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Wed May 1, 2013
Business

Deal To Protect Bangladeshi Factory Workers Still Elusive

Originally published on Wed May 1, 2013 7:48 pm

This week, major retailers including Wal-Mart, Gap and others met with labor activists in Germany, hoping to hammer out a deal to improve working conditions in Bangladesh.

The meeting came less than a week after a devastating building collapse in the Bangladeshi capital, Dhaka, killed more than 400 workers. At the meeting, activists pushed retailers who use factories in Bangladesh to start spending their own money to make those workplaces safer.

The proposed deal would have an enforceable arbitration clause, would require the use of highly qualified fire and safety inspectors — and require those inspection reports to be made public. It would also mandate that the Western brands pay for any needed repairs. Workers would also have the right to refuse to enter buildings they believe are unsafe.

Tchibo, a large German retailer, and PVH, which owns Calvin Klein and Tommy Hilfiger, signed onto the agreement several months ago. But because the deal requires four signatories, labor activists need two more companies to sign on before it could go into effect. They've set a deadline of May 15 to strike a deal.

According to some of the meeting negotiators, among the U.S. retailers in attendance, Gap is probably closest to the labor activists on the details of the deal. A couple of European retailers caught up in the recent scandal surrounding the building collapse are now under a lot of pressure and could also end up signing on.

But Wal-Mart, the 900-pound gorilla in the industry, is still pretty far away from making any such detailed commitments.

Both Gap and Wal-Mart, which have announced their own plans for improving working conditions in Bangladesh, are balking at three key features of the proposed deal. They are reluctant to sign any legally enforceable agreement, including any binding arbitration. They're also reluctant to commit to paying for factory repairs. Some factory owners in Bangladesh are quite wealthy and could afford to make needed repairs without help.

Finally, many big brands, including Gap and Wal-Mart, don't want to make the results of their factory inspections public. Last year, Gap conducted more than 2,000 factory audits, while Wal-Mart paid for more than 9,000. But the audits are often damning; most are done by independent, for-profit companies and what they find rarely sees the light of day.

Rana Plaza, the factory near Dhaka that collapsed last week, was found in an audit to have met the Business Social Compliance Initiative Code of Conduct, a standard that many European companies have signed onto. But BSCI won't release the results of those audits — or even say who the commercial auditors were.

The Tazreen factory fire, which killed 112 people near Dhaka in November, was audited for Wal-Mart less than a year before. Auditors found major fire safety problems, but those audit results became public only after an activist risked her life to re-enter the still-burning building and salvage the records.

Labor activists say workers at these factories should know about safety violations uncovered by these audits before they have to show up for work.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

AUDIE CORNISH, HOST:

Earlier this week, major retailers, including Wal-Mart, Gap and others, met with labor activists in Germany. Their goal: to hammer out a deal to improve working conditions in Bangladesh. The meeting came less than a week after a devastating building collapse there killed more than 400 workers.

NPR's Steve Henn has been covering the story and joins us now. And, Steve, what more can you tell us about this meeting in Germany?

STEVE HENN, BYLINE: Well, activists are pushing retailers like Wal-Mart and the Gap and others who use factories in Bangladesh to actually start spending their own money to try and make these factories safer. The deal would have an enforceable arbitration clause. It would require the use of highly qualified fire and safety inspectors. These inspection reports would be made public, and repairs would be paid for by these Western brands. Workers would also have the right to refuse to enter buildings if they believe they were unsafe.

A big German retailer and PVH, which owns Calvin Klein and Tommy Hilfiger, have actually signed on to this agreement. They did that a couple of months ago. However, it only goes into effect if there are four signatories. So labor activists need two more before any of this actually happens. And they've set a deadline of May 15th to actually strike the deal.

CORNISH: But is there a sense of which brands might be most likely to commit to these proposals?

HENN: There are a couple European retailers who've been caught up in the recent scandal surrounding the building collapse, and they're under a lot of pressure and could sign. According to some of the negotiators at the meeting, the big U.S. retailers who were there, of those, probably Gap is the closest to labor activists on the details of the deal. Wal-Mart, which is obviously the 900-pound gorilla in this industry, is pretty far away from making any of these kinds of detailed commitments.

And both the Gap and Walmart have announced their own plans for improving working conditions in Bangladesh, but they're balking at three key features of the deal. These companies are reluctant to sign any sort of legally enforceable agreement, and this obviously includes binding arbitration.

They're also reluctant to commit to paying for repairs. They say it's problematic. Obviously, some Bangladeshi factory owners are quiet wealthy on their own and could afford to make some of these repairs without help. And finally, many of the big brands, including Gap and Walmart, don't want to make the results of their factory inspections public.

CORNISH: But why not?

HENN: Well, these audits are often damning. Last year, the Gap conducted more than 2,000 factory audits. Wal-Mart paid for more than 9,000. Most of these are done by independent, for-profit companies. What they find usually never sees the light of day. Rana Plaza, the factory that collapsed last week, was audited and found to have met something called the BSCI code of conduct. This is a standard lots of European companies have signed on to. But BSCI won't release the results of those audits or even say who the commercial auditors were.

The Tazreen factory, which burned in this fall killing 112 people, was audited for Wal-Mart less than a year before the fire. Auditors found major safety problems there, but the results of that audit only became public when an activist risked her life, went into that still burning building and salvaged the records. You can see those documents on our website. But activists say worker at these factories should know about the safety violations these audits find before they actually have to show up for work.

CORNISH: That's NPR's Steve Henn. Steve, thank you.

HENN: You're welcome. Transcript provided by NPR, Copyright NPR.

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