May 21 Gap Inc's chairman and CEO said
on Tuesday the U.S. retailer was ready to sign a global accord
designed to prevent another deadly disaster in Bangladesh's
garment industry, provided there were some "very minor
A series of incidents at factories has focused attention on
safety standards in Bangladesh's booming garment industry while
creating a trans-Altantic divide between U.S. and European
retailers over ways to resolve these issues.
Some U.S. retailers, including the owner of the Gap, Banana
Republic and Old Navy chains, had said they would not join the
European pact without changes to the way conflicts are resolved
in the courts.
IndustriALL, a union organization based in Europe which
helped create the pact, had said the agreement could not be
amended to address concerns of U.S. companies.
Speaking at the company's annual general meeting on Tuesday,
Gap Inc CEO Glenn Murphy said the company was still in
discussions over the agreement proposed by European labor
groups. Under this pact, retailers would be subject to a binding
arbitration that would be enforceable in the courts of the
country where a company is domiciled.
Murphy did not mention specific changes sought by Gap Inc.
"We've not given up that a global accord of some kind can be
worked out," he said, but added that the proposal at present
did not "make sense" for the company.
Binding arbitrations typically restrict the ability of
parties to appeal any decision in court, which makes U.S.
retailers nervous about possible consequences of arbitration.
Many European retailers, including the world's two biggest
fashion retailers - Inditex SA and Hennes & Mauritz
- had signed on, along with almost 30 other companies.
retailers. Among U.S. retailers, only PVH Corp and
Abercrombie & Fitch Co are on board.