Euro Retailers Hammer Out Their Own Bangladesh Response

A mostly European consortium of 70 retailers and apparel brands has agreed to inspect within nine months all Bangladesh garment factories that supply the companies, reports The New York Times, but the pact includes a very unusual element: participants will publicly reveal the names and addresses of all of the Bangladeshi factories they are using and do so by July 15.

That move reflects the huge impact that the Bangladeshi factory deaths have had on retailers. The pact includes two elements that, just a year or two ago, would have been considered retail heresy. First, they have agreed to reveal those roughly 1,000 factory identities to their direct rivals. But much more dramatic, they are making the names public, which delivers them to all potential competitors.

Given that many global chains use the same Bangladeshi factories, the hope is that change can be much more effective through coordination.

Such coordination is essential because the plan calls for pact inspectors to have powerful and immediate authority. For example, when any inspector comes across something that the inspector believes poses an immediate threat of death or serious injury, that inspector has the power to order the factory owner to immediately shut down during the probe and repairs. The Times said funding for these repairs will "come from joint investments, direct payments, negotiated commercial terms, government or donor support or any combination of these mechanisms."

Inditex, PVH, the owner of Calvin Klein and Tommy Hilfiger, and British mail-order retailer N Brown Group PLC are heading the initiative on behalf of the retailers, the Wall Street Journal noted.

Under the plan, whenever inspectors find a problem immediately threatening to cause death or serious injury, the factory's owner will be told to cease operations during investigation and repairs. The group's new executive director is to alert Bangladeshi officials, all signatory companies and the factory's workers about the dangers.

The plan's signatories agreed that money to correct safety problems could come from joint investments, direct payments, negotiated commercial terms, government or donor support or any combination of these mechanisms.

The fact that so many of these factories are used by multiple global retailers is fueling another concern, namely that chains that are not participating in this pact—and therefore not helping to fund its activities—would still reap the rewards from the group's efforts. "The U.S. is freeloading on our commitment," Ben Vanpeperstraete, the Belgian coordinator for garment workers' rights group Clean Clothes Campaign, told the Journal.

Among the few American companies that have joined the European-dominated plan are PVH, Abercrombie & Fitch and Sean John. Loblaw, a Canadian retailer that produces the Joe Fresh clothing line, has also joined.

For more:
- See Wall Street Journal story
- See New York Times story

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