In the months since the devastating collapse of the Rana Plaza garment factory in Bangladesh, which killed more than 1,100 workers, U.S. and European retailers that use Bangladeshi labor in their supply chains have been racing to form an appropriate response and plan of action. Unfortunately, this month, major U.S. retailers appear to have turned the efforts into a race to the bottom. To learn how and see a fantastic graphic capturing these negotiations….click to read more….
Critics (example from TIME and The Washington Post) have little faith that signatories will in fact follow through with their obligations under this plan — after all, there are many examples suggesting large companies don’t have the best track record when it comes to fulfilling non-binding promises (e.g., this report) — and many fear that even if the Alliance plan is fully implemented as written, it will not be anywhere near enough to ensure safety for Bangladesh’s 4.5 million factory workers. For example, Alliance signatories have so far raised $42 million for a “Worker Safety Fund” that is meant to pay for the bulk of the plan’s goals—factory inspections, worker training and empowerment efforts, and support for workers who are displaced from factories during remediation activities. Signatories will additionally make roughly $100 million available to factory owners in “low cost” capital loans for improvements. But Liana Foxvog of the International Labor Rights Forum (ILRF)estimates that necessary improvements will cost somewhere between $300,000 and $500,000 per factory; up to $1 billion in total. $142 million is a drop in the bucket, both as compared to what will be required to make meaningful changes in factory safety andcompared to the $447 billion that Wal-Mart pulled in in revenue in 2011 (or $15.7 billion in profit). Even considering that U.S. retailers only account for 25% of exports from Bangladesh (in contrast to the 40% share that European retailers take), the signatories to this U.S. Alliance will hardly be pulling their weight, even if they surprise everyone and follow through on each and every one of these legally unenforceable promises.
The Alliance plan can be criticized on other significant points, too. While the plan commitsto establishing a Committee of Experts in fire and building safety, it is careful to reserve to the Alliance’s own Board of Directors the right to select, accredit, and approve the experts who will be on the committee, and the plan gives no indication of what happens in the long-term when a factory is found to be non-compliant in either its regular activities or in carrying out any recommended remediation. This plan structure could easily lend itself to internal biases or pressure, given that the very companies that will be impacted by the committee’s decisions and findings are the sole selectors of committee members. The promise of impartiality rings somewhat hollow, especially when the Alliance could have stipulated that an entirely independent body, such as the Fair Labor Association, would select experts and carry out transparent audits and inspections.
Finally, there is marked dissatisfaction with the process through which the Alliance plan was formed. Brian Finnegan of the AFL-CIO points out, “The only people negotiating [the plan] are companies… There was no one on the other side of the table here.” Human rights initiatives often suffer from a failure to include any meaningful consultation with the people who will actually be impacted; and that failure in communication often leads to the failure of the initiative as a whole. Undoubtedly there were a lot of smart, well-meaning people in the room when this Alliance plan was negotiated, and surely they came up with a number of accurately framed issues and solutions related to Bangladeshi factories, but without consulting with representatives of the people who live the realities of that work every day, Alliance signatories cannot truly understand or begin to address the range of issues incumbent in such a complex setting.
The Alliance plan stands in stark contrast to its European counterpart, the Accord on Fire and Building Safety in Bangladesh (text available here), which was rolled out in May and to date has more than 80 signatories—mostly European retailers, but also an increasing number of American companies, including Abercrombie and Fitch, PVH (owner of Calvin Klein and Tommy Hilfiger), American Eagle, and Sean John. The European Accord was written in consultation with workers and their representatives, and creates a legally binding agreement that obligates signatories to attend arbitration when workers bring a grievance to the arbitration committee, and to pay damages when the arbitrator finds in favor of the worker(s). That alone makes the European Accord significantly stronger than the U.S. Alliance.
Further, the European Accord provides for regulations on safety inspections, requires that inspections be carried out within the next nine months, and stipulates that retailers—not factory owners—will pay for factory repairs. To facilitate inspections and in the interest of transparency, signatories will be required to make public a list of more than 1,000 names and addresses of Bangladeshi factories they use by July 15 so that teams of international and local inspectors can begin identifying significant hazards. The Accord specifically protects the right of workers to refuse to do dangerous work or to enter a dangerous building is protected (a right that is not mentioned anywhere in the U.S. Alliance plan). Finally, the Accord commits its signatories to continuing to operate in Bangladesh for at least two years, cutting off some of the incentive to just decide that it’s too much work to fix Bangladesh and cheap (read: still dangerous) labor can be found elsewhere.
The Accord does have two significant shortcomings—both shared with the U.S. Alliance plan. First, none of the companies have agreed to any process that will provide remedies and compensation directly to the victims of the Rana Plaza collapse—help that is drastically needed for a population that struggled significantly before their livelihoods were lost. Second, the Accord and the Alliance both only address “first-tier” suppliers, not factories run by subcontractors. Many companies include clauses in their contracts with factories that ban any subcontracting to other, unapproved factories; however, those bans have proven to be largely ineffectual. Companies seem to shy away from acknowledging that subcontracting is broadly practiced, and that it exposes workers to as much or more danger than they face in first tier factories. However, until reality is faced and a plan is formed that will address the safety of all factories, tragedies like that at Rana Plaza are likely to repeat.
At the end of the day, the European Accord has been subject to far more praise, and far less criticism, than the U.S. Alliance plan, and it is easy to see why: it creates a much tighter timeline for specific action to take place, it is more transparent and accountable to the public, and, most importantly, it creates binding obligations that make it much more likely that the complex issues in Bangladesh’s factories will be meaningfully addressed. U.S. companies had the opportunity to sign on to a plan that has great potential—and some laudable companies took that opportunity. It is unfortunate that the major U.S. players decided to fragment the international efforts to improve safety in Bangladesh, and to commit themselves only in the most symbolic fashion to one of the most pressing human rights issues of our time. Don’t the Bangladeshi’s deserve better? Don’t they deserve a race to see who can save the most lives, instead of a race to see who can keep saving the most money?
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