Loblaw latest to sign safety pact on Bangladesh factories

Loblaw, owner of the Joe Fresh brand, has become the latest major retailer to sign onto a pact promising significant improvements to building safety in Bangladesh textile factories, as pressure mounts on the remaining holdouts, which include Wal-Mart and Gap.

In the last 24 hours, the Italian label Benetton, Swedish mega-brand H&M, French retailer Carrefour, major low-cost U.K. retailers Primark and Tesco, Dutch chain C&A, and Inditex, the maker of Zara, all announced they would sign on to a new accord that will shift responsibility for fire and building safety in factories directly onto retailers. An earlier version of the agreement, drafted with international and Bangladesh labour unions, had already been signed by two retailers late last year: PVH, maker of the Tommy Hilfiger and Calvin Klein brands, and Tchibo.

“This decision reflects [Loblaw’s] pledge to stay in Bangladesh and underscores its firm belief that active collaboration by retail and manufacturing industries, government and non-governmental organization, is critical to driving effective and lasting change in Bangladesh,” Loblaw spokewoman Julija Hunter said in an email late Wednesday. The company had previously stated it was reviewing the agreement.

The accord comes with a looming deadline: brands have until May 15 to sign up. The deadline is designed to compel companies to move quickly towards making changes in some of Bangladesh’s more than 5,000 textile factories.

“It’s in their interest to sign before the deadline,” Toronto-based labour rights advocate Kevin Thomas said of the retailers who have not yet agreed to the pact. “Wednesday’s announcement will separate the companies that are serious about safety from those who are not.”

The agreement marks a fundamental shift in responsibility for the safety of Bangladesh’s 4 million textile workers. Until now, each brand has followed their own standards and audit processes to ensure safe and responsible working conditions in factories. But last month’s disaster has shown just how ineffective the current system can be at protecting factory workers employed in the country’s most important industry, where low-cost labour is the main competitive edge.

Under the Accord on Fire and Building Safety in Bangladesh, retailers will be required to undertake independent safety inspections, publish public reports on investigative findings and offer safety training for workers and management personnel. Crucially, they’ll have to pay for mandatory repairs and renovations, and are obliged to terminate business with any factory that refuses to make necessary safety upgrades. Factory workers will have a number of “whistleblower” routes—including a complaints hotline and in-factory health and safety committees.

Thomas called the agreement “an unprecedented change,” both in Bangladesh, and the global apparel industry. Only in Indonesia does a similar type of agreement exist, in which retailers have committed to allowing workers to organize into unions. That agreement was introduced last year.

Wal-Mart, the second-largest clothing buyer in Bangladesh, has declined to comment on the accord, while Gap reported said late Tuesday that it was “six sentences away” from signing the accord.

“If Wal-Mart and Gap don’t sign, there will be a double standard in Bangladesh between companies that care about workers’ lives and those that don’t,” Thomas argued. “Wal-Mart and Gap can choose which side of that divide they want to be on. In the meantime there is now substantial weight behind this accord and it can proceed while public attention focuses in on companies that fail to sign.”

Brands, including Loblaw, have been keen to prove they are serious about protecting workers rights in foreign factories in the wake of the disaster, offering financial assistance to victim’s families and promising to work with Bangladesh authorities to improve factory conditions. But a complex supply chain—where brands like H&M use no less than 166 different factories in Bangladesh alone—has deterred the kind of fundamental agreement between retailers needed to change the status quo: factories compete to offer the lowest-prices on what are often short contracts, and wages—the lowest in the world for a textile worker—and working conditions bear the brunt of international demand for cheap goods.

Wal-Mart and Gap were among those at a meeting in Germany the day after the factory collapsed, where 40 retailers discussed ways to improve safety standards. But those who sign the accord will be held to account, Thomas says. Brands who don’t meet their responsibilities could be called to explain themselves before the accord’s steering committee, or face arbitration. Though proof might only be found in an end to stories of factories collapsing or bursting into flames, labour groups argue this goes a meaningful bit further than lip service.