Traffic accidents in clothing factories in Bangladesh have shocked the world. What are the companies in our sustainable investment universe doing on much needed prevention?
In November 2012, at least 117 people died in a fire in the Tazreen Fashion factory. In another incident in April 2013, Rana Plaza collapsed in what is considered to be the deadliest garment-factory accident in history. In this disaster, 1129 people died and a further 2500 people were injured.
In response, the Bangladesh Accord on Fire and Building Safety (‘the Accord’) was initiated by unions and non-governmental organisations (NGOs). After its’ release on 15 May 2013, the signatory companies committed to the goal of a safe and sustainable Bangladeshi Ready Made Garment (RMG) industry. The agreement includes independent safety inspections with public reports, mandatory repairs and renovations, the obligation by brands to underwrite the costs of safety upgrades, and repercussions for suppliers that refuse to improve conditions, including the termination of business. Several companies that have committed to the Accord are part of the Triodos sustainable investment universe. These companies include for example H&M, Inditex, Marks & Spencer, Carrefour and Sainsbury’s. Not all companies in the investment universe have committed to the Accord. One such company is US-headquartered GAP Inc.
Upon closer look
Through our conversation with GAP we learned however that they have been fully focussed on their responsibility in Bangladesh since a fire in December 2010 killed 29 workers at one of their supplier factories. In October 2012, a month before the Tazreen fire, GAP launched a Building & Fire Safety Plan and has since inspected almost all 78 factories that it sources from in Bangladesh. GAP engaged safety experts to assess each of the factories and provided funding for necessary improvements. GAP also supported workers who were temporarily unable to work during the work done on the factories.
The key elements of the plan form the foundation of the Alliance for Bangladesh Worker Safety (‘the Alliance’), a North American initiative that was launched on 10 July 2013. GAP is a founding member of this initiative.
A promising initiative, the Alliance has nevertheless been criticised for being company-controlled and self-regulatory. Worker representation is missing, and member-brands are not obligated to contribute to renovation and repair of factories in Bangladesh.
In response GAP states that their alliance includes the role of local governments. GAP believes lasting change will only be achieved when all stakeholders, including local government, are engaged in the efforts. Furthermore it claims that the Alliance will support the democratic election and operation of Worker Participation Committees at each factory and includes provisions so that concerns can be raised about factory conditions without fear of retaliation. The response that GAP takes worker-safety very seriously and adequately acts on its responsibility has satisfied Triodos Research.
What about other non-signatory companies?
In cooperation with other investors, Triodos Research will concentrate engagement efforts with other Textiles and Apparel sector companies in our sustainable investment universe that have not yet committed to either the Accord or the Alliance. These companies include for example Nike and Adidas, and we expect to be able to inform our stakeholders about the results in the coming months.