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European retailers speak with one voice on bringing safety to Bangladesh

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Hennes & Mauritz AB signed the Bangladesh safety accord

Hennes & Mauritz AB signed the Bangladesh safety accord

After a tragic construction disaster in Bangladesh, European retailers, including H&M and Wal-Mart, signed the Bangladesh safety accord which will introduce measures aimed at boosting safety conditions in garment factories, taking a step to securing lives of workers. Undeniably, unions had a big part in pushing the European retailers to take action in improving workplace safety at Bangladeshi garment facilities.

Interestingly, US retailers did not sign the Bangladesh safety accord, weakening the significance of the agreement.

European retailers united on safety issues in Bangladesh

On the 24th of April, a Bangladeshi garment factory collapsed, starting the worldwide debate on working conditions in facilities located in the developing countries. The world was in shock. The construction disaster raised many questions regarding the role of the retailers and their co-responsibility. After the collapse,shocked customers and determined labor groups took action to force retailers to improve working conditions and boost the safety at facilities located in Bangladesh. Thus it is not an exaggeration to say that unions were behind the signed contract.

Europe witnessed a breakthrough as Hennes & Mauritz AB, Inditex SA, Tesco Plc and other European retailers signed the five -year Bangladesh safety accord. Under the terms of the accord, European retailers have decided not to employ manufacturers whose facilities will not secure basic standards imposed by the agreement. Moreover, the dispositions of the accord also impose an obligation to pay for all essential factory repairs on Bangladeshi exporters.

The Bangladesh safety accord was formulated by retailers that strictly cooperated with worker-safety supporters and unions. What is interesting is the fact that the announcement on the agreement, which aims to improve labor conditions, followed the nervous moves of the country's authorities as officials decided to increase the shockingly low wage of the garment workers. But the government has also committed itself to introduce laws which will foster creation of unions.

Undeniably, European retailers should be much more engaged in working conditions in Bangladesh as they are main receivers of the Bangladeshi garment products.

More important, the Bangladesh safety accord imposes obligation of independent safety inspections which are expected to increase the safety of workers. In addition, retailers are obliged to terminate contracts with manufacturers that refuse to introduce measures aimed at increasing safety and working conditions.

Shockingly, Benetton Group SpA and Mango MNG Holding SL, very popular brands in Europe, have not signed the agreement yet.

US retailers say no

Interestingly, US-based giant retailers such as Sears Holdings Corp., J.C. Penney Co., Gap Inc. and Wal-Mart Stores Inc. did not decided to take this groundbreaking step and refused to sign the Bangladesh safety accord.  Indeed, the situation looks somehow schizophrenic and it seems that there is a transatlantic split on the approach to the burning problem of safety and working conditions at facilities in Bangladesh.

Gap Inc. argues that it is ready to sign the groundbreaking Bangladesh safety accord if  essential modifications are introduced to methods of resolving conflicts. Eva Sage-Gavin, executive vice president of Global Human Resources & Corporate Affairs at Gap Inc., underlined in a statement: "With this single change, this global, historic agreement can move forward with a group of all retailers, not just those based in Europe.”

But the fact is that without US retailers, the Bangladesh safety accord will have a limited impact. It is widely speculated that the US retailers have been working on their own agreement aimed at improving safety and working conditions at facilities located outside of the US.

The fact is, however, that a single accord would have a bigger impact on the Bangladeshi manufacturers and the country’s government itself.

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