TORONTO – Loblaw Companies Ltd. (TSX:L) said Tuesday that it will sign a pact to improve fire and building safety in Bangladesh following the collapse of a factory in that country that killed more than 1,100 workers.
The company had items for its Joe Fresh clothing label made in the building.
“This decision reflects the company’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,” the company said in a statement.
“The accord aligns with and addresses the company’s commitments to a new standard that all of its control brand products must be made in facilities that respect local construction and building codes.”
Loblaw also said it will keep its promise to have its own people on the ground in Bangladesh who will report directly to the company.
The Accord on Fire and Building Safety is a five-year, legally binding factory safety contract aimed at improving worker safety in the Bangladesh garment industry.
Several other big retailers have also signed the pact including Benetton, trendy Swedish fashion chain H&M, C&A of the Netherlands, British retailers Tesco and Primark, and Spain’s Inditex, owner of Zara.
The agreement requires that the companies conduct independent safety inspections, make their reports on factory conditions public and cover the costs for needed repairs.
It also calls for them to pay up to $500,000 annually toward the effort, to stop doing business with any factory that refuses to make safety upgrades and to allow workers and their unions to have a voice in factory safety.
The companies that agreed to the pact join two other retailers that signed the contract last year: PVH, which makes clothes under the Calvin Klein, Tommy Hilfiger and Izod labels, and German retailer Tchibo.
Labour groups applauded the retailers that agreed to the pact, saying the agreement goes a long way toward improving working conditions in Bangladesh’s garment industry, long known to be dangerous.
Among them was, the United Food and Commercial Workers Canada, the country’s biggest retail union.
“On behalf of more than 250,000 UFCW Canada members — including more than 80,000 Loblaw workers — we commend Loblaw for working with UFCW and the international labour movement on this vital issue and for committing to develop and embrace a new era of life-saving health and safety standards for textile workers,” national president Wayne Hanley said in a statement.
Working conditions in Bangladesh’s garment industry have come under increased scrutiny in recent years. Since 2005, at least 1,800 workers have been killed in the Bangladeshi garment industry in factory fires and building collapses, according to research by the advocacy group International Labor Rights Forum.
The two latest tragedies in the country’s garment industry have raised alarm. The building collapse at Rana Plaza on April 24 was the industry’s worst disaster in history. And it came months after a fire in another garment factory in Bangladesh in November killed 112 workers.
Following the latest tragedy, Walt Disney Co. announced that it was stopping production of its branded goods in Bangladesh. But most retailers have vowed to stay and promised to work for change. H&M and Wal-Mart both have said they have no plans to leave. Other big chains such as The Children’s Place, Mango, J.C. Penney, Gap, Benetton and Sears have said the same.
But the pressure has increased on those who stay. Since April’s building collapse, Avaaz, a human rights group with 21 million members worldwide, has got more than 900,000 signatures on a petition pushing Gap and H&M to commit to the proposal. And in the U.S., university chapters of United Students Against Sweatshops are helping to stage demonstrations against Gap in more than a dozen cities including Seattle, Los Angeles and New York.
The safety agreement comes two years after a fire and safety proposal drawn up by labour unions was first rejected by many clothing companies as too costly and legally binding. The latest agreement is a revised version of that proposed pact.
Forty companies, including Wal-Mart, H&M, and J.C. Penney, met in Germany with labour rights groups, labour unions and non-governmental organizations days after the building collapse. They discussed how the industry could improve safety conditions in Bangladesh.
Only a few companies, including Britain’s Primark and Loblaw, have acknowledged that suppliers were making clothes for them at the Rana Plaza site and have promised to compensate workers and their families. Loblaw’s CEO said suppliers were making clothes for as many as 30 brands and retailers at the site.
Benetton labels were found at the site, and the Italian fashion brand acknowledged that one of its suppliers had used one of the factories. The company said that before the collapse, the factory had been removed from its list of approved factories.