The launch of the Alliance for Bangladesh Worker Safety was
picketed on July 10 by self-described “activists”, handing out leaflets
attacking it as “a fake”. None had any idea what the Alliance was proposing.
For our readers, here is a summary of the key differences
between the Alliance the demonstrators have rejected without looking at it and the Accord on Fire and Building Safety in Bangladesh they purport to
regard as wonderful:
Membership. The Alliance currently consists of seventeen North American retailers/brands, with Li & Fung in an undisclosed "advisory capacity", though it "expects to add more members in the future". The Accord consists of 70 mainly European brands and retailers, though it also includes PVH, Abercrombie & Fitch, Canada's Loblaws (Joe Fresh), several Australian businesses and a number of smaller North American buyers
Absence Perhaps more interesting than which plan major buyers belong to is the list of major buyers who belong to neither, but do have sourcing in Bangladesh. No explanation has been offered for failing to commit by these buyers, listed in Clothesource's global Top Forty Apparel Buyers:
TJX
Nike
Adidas
Hanesbrands
Limited Brands/Victoria's Secret
Levi Strauss
Ralph Lauren
Fast Retailing
Shimamura
Sogo/Seibu
Takashimaya
Membership. The Alliance currently consists of seventeen North American retailers/brands, with Li & Fung in an undisclosed "advisory capacity", though it "expects to add more members in the future". The Accord consists of 70 mainly European brands and retailers, though it also includes PVH, Abercrombie & Fitch, Canada's Loblaws (Joe Fresh), several Australian businesses and a number of smaller North American buyers
Absence Perhaps more interesting than which plan major buyers belong to is the list of major buyers who belong to neither, but do have sourcing in Bangladesh. No explanation has been offered for failing to commit by these buyers, listed in Clothesource's global Top Forty Apparel Buyers:
TJX
Nike
Adidas
Hanesbrands
Limited Brands/Victoria's Secret
Levi Strauss
Ralph Lauren
Fast Retailing
Shimamura
Sogo/Seibu
Takashimaya
Legal underpinning. Ultimately,
the Alliance is a voluntary agreement: the Accord has a legal structure enabling factories accounting for most of signatories' procurement in Bangladesh, subject to commercial viability, to force buyers to maintain their volumes for two years. Accord signatories are committed by the Accord to stay with the programme for five years.
The reasons behind the difference are unclear, and in our view not being presented honestly. Walmart reject legal underpinning because it “would subject us to potentially unlimited legal liability and litigation”: unions claim this argument “has no legitimacy whatsoever”, though have never demonstrated any legal authority for such assertions. We believe the real division is that, generally, European buyers have no real alternative for the next few years to including Bangladesh in the list of countries they source from: for most North Americans, leaving Bangladesh (which has no import duty advantage over China or Vietnam for Americans), or dramatically reducing buying from it, might well become the best commercial alternative. The real fear for Americans is being "forced" into staying in Bangladesh if they do not want to. Walmart have been as unable as the unions to provide any support for their lurid claims.
The reasons behind the difference are unclear, and in our view not being presented honestly. Walmart reject legal underpinning because it “would subject us to potentially unlimited legal liability and litigation”: unions claim this argument “has no legitimacy whatsoever”, though have never demonstrated any legal authority for such assertions. We believe the real division is that, generally, European buyers have no real alternative for the next few years to including Bangladesh in the list of countries they source from: for most North Americans, leaving Bangladesh (which has no import duty advantage over China or Vietnam for Americans), or dramatically reducing buying from it, might well become the best commercial alternative. The real fear for Americans is being "forced" into staying in Bangladesh if they do not want to. Walmart have been as unable as the unions to provide any support for their lurid claims.
Management: The
Accord is managed by a Steering Committee of unions, buyers and an independent
Chairman, Dan Rees of the ILO Better Factories Programme. Bangladeshi trade
associations are complaining about their exclusion and lobbying for inclusion.
A nine-member Board of Directors has been established for
the Alliance, consisting of four retailers, four stakeholders who provide
specific expertise, and an independent board chair. The chair is expected to be named within the
next few weeks.
Factory Inspections
and Safety Commitment: Within one
year (ie by July 2014), 100 percent of all factories that conduct work with an Alliance member
will be inspected. Members have agreed to work only with factories that ensure
a safe working environment, and as a result, all have committed to refusing to
source from any factory the member determines is unsafe.
Accord Signatories have agreed to initiate an Interim
Inspection Program to speed up the assessment of Bangladesh textile industry
factories. Initial inspections will be carried out at every covered factory at
the latest within a 9 month period of July 1 (ie by March 31), and plans for
renovations and repairs put in place where necessary.
Establishing Common
Safety Standards for Factories: The Alliance will develop and put in place common
safety standards by October of this year.
The Accord strikes us as woollier on this: it “has started
to review existing standards, engage experts and liaise with the Bangladeshi
government to design and structure a program including standards, rating systems,
review of existing inspection reports, forms of inspection report and protocols
for renovation and other remediation actions necessary” It intends initially
inspecting while agreeing common standards
Result publication. Both
the Accord and the Alliance will publish inspection results through the Fair Factories
Clearing House. The Accord is clear that aggregated supplier data will be published in English and Bangla: the Alliance is clear that inspection results will be available to workers, but unclear about wider publication
Worker Training: Both
have programmes for ongoing, mandatory
training and education for factory workers and managers.
Worker Voice: The
Alliance will establish an anonymous worker hotline by November of this year
that will use mobile technology and be administered by a third party. The
Accord relies on elected worker committees
Progress Reports:
Both have broadly similar programmes of public progress reports.
Programme Funding: Each member of both the Alliance and the
Accord will contribute a specific amount to support the initiative, based upon the amount of production each
company has in the country.
Alliance members with the higher levels of production will pay
$1 million a year for five years.
Currently, the alliance safety fund is $42 million and growing, and the
alliance will designate 10 percent of the fund to assist workers temporarily
displaced by factory improvements or in the event of a factory closure for
safety reasons. The funds also will
support the selected non-governmental organization (NGO) that will implement
components of the programme. . Collectively, individual retailers have
committed over $100 million in funding, the Alliance says, for low-interest
loans and affordable access to capital in order to ensure repairs at factories
they work with are made in a timely manner. At the launch, the Alliance claimed
its members had actually committed $142 mn
Net effect
The Alliance signatories are already making great play with the fact that there is substantially more cash available right now from Alliance signatories than from Accord signatories. Whether $142 mn is remotely near the amount needed to make Bangladesh factories safe is far from clear
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