HBC, Canadian Tire among retailers in pact for better work conditions in Bangladesh

A group of 17 North American retailers and brands have made a formal five-year pact to improve working conditions in Bangladesh, where a major garment factory collapse in April killed more than 1,100 workers.

The Bangladesh Worker Safety Initiative was developed over the past five weeks under the guidance of former U.S. senators George J. Mitchell and Olympia Snowe, who acted as independent facilitators at the Bipartisan Policy Center in Washington, D.C., according to a release put out Wednesday by the retailers’ alliance.

The retailers, which include Hudson’s Bay Co., Canadian Tire, Walmart, Target and Gap, have set out timelines and accountability for inspections and training as part of a five-year plan, at a shared cost of about $42 million so far.

The Canadian Apparel Federation and Retail Council of Canada are also among the industry associations supporting the initiative.

A recent report from Marsh noted that April’s Rana Plaza tragedy highlighted the major risks faced by the retail industry. Some of those include brand and reputational risk, compliance risk, supply chain risk, and business interruption costs, according to the report.

“Retailers and suppliers should use this tragedy as a catalyst to more fully identify and understand their operational and supply chain risk exposures, reform and strengthen workforce safety practices, and improve supply chain and reputational risk resiliency,” Tracy Knippenburg Gillis, Global Reputational Risk and Crisis Management Practice Leader for Marsh Risk Consulting noted.

The new initiative calls for inspections of all of the alliance member factories within the first year; common safety standards to be developed within the next three months; inspections results that are transparently shared; and that all alliance factories actively support the democratic election and successful operation of Worker Participation Committees (WPC) at each factory.

The pact also includes a role for an independent chair of the board of directors responsible for oversight.

“We sought and received input from a wide range of interested parties, including, among others, the governments of Bangladesh and the United States, fire and safety experts, and worker representatives,” former senator Mitchell noted in the statement.

“The discussions were detailed and extensive. While there were many differences, in interests and on issues, the dominant common theme was the importance, indeed the necessity, of developing and implementing a meaningful plan of action to dramatically improve worker safety in the garment industry in Bangladesh.”