U.S. retailers unveil Bangladesh factory safety plan

Published: Thursday, Jul. 11, 2013 - 12:00 am | Page 6B

A group of 17 major North American retailers, including Wal-Mart, Gap, Target and Macy's, announced Wednesday a plan to improve factory safety in Bangladesh, drawing immediate criticism from labor groups who complained that it is less stringent than an accord reached among European companies.

The U.S. plan commits $42 million for worker safety, including inspections and an anonymous hotline for workers to report concerns about their factories, and more than $100 million in loans and other financing to help Bangladeshi factory owners correct safety problems. But unlike the accord joined mainly by European retailers that was unveiled Monday, the plan lacks legally binding commitments to pay for those improvements.

Some labor-rights groups estimated it would cost as much as $3 billion to bring Bangladesh's garment factories up to an acceptable safety standard.

Under the effort announced Wednesday, called the Alliance for Bangladesh Worker Safety, the participating companies will contribute money – from a modest amount up to $1 million a year, depending on the level of business each does in Bangladesh. This would create a fund of $42 million during the five years of the plan.

The proposal calls for the retailers to inspect the estimated 500 Bangladeshi factories that the North American retailers use within 12 months, and then develop plans to fix any substantial safety problems that are found.

The North American retailers plan to develop a common safety standard for the factories by October and to create a clearinghouse to share information among themselves about which factories have been approved for production and which need safety improvements.

Their plan calls for "shared accountability" in responding to those safety problems: The companies would work closely with the factory owners, the government of Bangladesh and various government and aid agencies to figure out ways to finance safety improvements. If serious safety problems were discovered at a particular factory, the plan's director would inform the Bangladeshi government, the factory owner and what the group calls the factory's "worker participation committee," a group to be elected by a factory's workers.

That differs from the way retailers in the European-dominated plan take responsibility for safety violations. The Europeans pledge to ensure that there is money to fix serious fire and building safety problems in any of the factories they use in Bangladesh.

Under the U.S. plan, the onus is on factory owners to improve their workplaces. Unlike the European group, the North American retailers are not promising to finance needed improvements.

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