WWD.com/business-news/government-trade/wal-mart-gap-unite-on-bangladesh-accord-6960816/
government-trade
government-trade

Wal-Mart, Gap Unite on Bangladesh Accord

A group of major retailers led by Wal-Mart Stores Inc. and Gap Inc. have joined together to formulate their own fire and safety action plan.

WASHINGTON — Further splintering the global fashion industry’s response to the tragedies in Bangladesh’s apparel industry, a group of North American retailers, brands and industry associations led by Wal-Mart Stores Inc. and Gap Inc. said Thursday they were formulating their own fire and safety action plan.

Divisions have grown in the international apparel manufacturing sector over which path to take to improve fire and safety regulations in Bangladesh after the Rana Plaza building collapse in April that killed 1,127 workers.

The new initiative is being led by Wal-Mart and Gap, according to industry sources, and comes at a time of mounting public pressure on the two major U.S. retailers after they chose not to sign a binding, international Bangladesh fire and safety accord that 41 other retailers and brands have signed.

RELATED STORY: Rep. George Miller Presses Bangladesh on Safety >>

The new alliance includes retailers and brands that are members of the American Apparel & Footwear Association, National Retail Federation, Retail Industry Leaders Association and Retail Council of Canada. The alliance is working with the Bipartisan Policy Center, cochaired by former Senate Majority Leader George J. Mitchell and former Sen. Olympia Snowe to help facilitate the discussions and ultimately develop a new program. Wal-Mart and Gap are both members of RILA and the NRF.

“At Wal-Mart, we’ve taken a number of actions that meet or exceed other factory safety proposals,” a company spokesman said, referring to the plan the retailer revealed earlier this month. “These include strengthening safety standards for factories, a zero-tolerance policy for unauthorized subcontracting, increased transparency, and requiring that in-depth safety audits and remediations be made to every factory directly producing product for us in Bangladesh, reflected in the cost of the goods that we buy. We also believe there is a need to partner with other stakeholders to improve the standards for workers across the industry. Taking part in the development of this broader safety plan with other brands, retailers and the Bipartisan Policy Center, building upon our previously announced commitments, is part of that work.”

Bill Chandler, vice president of corporate affairs for Gap, said, “We see the American alliance as a powerful path forward, and we have considerable trust in Sens. Mitchell and Snowe in the way they will facilitate the discussion. We are hopeful under their leadership and coordination by the BPC that these discussions will result in a plan for long-lasting change for the garment industry in Bangladesh.”

The BPC organized a working session in New York on Wednesday and said it plans to hold several more sessions in New York and Washington over the next month.

“The alliance is driving to develop a single, unified action plan and schedule for implementation that will achieve effective and long-lasting change for the garment industry and its workers in Bangladesh,” the BPC said, adding that it will release its plan in early July.

Jason Grumet, BPC president, said, “Over the next several weeks, we look forward to building on the efforts of the Safer Factory Initiative [another plan that was unveiled last month] and seeking input from key stakeholders to forge an effective response.”

The new alliance of retailers and brands is developing a separate safety plan it hopes to have companies sign onto, according to sources. The action plan would bring the number of major Bangladesh safety initiatives to three.

Labor rights groups and unions dismissed the new initiative.

“The AFL-CIO and Change to Win labor federations are deeply concerned about Wal-Mart and Gap’s plan to move forward with a corporate-controlled, nonbinding process for adopting building safety standards in Bangladesh,” the two unions said in a joint statement. “While former Sens. George Mitchell and Olympia Snowe are both respected for their ability to forge compromises, we cannot afford to compromise the lives of Bangladeshi workers. We are determined to get this process right, and we will express our concerns to both former senators and ask that they not participate in undermining the ongoing and more productive process led by IndustriALL and UNI global labor federations.”

RELATED STORY: Splits Develop Over Bangladesh Safety Plans >>

With Sean John signing the IndustriALL-led accord on Thursday, it becomes only the third U.S. company — with PVH Corp. and Abercrombie & Fitch Co. — to do so, joining 37 major European retailers along with Canada’s Loblaw Cos. Some U.S. firms said they were hesitant to sign the accord because it included legal liabilities to which they couldn’t agree. Gap had said it was within a matter of a few words of signing it, but has not done so.

“No amount of bipartisan window dressing can change the fact that Wal-Mart and the Gap have refused to take this important step,” the AFL-CIO and Change to Win said. “This is a matter of life or death. Quite simply, nonbinding is just not good enough.”

Scott Nova, executive director of the Worker Rights Consortium, said, “It is a classic example of a bunch of companies facing mass public criticism, flailing about for a public relations solution to a problem that cries out for a real solution. Gap and Wal-Mart cannot admit that the real reason they won’t sign the binding agreement is they don’t way to pay more to keep workers safe, so they have glommed on to one shame initiative after another.…No one is going to believe an initiative that is controlled by them exclusively is going to do anything meaningful to protect workers.”

Rep. George Miller (D., Calif.), who has been outspoken on the need for U.S. companies to address the foreign factory safety issue proactively, said, “It is disappointing that Wal-Mart and Gap appear to be headed in a different direction, although at this time all we know is they have a plan to have a plan…Businesses frequently tell Congress that they need certainty in the marketplace. By planning to have a plan of their own, Wal-Mart and Gap are actually going to create more uncertainty in the garment industry in Bangladesh. Workers will have a harder time knowing whether they are working in a factory that is safe or not.”