May 13, 2013 / 1:15 PM / 7 years ago

H&M, others back new Bangladesh factory safety accord

STOCKHOLM/MADRID (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 company logo is placed at the flagship store of H&M, Hennes & Mauritz, HMb.ST, the world's second-biggest fashion retailer in Sweden's capital Stockholm May 7, 2013. REUTERS/Arnd Wiegmann

The agreement on fire and building safety, which is being led by the International Labor Organization, 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, has 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, H&M, U.S. apparel maker PVH Corp, Britain’s Tesco and Primark, and COFRA Holding AG’s C&A 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.”


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 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 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 program 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.


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 and Gap Inc, which said last year it would launch its own safety program.

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 did not immediately comment on Monday.

Avaaz, a global advocacy organization, said now that H&M had 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.

($1 = 0.6517 British pounds)

Writing by Emma Thomasson; Additional reporting by Jessica Wohl in Chicago, James Davey and Neil Maidment in London; Editing by David Cowel, Sofina Mirza-Reid and Bernard Orr

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