Major Retailers Sign Worker Safety Agreement After Bangladesh Horror

Clothing factory building collapse death toll tops 1,100.

May 13, 2013, 3:51 PM

May 13, 2013 — -- Two of the largest global clothing retailers have signed onto an agreement to make major safety improvements to garment factories in Bangladesh, decisions that come on the heels of a deadly building collapse that killed more than 1,100 workers.

The retail giants, H&M and Inditex, announced Monday that they will sign an accord with labor groups and worker rights advocates that will mandate they pay for improvements in fire and building safety. They join PVH, the parent company of Tommy Hilfiger, which became the first company to sign the accord last year following an ABC News investigation into conditions at the factories in Bangladesh.

H&M, a Swedish-based retailer with more than 200 stores in the U.S., makes more than $1 billion worth of clothing in Bangladesh each year, more than Wal-Mart or Gap, which are two of the largest U.S.-based companies whose contractors hire factories in the South Asian country to sew their garments. Inditex, a Spanish company that sells in the U.S. under the brand name Zara, is considered the world's largest clothing retailer.

None of the companies that signed the agreement were believed to be producing clothes in the factory building that fell, but in the aftermath of the collapse, the retailers have faced sharp questions about the safety conditions in the factories where many of their products are made.

"H&M's and Inditex's decision to sign the accord is crucial," said Scott Nova, executive director of the Worker Rights Consortium, the independent labor rights watchdog. "H&M is the single largest producer of apparel in Bangladesh, ahead even of Wal-Mart. Inditex, owner of Zara, is the largest fashion retailer in the world. This accord now has tremendous momentum."

Workers in Bangladesh make more clothing for American consumers than do those any country, with the exception of China, and do so with some of the world's lowest wages.

"Our strong presence in Bangladesh gives us the opportunity to contribute to the improvement of the lives of hundreds of thousands of people and contribute to the community's development," said Helena Helmersson, the head of sustainability for H&M. "By being on site, put[ting] demands on manufacturers and work[ing] for continuous improvements, we can slowly but surely contribute to lasting changes."

The safety agreement, called the Accord on Fire and Building Safety in Bangladesh, includes legally binding commitments from the retailers to fund and mandate all necessary renovations and repairs at dangerous Bangladesh factories. It includes an independent inspection program with public reports of all inspections, and an obligation for brands and retailers to end business with any factory that refuses needed renovations. And, for the first time, it provides workers in Bangladesh the right to refuse to enter an unsafe building, with no fear of penalty.

That provision, in particular, has resonated with advocates for workers who have watched the events unfold since the eight-story Rana Plaza building, which housed five garment factories, collapsed into rubble nearly three weeks ago. As bodies have been recovered, the death toll has risen daily, now climbing to more than 1,100.

Advocates told ABC News that many workers had refused to enter the structure the day prior to the collapse because they were concerned about large cracks that were forming in the building's walls. But on the morning of the collapse they were ordered back to work, the advocates said.

Last year, ABC News' "World News with Diane Sawyer" and "Nightline" aired reports on the dangers those workers have faced, especially from high-rise building fires, which have proven particularly lethal because so few of the factories are equipped with modern safety enhancements such as enclosed stairwells, fire escapes and sprinkler systems.

ORIGINAL REPORT: Deadly Conditions in Bangladesh Factories

Other Big Brands Mull Safety Accord

A number of major brands have been involved in negotiations on the accord, including Gap and Walmart. Both retailers launched their own initiatives after a fire at a Bangladesh garment factory killed 112 workers six months ago. But in the aftermath of the collapse, both have also been in discussions about the broader agreement even though neither were manufacturing items in the building.

"We've nothing to announce right now," said Kevin Gardner, a Walmart spokesman. "At Walmart, our goal is to positively impact global supply chain practices both by raising our own standards and by partnering with other stakeholders to improve the standards for workers across the industry. This is why Walmart has been advocating for improved worker safety with the Bangladeshi government, with industry groups and with suppliers."

Gap officials did not respond to a request for comment on the agreement.

Nova and other advocates for workers in Bangladesh have focused attention on Gap and Walmart in recent weeks, urging them to join the agreement. "Gap calls itself a leader on social responsibility," Nova said. "The opposite is the case. Gap and Walmart are laggards."

A spokesman for one of the best-known retailers whose garments were found in the rubble of the Rana Plaza building, Benetton, told ABC News over the weekend that the company is "in the process of finalizing our involvement in a multi-stakeholder initiative currently being formed and supported by the International Labor Organization that brings together producers, trade unions and NGOs."

Benetton had initially denied producing clothing in the building in an interview the day after the collapse. Last week, the company's CEO acknowledged that some Benetton clothing had been made there prior to the collapse and a company spokesman sent ABC News a statement saying "that one of our suppliers had subcontracted orders to one of these Dhaka-based manufacturers."

"Prior to the accident, that manufacturer had already been permanently removed from the list of potential direct or indirect suppliers," the Benetton statement said. "In fact, it had come to light that it no longer met the stringent standards that would have made it eligible to even potentially work for us."

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