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H&M and Zara sign a worker safety deal in Bangladesh: Will Gap dare to hold out?

H&M and Inditex, the world’s two biggest fashion retailers, just signed up for a safety agreement designed to prevent future factory tragedies in Bangladesh, where more than 1,000 people have died in the collapse of the Rana Plaza  complex.

H&M, Inditex’s Zara, and the Gap were not among the dozens of retailers that made clothes at Rana Plaza. But the horror of the collapse—epitomized by a heart-rending photo of two victims found dead in an embrace—prompted widespread calls to fix the regulation and oversight of Bangladeshi factories, which have suffered numerous deadly fires and other disasters in recent years.

The “Accord on Fire and Building Safety in Bangladesh” may not sound like a huge deal. But it represents a big shift in how multinational companies deal with their employees in the developing world. The accord requires public, independent safety inspections, as well as mandatory repairs and renovations of defective buildings, which manufacturers and brands must pay for. And it is overseen by a board that includes companies, workers and their unions. It was written so that it wouldn’t go into effect until four major manufacturers signed up—a requirement that has now been met, as H&M and Inditex join PvH, which owns brands including Calvin Klein and Tommy Hilfiger, and the German retailer Tchibo.

It also shines a spotlight on hold-out companies like the Gap, which walked out of discussions over the accord last year. “This increases the pressure on Gap, which in the past was thought to be a leader in social compliance,” said Judy Gearheart, executive director of the International Labor Rights Forum. “Them walking away last summer really created some delays. We need them back at the table and engaged.” A spokeswoman for Gap was not immediately available for comment.

The adoption of the new safety agreement gives consumers a clear option: They can now choose to buy from retailers that have signed up for the accord, or from those that haven’t.

Update:  Tesco, Primark and C&A have also signed up.

 

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