Accord on Fire and Building Safety in Bangladesh
The Accord on Fire and Building Safety in Bangladesh (the Accord) was signed on 15 May 2013. It is a five-year independent, legally binding agreement between global brands and retailers and trade unions designed to build a safe and healthy Bangladeshi Ready Made Garment (RMG) Industry. The agreement was created in the immediate aftermath of the Rana Plaza building collapse that led to the death of more than 1100 people and injured more than 2000. In June 2013, an implementation plan was agreed leading to the incorporation of the Bangladesh Accord Foundation in the Netherlands in October 2013.
The agreement consists of six key components:
- A five-year legally binding agreement between brands and trade unions to ensure a safe working environment in the Bangladeshi RMG industry
- An independent inspection program supported by brands in which workers and trade unions are involved
- Public disclosure of all factories, inspection reports and corrective action plans (CAP)
- A commitment by signatory brands to ensure sufficient funds are available for remediation and to maintain sourcing relationships
- Democratically elected health and safety committees in all factories to identify and act on health and safety risks
- Worker empowerment through an extensive training program, complaints mechanism and right to refuse unsafe work.
Creation of the accord
The accord was sponsored and created by the IndustriALL Global Union and the UNI Global Union in alliance with leading NGOs, the Clean Clothes Campaign and the Workers Rights Consortium. It is an expanded version of an earlier 2-year accord that had been signed only by PVH and Tchibo.
Following the 2013 Savar building collapse on 24 April 2013 that resulted in over 1,100 deaths, there was wide global interest by both the consuming public and clothing retailers in establishing enforceable standards for fire and building safety in Bangladesh. The German government sponsored a meeting of retailers and NGOs at the beginning of May, and the meeting set a deadline of midnight of 16 May 2013 to sign up to the agreement. Numerous companies had signed up by the deadline, covering over 1,000 Bangladeshi garment factories.
In addition to schemes of building inspection and enforcement of fire and safety standards the accord requires that contracts by international retailers with Bangladesh manufacturers provide for compensation adequate to maintain safe buildings. Retailers agree to continue to support the Bangladesh textile industry despite possible higher costs. It is estimated that the total cost may be $1 billion, about $500,000 per factory. Close co-operation with the International Labour Organization and the government of Bangladesh is required. A steering committee which governs the accord is established as are dispute resolution procedures such as arbitration. The accord calls for development of an Implementation Plan over 45 days.
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Since 29 October 2013, the Accord has been signed by over 200 apparel brands, retailers and importers from over 20 countries in Europe, North America, Asia and Australia; two global trade unions; and eight Bangladesh trade unions and four NGO witnesses. Some of the notable companies are listed below. For a complete list see the Bangladesh Accord website.
Rival American plan
Most North American retailers did not sign the accord. Companies like Gap Inc. and Walmart cited liability concerns. According to spokespersons for the retail industry, American courts, which allow class actions, contingent fees, and do not require losing plaintiffs to pay legal fees, might permit liability claims against retailers in the event of another disaster which might result in substantial enforceable judgments, in contrast to European courts which generally do not allow class actions, forbid contingent fees, and require losing plaintiffs to pay winning defendants' legal fees and costs. However, as John C. Coffee, professor of corporate law at Columbia Law School, pointed out, Kiobel v. Royal Dutch Petroleum Co. might apply thus foreclosing suits by Bangladesh workers under the Alien Tort Claims Act, but this seems unlikely. It is more likely that liability would be based on contract law.
On 10 July 2013, a group of 17 major North American retailers calling themselves the Alliance for Bangladesh Worker Safety announced the Bangladesh Worker Safety Initiative. The Initiative drew criticism from labour groups who complained that it was less stringent than the Accord and lacked legally binding commitments to pay for improvements.
In two years, the Accord have inspected more than 1500 factories for fire, electrical and structural safety. Many safety issues were identified at each inspected factory. Accord said, fixing all these hazards is a huge work for the RMG industry, but safety remediation work in those factories is underway. There has been especially good progress on electrical remediation which is positive as most factory fires are caused by electrical hazards. The Government of Bangladesh has said that the Accord will not be extended at the end of its five-year term.
- "Major Retailers Join Bangladesh Safety Plan". The New York Times. 13 May 2013.
- "We made it! – Global Breakthrough as Retail Brands sign up to Bangladesh Factory Safety Deal 16.05.2013 The world's leading retail labels commit to the Accord on Fire and Building Safety in Bangladesh before the midnight deadline. The Accord now covers more than 1000 Bangladeshi garment factories. Implementation starts now!". IndustriALL Global Union. 16 May 2013. Retrieved 23 May 2013.
- Steven Greenhouse (22 May 2013). "U.S. Retailers See Big Risk in Safety Plan for Factories in Bangladesh". The New York Times. Retrieved 23 May 2013.
- "Accord on Fire and Building Safety in Bangladesh" May 13, 2013 accessed 23 May 2013, sections 22 and 23 of the accord: "...participating brands and retailers will negotiate commercial terms with their suppliers which ensure that it is financially feasible for the factories to maintain safe workplaces and comply with upgrade and remediation requirements instituted by the Safety Inspector."
- "Global brands pull together on Bangladesh safety deal". IndustriALL press release. 23 May 2013.
- "Who has signed the Bangladesh safety accord – update". Just Style. 27 July 2015.
- "Signatories". Bangladesh Accord website. 26 August 2015.
- Steven Greenhouse & Stephanie Clifford (10 July 2013). "U.S. Retailers Offer Plan for Safety at Factories". The New York Times. Retrieved 10 July 2013.
- Ariful Haq (24 May 2015). "Accord Marks 2nd Anniversary – Bangladeshi RMG on its way to become safe". BanglaApparel.com. Archived from the original on 5 March 2016. Retrieved 9 September 2015.
- Tenure of Accord and Alliance won’t be extended, says Government of Bangladesh, 8 December 2015, accessed 23 May 2017
- Clifford, Stephanie; Steven Greenhouse (2 September 2013). "Fast and Flawed Inspections of Factories Abroad". The New York Times. p. A1 ff.