Hitting holdouts on Bangladesh
The pressure is on. With more European apparel companies signing an international agreement to tighten safety standards in their Bangladesh supply factories, the spotlight is turning increasingly to U.S. brands that are so far holding out.
On Tuesday, Britain’s Marks & Spencer, Italy’s Benetton and Spain’s Mango joined six other European retailers in an accord known as the Bangladesh Fire & Safety Agreement, which has gained significant traction since the collapse of the Rana Plaza building last month, killing over 1,100 Bangladeshi garment workers.
The agreement, put together by a Swissbased labor consortium, IndustriALL, mandates independent safety inspections of factories in Bangladesh, commits the companies to pay for necessary fixes, and helps finance the administrative costs of the program.
Five other signatories, including Sweden’s H&M, the largest buyer of Bangladesh-made clothing, agreed to the legally binding deal on Monday. The only U.S. clothing firm to have signed — in 2011 — is New York’s PVH Corp. (a.k.a. Phillips Van-Heusen), which owns U.S. labels including Calvin Klein, Tommy Hilfiger and Izod.
So, how long can other U.S. companies, like San Francisco’s Gap, the object of a nationwide petition drive, hold out? Until they feel better about the agreement, some of them say.
“Gap is willing to agree with all but one provision,” said Debbie Mesloh, the company’s senior director of public affairs. “We are six sentences apart. We believe that an amended accord is within reach.”
The sticking point is legal, specifically how disputes get resolved, “so that all parties are held to their commitments,” said Mesloh. That presumably includes Bangladeshi parties involved with Gap’s 78 supplier factories there. For U.S. firms, the provision as written “would essentially be opening the legal floodgates on issues that have not been negotiated in sufficient detail.
“But we believe that an amended accord is within reach.”
Walmart, “like a number of other retailers, is not in a position to sign the accord at this time,” the company said Tuesday afternoon. “While we agree with much of the proposal, the plan also introduces requirements, including governance and dispute resolution mechanisms, on supply chain matters that are appropriately left to retailers, suppliers and government, and are unnecessary to achieve fire and safety goals.”
Earlier Tuesday, the Bentonville, Ark., company announced it will conduct “indepth safety inspections” at all its 279 factories in Bangladesh within six months. Similar to provisions in the accord, Walmart will publish the results, beginning June 1, and has started posting on its website the list of “failed factories in Bangladesh that are no longer allowed to produce for Walmart.” (www.corporate.walmart.com/Bangladesh)
As for who pays for necessary fixes, the company will “expect the cost of safety improvements to be reflected in the cost of goods we buy,” said Rajan Kamalanathan, Walmart’s head of ethical sourcing.
J.C. Penney, some of whose brands were manufactured in the Rana Plaza factory, hasn’t commented on the agreement, but said it has already begun phasing out the use of factories in multiuse buildings (like the Rana Plaza) in Bangladesh and plans to “fully implement” a raft of new safety procedures “across the company’s entire supplier base,” a company spokeswoman said.
Target also did not comment directly on the agreement. “In Bangladesh, we use our own internal, unannounced audit process and our own auditor to ensure vendors are meeting our standards,” Jessica Deede, a company spokeswoman, said Tuesday.
Deede added that Target “has an expanded auditing process specifically for Bangladesh,” the longest of any country it acquires goods from.
“We’ve also reduced the number of factories we work with in Bangladesh by nearly 50 percent over the past several years and consolidated our business with factories that have committed to better safety standards,” she said.
Levi Strauss & Co., the other San Francisco company with a presence in Bangladesh, albeit much less so than the other companies listed here, said it does not intend to sign the accord, period.
“We’re not signing the new accord because we already follow guidelines outlined in it,” said spokeswoman Kris
Marubio. “We support industry-wide initiatives, such as those put forth by the International Labour Organization.”
Levi’s has not had garments produced in multiple level/multiple-owner factories like Rana Plaza for several years.
“Our policies and practices are so strict that we only use 13 factories in Bangladesh,” said Marubio.