Supply Chain

Walmart-Backed Alliance Vows to Fix Bangladesh, But Critics Fear Lack of Liability

An alliance of 17 North American brands led by Walmart, Gap and Target has unveiled the details of its independent Bangladesh Worker Safety Initiative — a five-year pact that aims to improve conditions at Bangladesh garment factories and establish more viable worker communications.

By Sheila Shayon | Published 11 years ago | About a 4 minute read

The plan is the counter to the ILO-supported Accord on Fire and Building Safety in Bangladesh, which is supported by over 70 brands, the majority of which are European. Led by two of the world's largest retailers — Inditex, owner of Zara, and H&M — the Accord includes plans for coordinated building inspections, and a broad network of support and accountability including factory owners, trade unions, government officials and brand leaders.

The apparent divide has been debated since the Rana Plaza factory building collapsed in April, killing 1,129 people. Now, with both documents in hand, it seems the only major difference is accountability — the same factor that drove Walmart, Gap and others to walk away from the legally binding Accord.

Supported by former US Senators George Mitchell and Olympia Snowe through the Bipartisan Policy Center — which receives funds from Walmart — the Alliance for Bangladesh Worker Safety includes: Canadian Tire Corp Ltd, Carter's Inc., The Children's Place Retail Stores Inc., Gap, Hudson's Bay Co, IFG Corp, JCPenney, Jones Group, Kohl's Corp, L. L. Bean Inc., Macy's, Nordstrom, Public Clothing Co, Sears, Target and Walmart.

The plan is being supported by several major industry associations, including: American Apparel & Footwear Association, Canadian Apparel Federation, National Retail Federation, Retail Council of Canada, Retail Industry Leaders Association, and the United States Association of Importers of Textiles & Apparel.

According to a press release from the Alliance, the group will enforce inspections of all factories that work with an Alliance member within one year, with the development of a safety standards plan within three months. Inspection results will be shared with factory owners, workers and government officials, and factory owners will be charged with upholding worker training and Worker Participation Committees, which will serve as a forum to voice workplace concerns.

Alliance members have already raised $42 million for a fund that will support improvements, with intent to raise an additional $100 million in loans. The amount contributed to the fund is based on how much production each brand does in the country, with the higher levels contributing $1 million per year over the five-year agreement.

As for the Accord, participating retailers vow to submit a list of all factories used so that independent inspections can occur and reports broadcasted. Any safety corrections must be made within nine months, during which workers will be paid.

Surely, on the surface it seems that both groups will do all that they can to improve the conditions of Bangladesh factories, however the Accord is an agreement protected by legal consequences — a detail that is strictly avoided in the Alliance's plan. Instead, the Alliance said it has established a Board of Directors consisting of retailers, stakeholders and an independent board chair that will monitor the members' follow-through on safety commitments.

“What they are doing is distracting people from what workers need to ensure safe working conditions,” said Liana Foxvog, a spokeswoman for the International Labor Rights Forum that doesn't agree with the Alliance's separate safety plan. The alliance “is really a face-lift of corporate responsibility programs that have existed for decades. We’ve already seen the results of those programs.”

Michael Posner, a professor of business and human rights at New York University's Stern School of Business, agrees, telling NPR that it doesn't make sense for there to be two competing plans.

"What's needed in Bangladesh is a comprehensive, industry-wide industry effort aimed at building a sustainable sourcing model that will ensure the workers in those factories, who are mostly young women, have a voice and assurance that they can work in a safe space," he said.

Despite disagreements among the groups, Walmart, in a statement, indicated that it is open to making improvements together with the EU-based Accord. "The next step is for all of us to work together, in collaboration with government, factory owners and NGOs to increase safety and improve the quality of life of the women and men in our supply chains whom we depend on to make our products. Our progress against these plans is essential, and we look forward to making progress together."

This article first appeared on Brandchannel on July 11, 2013.