Apparel Brand to Pay $2.3M to Remedy Factory Hazards in Bangladesh

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Bangladesh

Bangladesh is taking additional steps to improve factory conditions nationwide and ensure that workers’ safety comes first in its garment sector.

Global unions IndustriAll and UNI Global Union reached a $2.3 million settlement with a multinational clothing brand to remedy hazardous workplace conditions in Bangladesh.

Reached through an arbitration process under the Bangladesh Accord for Fire and Building Safety—a legally binding agreement between brands and trade unions that promotes safer work conditions in Bangladesh’s garment sector and protects almost 2.5 million Bangladeshi workers—the settlement demonstrates one of the largest payments made by a clothing brand to mitigate potential safety hazards in factories.

The clothing brand, which remains anonymous under the settlement’s terms, will pay $2 million to improve work conditions at more than 150 factories in Bangladesh. Additionally, the clothing brand will donate $300,000 to IndustriAll and UNI Global Union’s joint Supply Chain Worker Support Fund, which fortifies global unions’ efforts to improve work conditions and wages for garment workers worldwide. The settlements were made possible by Covington & Burling LLP—a law firm representing both global unions.

“This settlement shows that the Bangladesh Accord works. It is proof that legally binding mechanisms can hold multinational companies to account. We are glad that the brand in question is now taking seriously its responsibility for the safety of its supplier factories in Bangladesh,” said Valter Sanches, general secretary of IndustriAll.  “Their financial commitment serves as an example for other brands to follow.”

[Read more about Bangladesh’s garment sector: Alliance Says Bangladesh Factories “Demonstrably Safer” Than Pre-Rana Plaza]

In 2016, the global unions presented the case to the Permanent Court of Arbitration—an intergovernmental organization at The Hague—and stated that the clothing brand’s lack of timely compliance left thousands of garment workers in dangerous factory conditions. Both unions also argued that the clothing brand did not hold itself financially accountable for its factories to remedy safety problems, which is a mandatory requirement of the Accord. When the case was filed in October 2016, the brands’ known supplier factories did not complete required repairs and all of them had at least one high-risk hazard that was not improved—including lack of fire alarms and sprinkler systems.

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Following the unions’ arbitration claim, several of the brands’ contracted factories took the steps to improve work conditions, and some achieved higher remediation rates from October 2016 to October 2017. Despite some progress, some of the brands’ contracted factories have not carried out safety improvements—leaving thousands of garment workers at risk. According to the Accord, the brands’ safety improvements must be completed by the Accord’s expiration date in May 2018.

The settlement reflects the spirit of the Bangladesh Accord for Fire and Building Safety, which was formed following the Rena Plaza disaster in 2013. The Accord, which legally required apparel brands’ contractors to remedy fire, electrical and structural safety issues in Bangladesh garment factories, identified more than 118,500 safety hazards and audited more than 1,800 factories in Bangladesh. It recently announced that 83 percent of workplace dangers identified by the Accord were fixed, due to 500 Accord factories completing almost all of required safety repairs.

A second Accord will come into effect in June 2018—extending the Accord’s protections until May 31, 2021, unless the Accords’ brand signatories, Accord trade union signatories, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the International Labor Organization (ILO) and Bangladesh’s government agree that specific safety improvements are met before this date. Companies that signed the 2018 Accord include Adidas, H&M, PVH and other leaders in the global fashion sector.

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