WWD.com/business-news/government-trade/fast-retailing-inks-safety-accord-in-bangladesh-7081647/
government-trade
government-trade

Fast Retailing Signs Bangladesh Accord

Company had previously held off on signing the agreement in favor of conducting its own factory checks in the country.

TOKYO — Fast Retailing Co. Ltd. said Thursday it has signed the Accord on Fire and Building Safety in Bangladesh.

The announcement marks a turning point for the Japanese company, which had held off on signing the agreement in favor of conducting its own factory checks in the country.

The accord, an initiative of IndustriALL Global Union and UNI Global Union, has garnered widespread support from some 80 retailers and brands, mainly European ones, such as Inditex, Hennes & Mauritz, Marks & Spencer, Carrefour, C&A, Primark, Puma and Benetton. PVH Corp., Abercrombie & Fitch Co. and American Eagle Outfitters Inc. have also signed on to the agreement, which took shape after the April collapse of the Rana Plaza factory near Dhaka that killed more than 1,100 people and injured hundreds of others.

RELATED CONTENT: Bangladesh Talks a Cause for Optimism >>

Fast Retailing said it had reviewed the terms of the accord and “confirmed that it effectively ensures the safety of garment workers in Bangladesh.” The company said it reached this conclusion after the full details of the accord were released July 8.

“Fast Retailing’s priority is working across the industry to improve conditions for garment workers in Bangladesh. We signed the Accord on Fire and Building Safety in Bangladesh based on ongoing communication with its management and their sharing of the information that we required to make a decision,” said a Fast Retailing spokesman.

The retailer, the corporate parent of Uniqlo, said it started its own independent investigation into fire and building safety at the facilities run by its manufacturing partners in Bangladesh on May 27. The company said this investigation is now complete and follow-up confirmation of building safety is planned. Fast Retailing said full results of the investigation will be released in November.

“In 2004, Fast Retailing introduced a code of conduct for all of its manufacturing partners, and today continues to work with outside experts to monitor conditions at its partners’ facilities to ensure compliance. Fast Retailing’s current independent investigation is an aspect of this process, aimed at strengthening building and fire safety,” the company said.

The Accord on Fire and Building Safety requires that companies mandate and pay for renovation and repairs to ensure factories in Bangladesh are made safe. The five-year pact is a legally enforceable contract between companies and unions that will use binding arbitration to resolve disputes.

A group of North American retailers and apparel brands called the Alliance for Bangladesh Worker Safety, unveiled its alternative agreement in July. This rival group, which includes Wal-Mart Stores Inc., The Gap Inc., VF Corp. and Target Corp., has formed a binding five-year worker, fire and factory safety pact that will provide a minimum of $42 million in funds to improve factory safety conditions in Bangladesh.

“We believe that the Alliance for Bangladesh Worker Safety will also significantly benefit garment manufacturing in Bangladesh and foresee synergies with the Accord on Fire and Building Safety in Bangladesh,” the Fast Retailing spokesman said.

Fast Retailing considers itself the fifth-largest private-label apparel retailer in the world behind Inditex, H&M, the Gap and Limited Brands in terms of annual sales volume. Fast Retailing is not disclosing how much it produces in Bangladesh but a spokesman said it is a “very small percentage” of the total and Uniqlo, the company’s biggest brand, manufactures about 70 percent of its goods in China.