Retailers rush to sign Bangladesh accord (well, some)

H&M and Inditex-owned Zara have joined a host of EU high street brands in signing an accord to improve safety conditions in Bangladeshi factories. 'We do not want slave labour,' said Abdul Latif Siddiqui, Bangladesh's minister for textiles.

by Rebecca Burn-Callander
Last Updated: 24 Oct 2013

Following the clothing factory fire that killed 1,100 workers in Bangladesh last month, many European retailers have agreed to sign a new contract, raising salaries for workers and vowing to improve factory conditions across the board.

The Accord on Fire and Building Safety in Bangladesh is legally binding and requires retailers to pay for factory repairs and enforce safety standards. So far, H&M, Zara, C&A, Tesco and Primark have all signed up. However, US clothing chains Gap, Walmart and Sears have decided against opting in to the voluntary agreement, demanding changes to the contract's dispute resolution clauses.

After the collapse of the Rana Plaza factory, workers from across the textile industry rebelled against their poor working conditions and pitiful pay, forcing as many as 300 factories to cease production in the Ashulia industrial area near Dhaka. As a result, ministers have now altered the country's labour law to allow garment workers to form unions. Government has also increased the minimum wage in the sector to $38 (£25) a month. However, this is still one of the lowest wage rates in the world.

Retailers have little choice but to sit up and pay attention to the ongoing unrest. Bangladesh boasts the second-largest textile industry after China and some 60% of the the nation's output of garments is sold across the EU. The deadline for retailers to sign up is 15 May. Without a significant number of signatures on that accord, however, its potential for truly improving working conditions in Bangladesh are limited.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today