Just days before their fifth — and final — anniversary on Tuesday in Bangladesh, the European brands and retailers working toward improving factory safety in the country’s apparel manufacturing sector have received their anniversary present: A six-month extension.
Although the European companies had been pushing since last year for a three-year extension of the Bangladesh Accord for Fire and Building Safety, until 2021, there had been vociferous protests against any extension by government ministers and manufacturers.
“This week, the government of Bangladesh confirmed it will extend the permission of the Accord to work beyond May 2018,” Edward David Southall, a member of the Accord steering committee, said at a press conference.
The Accord went into effect on May 15, 2013, formed in the aftermath of the collapse of the eight-story Rana Plaza in which more than 1,100 workers lost their lives, and thousands more were injured. The global outrage lead to more than 200 signatories, including H&M, Tesco, Adidas and others. Signatories invested time — and money — to chart a way forward, have factories inspected, identify dangers and advise and monitor factory remediation.
The Accord will continue its work through the Transition Monitoring Committee, established by the Accord brands, global trade unions, the Bangladesh Garment Manufacturers and Exporters Association, the International Labor Organization and the Bangladesh government.
Call it petulance on the part of the Bangladesh government, or a show of sovereignty, it was clearly stated that the country did not want any more extensions to the deal and the five-year deadline was meant for complete withdrawal from Bangladesh.
Meanwhile, the 2018 Transition Accord touted its growing number of brands and retailer signatories, and the pressure was on for others to join. As of this week, the Transitional Accord has 161 signatories, with German activewear retailer Puma the most recent and others including H&M, U.K. department store chain Debenhams and Marks & Spencer.
BGMEA president Siddiqur Rahman told WWD that by the end of the six-month period the Remediation Coordination Committee would take over. “More than 85 to 90 percent of the remediation work has already been completed. It is more about ensuring that the systems are working,” he said. “The main point is that the industry has reached very high safety and transparency levels in the last five years and soon the RCC will be able to follow up on this.”
However, Accord officials have a stringent and conditional list of requirements for their departure after six months, with detailed criteria that need to be followed, including a “demonstrated proficiency in inspection capacity; remediation of hazards; enforcement of the law against non-compliant factories; full transparency of governance and remediation progress; and investigation and fair resolution of workers’ safety.”
“If these criteria are not met, the Accord will continue,” said Joris Oldenziel, deputy director for implementation of the Accord.
That the Accord is preparing for a longer tenure beyond the six-month extension is displeasing Bangladesh factory owners.
“While they are ensuring that we spend a continuing amount of money on upgrading factories, we are still not hearing about increasing the buying prices,” said one factory owner, who requested anonymity.
Members of the BGMEA also said that global brands and retailers knew well ahead of time that the five-year term was ending, and could have worked better to ensure a smoother transition.
However, while noting the considerable progress made in factory safety over the last five years, global retailers observed that the process of remediation has been slower than they would have liked, and has needed a considerable amount of work. There have been more than 150,000 safety hazards being identified by Accord engineers, who have inspected more than 2,000 factories.
“The industry in Bangladesh is far safer today than it was 10 years ago,” Christy Hoffman, deputy general secretary of the UNI Global Union, told WWD. “But it is clear that for many major brands, the renewal of the Accord is essential to maintaining their business relationships in Bangladesh, until the Accord work can be taken over by a credible national body.The work is not yet done.”
What happens then to the 29-member Alliance for Worker Safety in Bangladesh, made up of mostly North American brands and retailers, including Target, Gap and Walmart, which has inspected and worked with the remediation of more than 600 factories?
The Alliance completes its five year term in July.
Last month, the Alliance board talked about the issue in Dhaka. Plans to form a successor safety monitoring organization that would carry forward the Alliance’s inspections, safety monitoring, training and helpline services once the five-year term draws to a close at the end of 2018 were discussed.
“Alliance member brands are ready to partner with the Bangladesh government and the BGMEA to establish an independent, credible, locally led organization that will continue our important work,” said Ambassador James Moriarty, executive director of the Alliance. “We have seen progress in our talks to date, and we are encouraged by momentum toward a collective agreement on a sustained safety effort.”
“One of the things I react to a little is the implication that somehow everything is wrapping up,” Moriarty told WWD. “That’s why I’m emphasizing that it’s a transition. The work is going to continue, but it’s going to shift to a different type of work.
“The heavy lifting of remediation will be largely done. And it will shift to the question of, ‘did people do the maintenance of the systems?’, ‘do they continue to train their workers and staff’, ‘do they continue to use the help line’? And that’s going to be very different. Basically what I’m describing is factories that are becoming mature in the safety eco system and starting to take care of themselves with, sitting above that, an organization that continues to make sure that the work gets done. So, it’s very different from what we have at the Alliance right now.
“Since its founding in 2013, the Alliance has brought about a sea change on safety within Alliance-affiliated factories. Remediation across more than 600 factories is 90 percent complete; 1.4 million workers in nearly 1,000 factories have access to the 24-hour Alliance helpline; 1.5 million workers have been trained in fire safety, and democratically elected Worker Safety Committees have been established in nearly 200 factories,” he noted.
BGMEA officials are hoping that the Alliance might join the Transition Monitoring Committee, to keep things easier, but industry analysts believe that is unlikely.
“The Accord and the Alliance think they have not yet finished all that they started, and there is also the apprehension that some of the things they have done may not be continued, so they want to stay on,” observed Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue and its former executive director. “One mistake is that they did not discuss this possibility with the stakeholders in the beginning so they have been meeting with resistance as they say they want to extend their work.
“But at the end of the day, we have to take charge of our own compliance. One would have hoped that the BGMEA and the Bangladesh government would have done the due diligence by this time. And overall, there is recognition by factory owners that compliance has to be done and the new large smart factories that are being made now are already taking this into account,” said Rahman.
Meanwhile, global trade unions IndustriALL, UNI and the witness signatories to the Accord — Clean Clothes Campaign, International Labor Rights Forum, Maquila Solidarity Network and Worker Rights Consortium — are calling once again on brands that did not join them earlier, as well as to those who have been part of the Alliance, such as Gap and Walmart.
They are pushing for a “credible and accountable alternative” to brand-backed audits. “The Rana Plaza collapse has shown that brand-backed audits are not enough, and that in the absence of a credible and accountable alternative, the continuation of the Accord is needed to prevent another disaster,” Judy Gearhart, executive director of the International Labor Rights Forum, said in a statement.
Ineke Zeldenrust, international coordinator at Clean Clothes Campaign, also brought up the need to have a reliable system to future proof injury and compensation: “It is vital that existing plans to create an employment injury insurance system in Bangladesh are sped up, to ensure that if factory incidents do happen workers can count on a reliable system to provide them with compensation,” she observed.
Global vigilance has been going up as well — not only by retailers, but also by consumers and trade unions and retailers are treading more softly. A $2.3 million settlement in January was witness to this changing world of vigilance, as a multinational apparel producer who was part of the Accord was instructed by the Permanent Court of Arbitration in the Hague to pay for repairs at its 150 supplier factories. The retailer could not be named, under the ruling.
As Mustafizur Rahman of the Centre for Policy Dialogue noted, “There is vigilance on the part of buyers themselves. I don’t think the new transition will be a major concern. There is no real need for separate organizations to come in for monitoring.”
The demand from buyers regarding compliance issues, and the past five years by factory owners working on these issues has already set the checks and balances of the system. In Bangladesh manufacturers now understand that there has to be more compliance, otherwise they will be penalized.
“The systems themselves have changed,” he said.