A Turkish firm has become the latest global clothing retailer to sign up to a new international accord calling for improved safety of garment workers in Bangladesh after more than a 1,000 workers were killed in a building collapse in April.
Despite the move by the Turkey’s LC Waikiki and the fact nearly 45 global brands have already signed up, the IndustriALL Global Union, one of the organisations behind the accord, said it was unlikely many clothing retailers in the Arab world would be participating in the initiative.
“We have not had time yet to seriously invest in expansion into other countries and regions. We just got our first Turkish (LC Waikiki) and Australian (Kmart and Target) signatories, and we are still expanding in Europe and North America,” Jyrki Raina, general secretary of the IndustriALL Global Union, which represents 50 million workers in 140 countries in the mining, energy and manufacturing sectors, told Arabian Business.
“The Arab world is of course very interesting. However, a problem factor is that trade unions are illegal in Saudi Arabia and the UAE, which doesn't necessarily contribute to the interest of retailers from the region in signing an Accord with IndustriALL Global Union and UNI Global Union,” he added.
The Bangladesh Accord was set up by IndustriALL and UNI Global Union, which represents 20 million service sector workers around the world through 900 affiliated unions, after an outcry against following the collapse in April of the Rana Plaza factory complex which killed 1,129 people and a fire at another factory which last year killed 112.
“This is standard setting work from the over 40 founding signatory clothing brands of the legally binding Accord with IndustriALL Global Union and UNI Global Union. Workers everywhere will now seek to expand this historic Accord to other countries and to other industrial sectors,” Raina said in a statement last month.
“We are invigorated to work with this critical mass of market leading clothing brands and retailers to turn the sentiments of the Accord into reality in Bangladesh.”
UNI Global Union General Secretary, Philip Jennings added: “It is time to roll up our sleeves and get on with the urgent task of improving factory safety in Bangladesh. Work is now beginning on the implementation phase of the Accord.”
The accord has signed up 45 major organisations, such as Abercrombie & Fitch, Benetton, H&M, John Lewis, Marks and Spencer, Primark and Sainsbury's and is due to be implemented on July 8.
LC Waikiki, which was started in France in 1985, is now one of the leading apparel retailer in Turkey with nearly 400 stores, with about 50 stores abroad in countries such as Romania, Egypt and Bulgaria.
Some US retailers, including, have said they would not join the European pact without changes to the way conflicts are resolved in the courts.
Wal-Mart Stores, the world's largest retailer, said it does not plan to sign the accord because it believes its own stepped-up safety inspection plans will get faster results.
Now, companies are choosing whether to sign onto the accord, stick to their own safety programs, or perhaps join a possible pact being discussed by North American trade groups.
The pact includes a binding arbitration process that would be enforceable in the courts of the country where a company is domiciled, according to the text of the agreement that was released on Wednesday. Binding arbitration typically restricts the ability of the parties involved to appeal any decision in court.
In addition, companies that sign on must fund activities of a steering committee, safety inspector and training coordinator, contributing up to $500,000 per year for each of the five years of the agreement.
The Washington, DC-based National Retail Federation criticised the accord. It "veers away from commonsense solutions and seeks to advance a narrow agenda driven by special interests," the trade group's president and chief executive, Matthew Shay, said.
The minimum wage for Bangladesh's garment workers is about $38 a month, although many factories pay more than that to attract workers in a tight labour market. Bangladesh ranked last in minimum wages for factory workers in 2010, according to World Bank data.
North American retailers discussed forging their own Bangladesh safety agreement as an alternative to Europe's plan, although details were sparse.
Despite the differences between US and European companies, the fact that the world's biggest retailers were ready to act indicates that the latest tragedy has begun to bring about change.