Supply Chain
Investors:
Apparel Workers in Bangladesh Still at Risk

This Sunday, April 24th, will mark the third anniversary of the tragic Rana Plaza factory collapse in Bangladesh, when workplace health and safety failures cost 1,134 people their lives and injured many others. Initiated in response to the collapse, the Accord on Fire and Building Safety in Bangladesh is a legally binding agreement between trade unions and brands such as H&M, M&S, Benetton and Zara to reform garment factory working environments.

More than 1,600 factory inspections have been conducted under the Accord, resulting in Corrective Action Plans (CAPs) which outline required improvements such as the installation of fire doors and sprinkler systems, or structural changes for adequate safety exits. Progress on these plans, however, has been slow: More than 1300 factories are behind schedule on the remediation measures in their CAPs.

A group of global investors known as the Bangladesh Investor Initiative, with collective assets valued at over U.S. $3 trillion, released a statement yesterday expressing their concern over the delays and lack of systemic reform. The 139 institutional investors from North America and Europe that are part of the group called on companies to:

1. Commit sufficient financial resources and provide commercial terms that enable factories to complete remediation, and to report on the nature and amount of financial support.
2. Use their leverage with factories where they source to create an environment conducive for the establishment of effective, proactive, independent ‘Safety Committees.’
3. Publicly disclose their supplier factories and sub-contractors, starting in Bangladesh.

The Accord reports that a ‘Safety Committee Pilot Program’ is underway in 40 factories with a registered trade union and active Accord signatory companies. However, the investors are concerned that such committees have not been more widely established given that they are “so integral to systemic reform of the sector,” and that workers are not able to elect their representatives to the committees. The investors believe that the latter “undermines the ability of the committees to independently identify and address threats to worker safety without interference from management.”

“Progress has been made on many fronts, but we are concerned that implementation of the identified actions is taking too long, and democratically elected worker representatives to safety committees have yet to be formed,” said David Schilling, Senior Program Director for Human Rights and Resources at the Interfaith Center on Corporate Responsibility (ICCR), which organized the Bangladesh Investor Initiative.

The investors are requesting that companies go beyond their commitments through 2018 as part of the Accord and continue to work with other stakeholders to support a living wage for garment workers and support free association and collective bargaining. Last year, the non-profit Fair Wear Foundation launched the Living Wage Portal to help companies overcome the barriers to implementing living wages for garment workers.

Some companies have made commitments and progress regarding factory worker wages and training. For example, H&M pledged to pay all textile workers a living wage by 2018, launched a skills training initiative in Bangladesh, and called for annual wage reviews in the country. At the same time, H&M has also been accused of ‘dragging its feet’ on worker safety despite being a member of the Accord.

“Global investors view supply chain risk as critical to the long-term sustainability of companies. The Bangladesh garment sector is a clear case where investors look to see if systemic changes are being made to address the glaring health and safety risks made tragically evident by the Rana Plaza building collapse,” Steve Waygood of Aviva Investors said.

“Aviva Investors and other investors will continue to monitor corporate compliance with the core tenets of the Bangladesh Accord to ensure that changes happen in a timely manner, and that factory workers’ health and safety are protected in global supply chains.”

The investors say they will be engaging relevant companies in their portfolios in the coming weeks to address their concerns.

Consumers are also banding together to raise awareness and pressure brands to reform the industry this week. For Fashion Revolution Week, launched in commemoration of the Rana Plaza tragedy, hundreds of conscious consumers are asking brands #WhoMadeMyClothes by posting photos of their clothing labels and tagging brands on social media.