European retailers have taken the lead in the push for a private-sector solution to the problem of treacherous Bangladeshi textile factories, and on Tuesday six more of them – all Danish – have come forward as the latest signatories to an international Bangladeshi workplace safety accord.
Companies that sign the deal will contribute annually to a fund aimed at improving working conditions in the world’s third-largest textile exporter.
"It is encouraging that several Danish companies today have decided that they will sign the international agreement," Danish Trade Minister Pia Olsen Dyr said in a statement obtained by Reuters.
The six Danish retailers that agreed to pitch in to improve Bangladeshi garment factory conditions are: PWT Group, IC Companys A/S (CPH:IC), DK Company A/S (CPH:DKC), Bestseller, COOP Denmark and Dansk Supermarked A/S.
The list of signatories now stands at 63 mostly European companies. Only five of them are U.S. based, which underscores a rift regarding accountability for sweatshop labor and sketchy outsourcing between companies on both sides of the Atlantic.
“Companies act on the basis what they feel they have to do to protect their image and reputation,” Scott Nova, executive director of the Worker Rights Consortium, a Washington-based labor-rights group, told IBTimes. “Obviously there is some difference in perspective between the reputational consequences, whether it's the public reaction or whether they feel the media will just gloss over it. U.S. companies apparently think they can take a few hits over this and weather the consequences.”
Out of the five U.S.-based companies, two of them – Scoop NYC and fashion designer Zack Posen’s House of Z LLC – don’t presently source from Bangladesh, says Nova. That means only three U.S.-based companies have committed to the accord that source garments from the impoverished Southeast Asian country, and therefore will pay into a fund out of their operating expenses: New York-based PVH Corp. (NYSE:PVH), owner of Calvin Klein and Tommy Hilfiger; Ohio-based Abercrombie & Fitch Co. (NYSE:ANF) and hip-hop mogul Sean Combs’ Sean John Clothing Inc., based in New York.
Stockholm-based Hennes & Mauritz AB (STO:HM-B), a signatory to the agreement, is the largest buyer of Bangladeshi garments, but U.S. retailers who are also major buyers have refused to sign. They are: Wal-Mart Stores Inc. (NYSE:WMT), The Gap Inc. (NYSE:GPS), Macy's, Inc. (NYSE:M), Sears Holdings Corp (NASDAQ:SHLD) and J.C. Penney Company, Inc. (NYSE:JCP).
The accord, created in May, is sponsored by a number of nongovernmental organizations including Copenhagen-based industriALL Global Union, Clean Clothes Campaign, based in The Netherlands, and Workers Rights Consortium.
This push for corporate action comes after a string of fatal accidents in the country, most notoriously the April 24, 2013, Rana Plaza building collapse in Savar that killed over 1,100 people and injured 2,500 others. That accident came exactly five months after the Tazreen Fashion factory fire in Dhaka killed 117 and injured 200. In May, six workers, a security guard and a manager burned to death in a textile factory fire in Dhaka’s Mirpur industrial district.
Signatories of the accord will fund programs for five years to improve safety standards among the estimated 4,500 textile factories in the country. The amount they pitch in annually will be based on volume of garments each company sources from the country, up to $500,000 a year. The cost of improving factories in the country could ultimately run into the hundreds of millions of dollars, so even with the private sector contribution Bangladesh will need to spend more.
Earlier this month the U.S. Department of Labor announced a $2.5 million competitive grant solicitation to fund factory safety improvement in Bangladesh.
So how much blame do Western (and other) consumers share for workplace tragedies on the other side of the world? IBTimes explored this topic in a report published on Dec. 16, 2012. Read it here.