By Jessica Wohl
May 14 North American retailers on Tuesday
discussed forging their own Bangladesh safety agreement--an
alternative to a legally binding accord that many European
retailers have signed on to--though details of any alternative
accord were still unclear.
The discussions Tuesday were the latest in a series of
talks, some convened by large retail trade organizations and
others by major retailers such as Macy's JC Penney Co
Inc, and Sears Holdings Corp, to develop a
response to fatal fires and a factory collapse in Bangladesh
last month that killed more than 1,000 people.
The National Retail Federation (NRF), one of the largest
U.S. retail trade associations, spoke on Tuesday afternoon with
other trade associations and with its member companies about a
possible accord among North American retailers. Details from
those calls are not yet available.
Meetings among North American retailers are shaping up as an
alternative approach to an accord that European-based retailers
have reached. The pact, joined Tuesday by Loblaw Cos Ltd
of Canada, includes legally binding commitments to safety
improvements, according to industry sources. A copy of the
agreement has not yet been released.
Major European retailers such as Sweden's H & M Hennes &
Mauritz AB and Spain's Inditex SA have signed
on to the accord. Labor groups including Europe's IndustriALL
and UNI Global Union, as well as non-governmental organizations,
provided the initial draft of the agreement and have set a May
15 deadline for companies to commit to its terms.
U.S.-based retailers have been reluctant to join any
industry accord that creates legally binding objectives. Gap Inc
said it would sign the accord only if changes are made
to the way disputes are resolved in the courts.
As of Tuesday, the only major U.S. company to announce its
support was PVH Corp, whose brands include Calvin Klein.
Robert E. Scott, an expert on contracts and commercial
transactions at Columbia Law School, said in an email that the
U.S. retailers are balancing a desire to seek improvement in
Bangladesh against concerns about exposing themselves to
liability for safety issues.
"Perhaps American firms believe that the risk of collateral
liability is too great to estimate," Scott said. "But that's not
a contract law issue, that's simply a question of balancing
corporate benefits of being seen as a good citizen trying to
control these conditions on the one hand with the risk of a
possible significant liability on the other."
Mike Posner, a professor of business and human rights at New
York University's Stern School of Business, in an email said
agreement to a legally binding accord by major European
retailers has put U.S. retailers under pressure. "The onus is
now on American brands to step up to the plate," he said.
Sears in a statement said the company "is not prepared to
sign the current proposal. We are engaged in preliminary
discussions about the alternate proposal from the retail trade
associations in North America."
A JC Penney Co Inc spokeswoman told Reuters the
company was actively engaged in the talks. "There has been some
discussion of possibly melding the two proposals into one hybrid
industry solution," she said.
Macy's Inc, whose namesake stores are the largest U.S.
department store chain, said it was working with the North
American Bangladesh Worker Safety Working Group, which includes
NRF, RILA and others.
Wal-Mart Stores Inc, the world's largest retailer,
did not have a comment on the meetings as of late Tuesday
Wal-Mart has expanded its own safety efforts in Bangladesh
over the past several months after the deadly Tazreen factory
fire in November.
On Tuesday, Wal-Mart laid out enhanced plans that include
in-depth safety inspections at all Bangladesh factories that
produce goods for it and increasing the pace and frequency of
follow up inspections.
Bob Kirke, executive director of the Canadian Apparel
Federation, said that while his group did not have an
announcement to make, "it's fair to say that we're working on
different responses to the Bangladesh situation."