* 17-member alliance includes Wal-Mart, Gap, Target, VF Corp
* 500 factories to be inspected, have worker training in 1st
By Jessica Wohl and Doug Palmer
CHICAGO/WASHINGTON, July 10 North American
retailers unveiled a five-year safety plan for Bangladesh
garment factories on Wednesday that would include inspecting
within a year every factory they use, following tragedies such
as April's deadly garment building collapse.
The North American plan was immediately criticized by groups
that think a European-led plan is stronger.
The plan announced in Washington, D.C. by the Alliance for
Bangladesh Worker Safety, which includes 17 retailers and
apparel companies, comes after 1,129 workers were killed in the
collapse of a Bangladesh garment plant in April, and another 112
people perished in a fire at a Bangladesh factory in November.
A larger number of mainly European retailers that have
signed what is known as the Accord on Fire and Building Safety
in Bangladesh announced a similar plan on Monday.
Both plans include factory inspections, worker
training and ways for workers to report safety concerns. The two
groups also agreed not to use factories considered to be unsafe.
Members of the Interfaith Center on Corporate Responsibility
and long-term shareholders in apparel brands and retailers said
the Alliance's plan lacks sufficient worker protections and
accountability mechanisms and called it a weaker alternative to
the European-led accord.
European unions involved in the other accord, industriALL
and UNI Global Union, called the North American alliance
"another toothless" auditing program.
"This initiative is not serious," said Tom Grinter, a
spokesman for industriALL.
MORE THAN 500 FACTORIES TO BE INSPECTED
More than four million people, mostly women, work in
Bangladesh's clothing sector, making it the second-largest
global apparel exporter behind China.
The North American alliance plans to inspect the more than
500 factories its members get garments from within a year, while
the European-led accord plans to have initial inspections at the
factories its 70 members use within the next nine months.
"I think both plans are very strong and that we should work
together going forward," said Jay Jorgensen, Wal-Mart Stores
Inc's global chief compliance officer. "Theirs doesn't
recognize the way the U.S. legal system works, which is why the
vast majority here in the U.S. didn't join."
One of the main concerns North American parties had with the
European-led accord was the use of a binding arbitration process
that would be enforceable in the courts of the country where a
company is domiciled. Binding arbitration typically restricts
the ability of the parties involved to appeal any decision in
North American alliance members will be held legally
accountable to the group. If they do not do the work they agreed
to do, the board can kick members out, their funds will be kept
by the alliance and companies can arbitrate to get back in, said
Jorgensen, a member of the alliance's nine-member board of
Daniel Duty, Target Corp's vice president of global
affairs who is also on the alliance's board, said that between
the efforts of the alliance and the accord, the groups should be
able to cover the majority of the factories in Bangladesh, more
than the 500 the North American alliance plans to inspect.
Bangladesh's Ambassador to the United States Akramul Qader
welcomed the North American plan and said he was "glad that
alliance members have expressed (their) intention to collaborate
with the EU-based accord on fire and building safety."
He also expressed hope the United States would quickly
restore trade benefits that were suspended in late June because
of the poor safety conditions in Bangladesh.
The U.S. decision set duties on about $35 million worth of
ceramics, golf equipment, tobacco products and other goods from
Bangladesh that previously entered the United States duty free.
The U.S. move does not directly affect Bangladesh's
multi-billion-dollar clothing exports, since garments are not
eligible for U.S. duty-free treatment.
1O PERCENT EARMARKED TO ASSIST WORKERS
So far, $42 million has been raised for the North American
project. Companies will contribute up to $1 million a year for
five years based on how much they produce in Bangladesh.
Ten percent of the funds will be set aside to assist workers
temporarily displaced by factory improvements or if a factory
closes for safety reasons. The money will also support a
non-governmental organization to be chosen within 30 days that
will implement parts of the program.
The North American alliance's plan, called the Bangladesh
Worker Safety Initiative, was developed with assistance from
former U.S. Senators George Mitchell and Olympia Snowe, who
acted as independent facilitators at the Bipartisan Policy
Center, a Washington-based think thank. The alliance has asked
Mitchell and Snowe to verify the effectiveness of the program
over at least the first two years.
The 17 current members of the alliance include: Canadian
Tire Corp Ltd ; Carter's Inc ; The Children's
Place Retail Stores Inc ; Gap Inc ; Hudson's Bay
Co ; IFG Corp; J.C. Penney Co Inc ; Jones Group
Inc ; Kohl's Corp ; L. L. Bean Inc; Macy's Inc
; Nordstrom Inc ; Public Clothing Co; Sears Holdings
Corp ; Target; VF Corp ; and Wal-Mart.
Hong Kong sourcing company Li & Fung Ltd, which
does business with many of the companies involved, is serving as
an adviser. Additional members are expected to join.
The North American alliance's plan is also being backed by
the American Apparel & Footwear Association, Canadian Apparel
Federation, National Retail Federation, Retail Council of
Canada, Retail Industry Leaders Association, and the United
States Association of Importers of Textiles & Apparel.