Retail Companies To Fund Bangladeshi Factory Safety Measures

Trade & Policy

Retail Companies To Fund Bangladeshi Factory Safety Measures

At least 24 retail companies, including Hennes & Mauritz and Inditex, have agreed to improve safety at Bangladeshi textile factories by contributing up to US$ 2.5 million each towards that goal. The text of the five-year agreement, spearheaded by two labour groups, was made public last week after the deadline for signing it expired.

The agreement says each company's financial contribution depends on the annual volume of its garment production in Bangladesh, amounting to a maximum of US$ 500,000 annually over five years. The money will fund independent inspections and fire safety training at factories. Signatories include Sweden's H&M and Spain's Inditex, the Dutch chain C&A; Germany's Tchibo; Irish-based Primark; the British supermarket chain Tesco; US shirt company PNV; PVH, owner of brands like Calvin Klein and Tommy Hilfiger; the department store chains Marks&Spencer and Corte Ingles. The US chain Wal-Mart did not join. It said the agreement introduces requirements that should be left to retailers, suppliers and the government and that they were unnecessary to achieve safety goals.

Wal-Mart pledged to carry out its own safety controls at its 279 factories in Bangladesh. The agreement includes worker-led health and safety committees and requirements for union access to factories. It grants employees the right to refuse dangerous work and requires retailers to pay for factory repairs. If the signatory companies do not comply with the agreement, they will face an arbitration process involving local and international trade unions, which will put them under "huge public pressure," said a spokesman for IndustriALL, one of the two labour groups behind the pact.