Western retailers and international labour activists who met last week in Germany are still wrangling over a two-year-old memorandum aimed at improving Bangladesh factory safety. The contractually enforceable document, which would require companies to pay suppliers more so factory owners can afford safety upgrades, was at the centre of discussions in Frankfurt on April 29.
About 510 Bangladeshi garment workers perished after a factory building collapsed on April 24.
Companies that attended the Frankfurt meeting, which was scheduled before Rana Plaza collapsed, had set a May 15 deadline to draft an agreement and decide whether to accept the terms.
So far only two companies have signed the original memorandum: PVH, which makes Tommy Hilfiger brand apparel, and the German retailer Tchibo.
“My hope is that companies have been shocked to their cores by seeing the photos and hearing the workers’ quotes coming out of Rana Plaza,” said Liana Foxvog, a spokeswoman for the International Labour Rights Forum, a Washington-based advocacy group.
Retailers have faced increasing pressure to ensure Bangladeshi factories are safe in the wake of the building collapse.
It was at least the third reported industrial accident in the south Asian nation since November, when 112 people died in a fire at a workshop that was producing clothes for companies, including Wal-Mart and Sears Holdings. Both have said the factory was not authorised to make their clothes.
The global garment industry would have to spend about $3 billion (R26.7bn) over five years to bring safety standards at Bangladeshi apparel factories to Western standards, according to an analysis by the Worker Rights Consortium.
Upgrading the country’s 4 500 factories would cost the garment industry about 10c a garment, the Washington-based labour monitoring group said.
The annual cost would be $600m, or about 3 percent of the $19bn that the Bangladesh Manufacturers and Exporters Association says Western companies spend annually on manufacturing in Bangladesh.
Fifty percent of Bangladesh’s garment factories do not meet legally required work safety standards and those that have improved working conditions have done so under pressure from Western apparel makers, according to Kalpona Akter, an executive director of the Bangladesh Centre for Worker Solidarity, an NGO founded by two former garment child workers to promote safer factories.
Bangladesh’s labour law requires safety measures such as fire extinguishers and easily accessible exits at factories.
As the death toll mounted in Bangladesh, the authorities said Rana Plaza lacked the required building permits and that its owner, Sohel Rana, was arrested along with the owners of factories located inside the building. Workers were ordered back to work after an engineer had warned the building was no longer safe, local officials said.
Companies rushed to respond to the disaster.
Loblaw, whose Joe Fresh brand garments were made at Rana Plaza, said last week it was dispatching four executives to Bangladesh to meet with government officials.
“I am troubled by a sequence of events or management practices that saw fit to send apparel workers back into this building after it was declared dangerous,” Loblaw chairman Galen Weston said.
Joe Fresh founder and chief executive Joe Mimran reiterated that Loblaw had no plans to leave the country, where it has 47 locations that supply the brand.
However, Mimran said the company would have to rethink which countries it would enter if the reliability of audits there could not be trusted.
Walt Disney told suppliers in March that it would no longer let its branded merchandise be made in Bangladesh and would restrict production to a list of permitted countries, according to a letter the company released last week.
“These are complicated global issues and there is no ‘one size fits’ solution,” said Bob Chapek, the president of Disney’s consumer products division.
Walmart, Gap and Children’s Place, a children’s apparel chain, all said they would not pull out of Bangladesh.
“Global buyers are a critical part of the Bangladesh economy and simply walking away is not the answer,” said Jane Singer, a Children’s Place spokeswoman.
In the meantime, retailers and labour activists will keep on talking and trying to come to an agreement.
“The question is whether the magnitude of the horror at Rana Plaza will be enough to overcome the long-standing resistance of most companies to making any enforceable commitments on building safety,” said Scott Nova, the executive director for the Worker Rights Consortium.
“If the apparel industry has any moral conscience, a serious, enforceable agreement can be reached. We will see,” Nova said. – Bloomberg