Retailers were discussing agreements on improving labour conditions in Bangladesh both before and after the collapse of the Rana Plaza factory complex two weeks ago - the worst industrial incident in the country's history
At least 24 retailers including Hennes & Mauritz AB and Inditex SA each agreed to contribute as much as $2.5 million over five years toward the cost of improving fire and building safety in Bangladesh.
The companies, also including Marks & Spencer Group Plc, Loblaw Cos Ltd and Associated British Foods Plc's Primark, will pay as much as $500,000 a year over the five-year term of an agreement announced today by the IndustriALL global union.
"We recognise the commitment that these companies are making towards ending the cycle of factory disasters in Bangladesh," IndustriALL general secretary Jyrki Raina said in a statement on the union's website. "We call on all other global brands sourcing from Bangladesh to join us in making sure that every garment worker in Bangladesh can work in safety."
Walmart Stores Inc has said it won't accept an agreement "at this time" and will instead make public safety inspections at all of its suppliers' authorised factories in Bangladesh. A Gap Inc spokeswoman, Debbie Mesloh, said on May 13 that the company is "ready to sign on" pending a change to the provision regarding binding arbitration.
Safety inspections
The money from the agreement will fund safety inspections, fire training and remediation programmes, the union said in the statement. A committee of unions and retailers will be formed to oversee disputes, with any arbitration award being enforceable in a court of law, the union said. Inspections will be transparent and public statements will be made on any factory that is not acting "expeditiously" to implement upgrades.
"The whole issue in terms of safety and other standards could be quite expensive to monitor and generally deliver," said Colin McLean, chief executive officer and fund manager at SVM Asset Management in Edinburgh.
The largest companies such as Walmart "can show some leadership" on the matter, McLean said.
Walmart said yesterday that reviews of the 279 supplier plants will be completed within six months, and the factory names and inspection information will be posted on its website. The world's largest retailer said it expects the costs of "appropriate remediation and ongoing safety investments to be appropriately reflected in its costs of goods purchased".
Minimal impact
Today's agreement will have a minimal financial impact on the signatories, according to Soeren Loentoft Hansen, an analyst at Sydbank A/S in Stockholm.
At least 24 retailers including Hennes & Mauritz AB and Inditex SA each agreed to contribute as much as $2.5 million over five years toward the cost of improving fire and building safety in Bangladesh.
The companies, also including Marks & Spencer Group Plc, Loblaw Cos Ltd and Associated British Foods Plc's Primark, will pay as much as $500,000 a year over the five-year term of an agreement announced today by the IndustriALL global union.
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Retailers were discussing agreements on improving labour conditions in Bangladesh both before and after the collapse of the Rana Plaza factory complex two weeks ago - the worst industrial incident in the country's history. The disaster killed at least 1,127 people and followed a series of deadly fires that already had prompted activists to push Western retailers to take more responsibility for work conditions there.
"We recognise the commitment that these companies are making towards ending the cycle of factory disasters in Bangladesh," IndustriALL general secretary Jyrki Raina said in a statement on the union's website. "We call on all other global brands sourcing from Bangladesh to join us in making sure that every garment worker in Bangladesh can work in safety."
Walmart Stores Inc has said it won't accept an agreement "at this time" and will instead make public safety inspections at all of its suppliers' authorised factories in Bangladesh. A Gap Inc spokeswoman, Debbie Mesloh, said on May 13 that the company is "ready to sign on" pending a change to the provision regarding binding arbitration.
Safety inspections
The money from the agreement will fund safety inspections, fire training and remediation programmes, the union said in the statement. A committee of unions and retailers will be formed to oversee disputes, with any arbitration award being enforceable in a court of law, the union said. Inspections will be transparent and public statements will be made on any factory that is not acting "expeditiously" to implement upgrades.
"The whole issue in terms of safety and other standards could be quite expensive to monitor and generally deliver," said Colin McLean, chief executive officer and fund manager at SVM Asset Management in Edinburgh.
The largest companies such as Walmart "can show some leadership" on the matter, McLean said.
Walmart said yesterday that reviews of the 279 supplier plants will be completed within six months, and the factory names and inspection information will be posted on its website. The world's largest retailer said it expects the costs of "appropriate remediation and ongoing safety investments to be appropriately reflected in its costs of goods purchased".
Minimal impact
Today's agreement will have a minimal financial impact on the signatories, according to Soeren Loentoft Hansen, an analyst at Sydbank A/S in Stockholm.