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The Financial Express

Global apparel brand agrees to fix Bangladesh factory flaws

| Updated: January 24, 2018 19:59:31


FE file photo used for representation. FE file photo used for representation.

IndustriALL Global Union and UNI Global Union have reached a $2.3 million settlement with a multinational apparel brand to fix life-threatening workplace hazards in Bangladesh's garment factories.

The settlement reached through an arbitration process under the legally-binding Bangladesh Accord on Fire and Building Safety represents one of the largest payments made by a brand to remedy workplace dangers in its supply chain, according to a statement issued by IndustriAll Monday.

The brand, which cannot be named under the terms of the settlement, has agreed to pay $2.0 million towards remediation of more than 150 garment factories in Bangladesh, it added.

The apparel maker will contribute a further US$300,000 into IndustriALL and UNI's joint Supply Chain Worker Support Fund, established to support the work of the global unions to improve pay and conditions for workers in global supply chains.

The global unions brought the case to the Permanent Court of Arbitration arguing that the brand did not require its factories to remedy hazards in a timely manner, leaving thousands of workers in dangerous conditions. The unions also charged that the brand did not ensure that it was financially feasible for its factories to fix ongoing safety issues, as required by the Accord.

At the time of the case's filing in October 2016, none of the brand's known supplier factories had completed the required remediation, and all of them had at least one high risk safety hazard, which had not been fixed. These included factories lacking fire alarm and sprinkler systems, lacking fire doors, and not separating flammable materials from the factories' boilers.

The unions' claim for arbitration spurred several of the brand's contracted factories towards better progress-one went from a remediation rate of roughly 50 per cent in October 2016 to more than 90 per cent in October 2017.

However, many other factories supplying the brand continue to lag far behind, with remediation rates hovering near 50 per cent and serious structural and fire safety issues left unresolved. All necessary safety improvements need to be completed by the Accord's expiration in May 2018.

"This settlement shows that the Bangladesh Accord works. It is proof that legally-binding mechanisms can hold multinational companies to account," IndustriALL's general secretary, Valter Sanches, said.

"We are glad that the brand in question is now taking seriously its responsibility for the safety of its supplier factories in Bangladesh. Their financial commitment serves as an example for other brands to follow," he added.

Christy Hoffman, UNI Global Union's Deputy General Secretary, stated that "Under the Accord, brands must shoulder some of the financial responsibility for fixing the Bangladeshi factories that manufacture their products, and this agreement shows that we are actively enforcing these Accord commitments." "The settlement makes real resources available to over 150 factories so they can finally make the necessary repairs that were needed years ago. We will continue pushing to make sure that all brands contribute their fair share to make work safer in Bangladesh," she added.

The Accord that was formed in 2013 after the Rana Plaza building collapse and so far it has carried out inspections on more than 1,800 factories supplying over 200 brands, identifying over 118,500 fire, electrical, and structural hazards.

Some 83 per cent of workplace dangers identified in the Accord's original round of inspections have been remediated, and 500 Accord factories have completed 90 per cent or more of the necessary fixes.

A second Accord was signed in June last year, which would go into effect when the original agreement expires in May 2018 and extends the Accord's protections until 31 May 2021.

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