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One US Brand is Signing the New International Safety Accord, Will More Follow?

As the new International Accord for Health and Safety in the Textile and Garment Industry prepares to announce its first tranche of signatories on Wednesday, all eyes are watching to see what American brands and retailers will do.

But the battle lines are expected to fall much as they did in the aftermath of the 2013 Rana Plaza collapse, whose horrific death toll precipitated the original Accord on Fire and Building Safety in Bangladesh. The groundbreaking agreement sought to commit Western retailers to help finance and ensure remediation work at the factories that made their clothes. Wary of the legal constraints, however, Gap, Target, Walmart and others converged around the less restrictive Alliance for Bangladesh Worker Safety, which rolled out shortly after. While the Alliance could fine or remove members that didn’t abide by its charter, it largely exempted its members from any binding obligation to pay for renovation costs.

The Accord’s detractors cited the threat of legal peril—one they felt was more pronounced in the New World than Old—as reason enough to shun the agreement. “In the United States, there’s maybe a bigger legal risk than there is in Europe,” Gap’s then-CEO Glenn Murphy said at the brand’s annual meeting that year. “If we were to sign onto something that had unlimited legal liability and risk, I think our shareholders should care about that.”

Both the Accord and Alliance were designed to conclude in 2018. To continue the pace of progress, the Accord was succeeded by a three-year Transition Accord that was then extended by another three months to allow negotiations to continue. The Alliance dissolved at the appointed time, replaced by an independent entity called Nirapon, which underwent an internal restructure following a period of suspension by the Bangladeshi high court. It has since moved its base of operations from Bangladesh to Washington, D.C.

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A spokesperson for Nirapon said it remains “active and operating” on behalf of its more than 50 brands. As part of its “guided and supported self-regulating model of safety monitoring,” it remains focused on industrial safety management, worker and managerial training and the ongoing maintenance of 500-plus factories that have been remediated against a technical corrective action plan, which it refers to as “CAP closed” facilities.

Calvin Klein and Tommy Hilfiger owner PVH Corp., one of the few U.S. companies to back the original Accord, told Sourcing Journal that it intends to sign the new agreement. Alliance signatories VF Corp., which owns Timberland and The North Face, and Walmart, said they will continue to rely on Nirapon.

“The health and safety of all workers is a societal imperative,” a Walmart spokesperson told Sourcing Journal. “Walmart expects our suppliers to provide a safe working environment and adhere to the requirements outlined in our standards for suppliers. We also expect our suppliers to cascade these requirements throughout their supply chains. Walmart continues to prioritize safety in Bangladesh, and along with more than 50 other brands and retailers, relies on Nirapon for monitoring safety at our suppliers’ facilities. Nirapon focuses on maintaining the progress made through the Alliance for Bangladesh Worker Safety and other safety initiatives. As such, Walmart does not plan to join the new Accord.”

A representative from Patagonia, which works with a single unit in Bangladesh, said that it will “remain supportive of the Accord’s efforts while maintaining our non-signatory status.” KSL, the factory it contracts, provides benefits to employees “well beyond” what Bangladesh law requires and has passed all inspections required by the Accord and the Fair Labor Association accredited monitoring program, the brand added.

Other companies, including American Eagle Outfitters, Abercrombie & Fitch, Fruit of the Loom, Gap, Target and The Children’s Place did not respond to requests for comment.

Labor campaigners have hoped that the International Accord would be more palatable to U.S. retailers. For one thing, the agreement is valid for 26 months—or a little over two years—compared with the original Accord’s five. Signing the agreement, they say, is a also quick way to demonstrate a company’s dedication to human-rights due diligence, which is increasingly being legislated. Plus, the model has proven to work: The Accord has helped transform Bangladesh’s once accident-riddled garment industry—the world’s third-largest exporter of clothing after China and Vietnam—into a North Star for safety and reliability. With its expanded scope, it could do the same for Egypt, India, Pakistan and more.

Other initiatives have worked to improve safety conditions in countries beyond the borders of Bangladesh. Before the pandemic, Dutch sustainable trade initiative IDH established the Life and Building Safety Initiative, or LABS, which is running in India and Vietnam. Gap, Target, PVH Corp. and Walmart are supporters. In early 2022, the program will extend its operations into Cambodia, building upon the “learnings and experiences” from Bangladesh and identifying and remediating the “most pressing risks” related to fire, electrical and structural building safety and evacuation.

“Aimed at improving worker safety in the apparel and footwear industries, LABS effectively identifies and mitigates the potential risks related to fire, electrical and structural building safety and evacuation,” LABS spokesperson Pramit Chanda said at the program‘s launch in 2019. “LABS is a coherent and consistent worker-safety program to assess factories and provide a framework for monitoring, mitigation and remediation.”

