With the Accord agreement on Fire and Building Safety in Bangladesh set to expire in the next three months, the Bangladesh garment industry once again faces the risk of natural and human disasters like the Rana Plaza Factory disaster in 2013. The Accord on Fire and Building Safety was signed by 200 European brands and retailers like Inditex, H&M and Primark, labor unions and Bangladeshi factory owners in 2013. As per New York Times, the agreement made periodic inspections at Bangladesh apparel factories mandatory for their owners. Factory owners also had to collectively contribute funding for safety training and some factory improvements. Any companies that violated the terms could be fined or expelled from the group.
The agreement was originally set to expire on May 31, 2021. However, brands and union’s demands for a replacement deal led to an extension of the expiration date to August 31. Yet, the future of the Bangladesh garment industry looks uncertain as it struggles to monitor its annual $34 billion apparel exports.
Global pioneer of worker safety
The world’s second largest garment exporter, Bangladesh houses nearly 4,500 export facilities. These facilities employ over 4.5 million people making them highly vulnerable to fire and electrical hazards. In the last five years, Bangladesh fixed 120,000 such hazards with the help of the Accord agreement. Nearly 200 factories with two million workers lost their contracts due to poor safety standards after 38,000 inspections. The Accord was thus known as a pioneer of global worker safety and auditing in the industry. The agreement ensured garment manufacturers made the required changes in factories besides improving their supply chain transparency, says Michael Posner, Professor-Ethics and Finance, Stern School of Business, New York University. The agreement went through a period of transition in the last 12 months with the Ready Made Garments Sustainability Council proposing a new framework excluding key elements of the Accord such as individual brand accountability and monitoring by third-party auditors. Monitored by BGMEA, the agreement aims to give more power to trade unions, says Christy Hoffman, General Secretary, UNI Global Union
New agreement minimizes brand accountability
However, Christina Hajagos-Clausen, Director-Textiles and Garments, IndustriALL, alleges, the proposal by brands is motivated by their desire to include more American brands such as Walmart in the agreement. The proposal minimizes individual accountability by enticing North American retailers to contribute towards collective safety monitoring, adds Hajagos-Clausen said. It reduces the overall credibility of the program, making it impossible to be used as a blueprint for worker safety globally, she says further.
A boon for Bangladesh workers
Bangladeshi factory workers are however, looking forward to this agreement. The pandemic has devastated the country’s apparel sector with factories losing orders worth $3.5 billion. Investments needed to meet safety standards have already squeezed profit margins of small and size garment factories. Order reductions and cancellations are further adding to their financial constraints. They also face the uphill task of upgrading their factories to new COVID-19 related safety measures.
Though Bangladesh has launched many initiatives, it still has a long way to go in terms of worker safety, says Posner. The country has over 5,000 garment factories, of which only 2,500 factories are covered by the Accord and Alliance. The remaining factories continue to operate in unsafe conditions. A successor to Accord is thus the need of the hour, adds Posner.