.

“We will become the overwhelming No. 1 brand in Asia, and we will continue our strategy of massive store launches and expand our territory,” Chief Executive Tadashi Yanai told reporters at a news conference in April.

But with its aggressive expansion, Fast Retailing has attracted the attention of labor activists, who claim that clothing brands based in Asia receive less national attention, and therefore less scrutiny, than U.S. companies. Fast Retailing’s decision to side with its U.S. counterparts on the Accord on Fire and Building Safety may change that tune.

According to the Wall Street Journal, Fast Retailing saw a 21% rise in the number of factories with standard violations last year.