U.S. Retailers' Safety Plan for Bangladesh Announced, Falls Short

The U.S version of the plan for improving factory safety in Bangladesh was formally announced today and will be signed by 17 major North American retailers such as Wal-Mart, Macy's, Target, Sears, Nordstrom, and Gap.  The plan will be known as "Alliance for Bangladesh Worker Safety" which will provide low-cost financing for factory owners to improve conditions, an anonymous hotline for workers to report issues, and funding the training of workers and inspection.  But not everyone is celebrating...

The main issues that labor groups have with the North American plan is that it is not legally binding like their European counterpart's plan - "Accord on Fire and Building Safety in Bangladesh" and does not require as much monetary contribution by the retailers.

The North American plan is for five years and requires contributions of up to $1 million a year depending on the amount of business it does in Bangladesh to create a $42 million fund.  The companies will also work to standardize safety.  Further, unlike the European plan, the American plan will not require owners to improve the factory but if it doesn't, the company will do business with a factory that does comply with safety standards.  In the European plan, the companies take greater responsibility in making sure the factories are up to par.  

The main reason why American companies formed their own plan as opposed to signing with the more favored European plan was that the European plan contained a legal provision that they claimed would subject them to "unlimited legal liability."   Nonetheless, labor groups are unappeased. 

According to the NY Times, Scott Nova, an executive director of the Worker Rights Consortium, a monitoring group based in Washington said, "It's clever. It’s designed to sound like the accord. They talk about inspections. They talk about renovations. They can use all the rhetoric they choose, but if you look at the substance, there’s very little there." He added, “They can walk away whenever they want and there is no real obligation to pay a penny to repair and renovate factories.”

NY Times noted, "[u]nder the terms of the agreement, participating retailers can leave the alliance whenever they like, though if they do so before two years are up, they must pay what remains of their five-year financial commitment to the alliance."

Click here for a comparison of the 2 plans.

Read more:

NY Times: U.S. Retailers Offer Plan For Safety At Factories; Clothiers Act to Inspect Bangladeshi Factories
WSJ: Wal-Mart and Other U.S. Retailers Commit to Factory Safety in Bangladesh