But labor groups have criticized LABS for including neither union participation nor binding mechanisms that hold participating members accountable. Resources necessary for transparent communication, such as standards and factory assessments, they said, are walled off in a members-only part of its website.

“LABS’ program of inspecting factories without ultimately ensuring that the found safety risks are addressed, is a disaster waiting to happen,” Ineke Zeldenrust, international coordinator at the Clean Clothes Campaign, said in 2019. “The Bangladesh Accord is a carefully designed package of measures that circumvents the many flaws of the corporate social auditing system. Just shopping some elements from it will render the result meaningless. A safety initiative without the same level of worker participation, transparency and binding and enforceable elements is only perpetuating business-driven initiatives of the past that failed to prevent thousands of worker deaths.”

Tensions in Bangladesh

Back in Bangladesh, the work of monitoring and inspecting factories has ceded since 2019 to the Ready-made Garments Sustainability Council, a tripartite national body that features equal participation from factory owners, multinational brands and workers’ unions and was funded through its first year by signatory brands of the Accord.

Members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the country’s largest trade group for apparel manufacturers, have long bristled at what they consider outsized interference from a foreign body—the Accord Secretariat is based in the Netherlands—that doesn’t include them in discussions.

The RSC, on the other hand, is “licensed by the government and will not fall prey to any external prescription,” Rubana Huq, managing director of the Mohammadi Group and former president of the BGMEA, told Sourcing Journal. A few have gone so far as to call the Accord a form of neocolonialism, one that doesn’t appear to appreciate that the financial burden of safety improvements largely falls on the shoulders of already-squeezed factories.

In a statement released this week, the BMGEA said it’s “misleading” to claim that the International Accord is being implemented by the RSC in Bangladesh. “The Board of the RSC is only accountable to its stakeholders and works through a unique consensual decision-making process, whereby no two groups may influence operations,” it said.

“It should be clear to all constituents and stakeholders, that there is no licensed entity, apart from the RSC working in this sector,” the BGMEA added. “The former Stitching Bangladesh Accord Foundation and the proposed International Accord for Health & Safety in the Textile and Garment Industry Foundation are separate entities to the RSC and will not have any function in Bangladesh, directly or indirectly, unless expressly permitted by the Government of Bangladesh.”

According to International Accord, only brands that sign the new agreement will be able to avail themselves of services provided by the RSC. European retailers Bestseller, C&A, H&M and Zara owner Inditex confirmed their participation last week.

“The RSC is not answerable or accountable to the International Accord, because there is no linkage between us,” Miran Ali, vice president at the BGMEA and director of the RSC, told Sourcing Journal. “It is a wholly separate initiative, and has nothing to do with the RSC.” Nirapon, too, he said, has no affiliation with the RSC. “We have tried to coordinate technical matters, so as to avoid duplication of inspections and clarification on any technical issues related to engineering questions,” Ali added.

Christina Hajagos-Clausen, director, textile and garment industry, at IndustriALL Global Union, a member of the RSC, as well as a key negotiator of both the Bangladesh and International Accords, said the objective of the agreements has always been to hold brands accountable rather than instituting a “top-down approach” to monitoring work. IndustriALL, along with UNI Global Union, quit the RSC for a time, pointing to its lack of enforceability as a monitoring group and Accord successor. The unions rejoined after the three-month extension for the Accord was agreed upon. “They knew that an agreement between brands and trade unions was the condition for us to participate in the RSC, we made that very clear,” she said.

Neither is the Accord being “administered” from Amsterdam by any means, Hajagos-Clausen said. All the Accord Secretariat will do is monitor the compliance of brands. “I don’t see that as neocolonialism, I see that as a way of doing modern human-rights due diligence right now,” she said. “Voluntary initiatives need to be a thing of the past and binding agreements on multinationals is the way of the future.”

One insider, who asked not to be named, told Sourcing Journal that while health and safety regulations exist on the books in Bangladesh, they are rarely implemented properly. The Accord is not so much a way of bringing in new measures, the insider said, but rather a way of holding multinational corporations accountable to both local laws and international standards.

Engagement with factory owners has been an ongoing process, Hajagos-Clausen said, because it’s impossible not to include them in discussions about living wages, collective bargaining and freedom of association, particularly through initiatives such as ACT, which seeks to address issues such as brand purchasing practices and their knock-on effect on worker welfare.

“We have been asking them for years to come to the table,” she said. “We will still continue to ask them.”

Editor’s note: This story was updated on Sept. 13, 2021, to include a statement from Patagonia.