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.
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