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UPDATE 5-H&M, others back new Bangladesh factory safety accord
May 14, 2013 / 1:55 AM / 4 years ago

UPDATE 5-H&M, others back new Bangladesh factory safety accord

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* Other brands have until May 15 deadline to join accord

* Death toll at 1,127 as recovery operation nears end

* Deal to involve financial commitment to improve safety

* Wal-Mart, Gap also involved in fire and building safety talks

By Veronica Ek and Clare Kane

STOCKHOLM/MADRID, May 13 (Reuters) - The world's two biggest fashion retailers, Inditex and H&M, along with several other companies have backed an accord aimed at preventing another disaster like last month's Bangladesh factory building collapse that killed more than 1,100 people.

The agreement on fire and building safety, which is being led by the International Labour Organisation, trade unions and other lobby groups, has been under negotiation since the Rana Plaza building collapse on April 24.

Deadly incidents at factories, including a fire in November that killed 112 people, have focused global attention on safety standards in Bangladesh's booming garment industry, the world's biggest exporter of clothing after China.

As of Monday, Inditex SA, Hennes & Mauritz AB, U.S. apparel maker PVH Corp, Britain's Tesco Plc and Primark , and COFRA Holding AG's C&A had announced their support. German retailer Tchibo also agreed to the plan, according to IndustriALL Global Union, which has been driving the negotiations to get brands to sign up for the agreement.

IndustriALL said it hoped for several more brands to join by a May 15 deadline set after talks in Germany last month with major brands and retailers. IndustriALL declined to comment before Wednesday's deadline on a total financial commitment for the project, but said "it is a substantial amount, enough to make a difference."

Pvh Set to Commit Up to $2.5 Million

Swedish fashion retailer H&M, which is a major purchaser of garments from Bangladesh but did not use any of the suppliers operating in the collapsed factory, said the five-year accord would add to its already strict requirements for suppliers.

"We hope for a broad coalition of signatures in order for the agreement to work effectively on the ground," H&M head of sustainability Helena Helmersson said in a statement.

H&M said the agreement would also need to align with an action plan agreed to by the Bangladesh government, industry associations and trade unions to reach all 5,000 factories. It declined to give details of any financial commitment.

Zara owner Inditex, the world's largest clothing retailer, said it also supported the agreement. "The accord has not come out yet, but as you know we have played a very active part in its development," a spokesman said.

PVH, whose brands include Calvin Klein, said it would commit up to $2.5 million to underwrite the programme set to be financed by the participating companies. PVH was the first company to agree to a memorandum of understanding on Bangladeshi safety issues last year, followed by Germany's Tchibo.

Britain's Tesco said it would create a fund of 1 million pounds ($1.53 million) to support improvements across the industry in Bangladesh, among other efforts it will pursue.

"Tesco did not use factories in the Rana Plaza building, but we are all responsible for ensuring we prevent another tragedy," Tesco Group Commercial Director Kevin Grace said in a statement.

Final Details Yet to Come

A spokesman for IndustriALL said the final draft of the deal would only be published on Wednesday but included strengthening workers' rights, training and brands making a financial commitment relative to the size of their business in Bangladesh.

IndustriALL said last week the accord involves a coordinated system of inspections, training and financial commitments from retailers as well as giving workers the power to refuse dangerous work.

As salvage workers neared the end of their search for victims on Monday, Bangladesh's cabinet paved the way for parliament to allow garment workers to form trade unions without prior approval from factory owners.

Other big brands involved in the fire and building safety talks include Wal-Mart Stores Inc and Gap Inc, which said last year it would launch its own safety programme.

Wal-Mart, the world's largest retailer, did not say whether it plans to sign the accord. The company said that it is working with various parties "to come to an appropriate resolution" and "develop broad-based solutions for the industry."

Gap said it was ready to sign on to the accord if there is a modification in the area of how disputes are resolved in the courts.

"With this single change, this global, historic agreement can move forward with a group of all retailers, not just those based in Europe," Gap said in a statement.

Representatives from Gap did not immediately respond to a request seeking more information about the modification.

Separately, Walmart on Monday called on the Bangladesh government to stop production at one apparel factory and investigate the condition at another until workers' safety could be assured.

Avaaz, a global advocacy organisation, said that with H&M committed to the plan, its campaign to push retailers to join in would now focus on Gap and Wal-Mart. The group's online petition pushing for a Bangladesh fire and building safety agreement had more than 923,000 signatures by Monday.

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