Burgess COMMENTARY

Peter Burgess

GSB: Supply chain hub ... Gap spearheads new alliance for Bangladeshi worker safety .... It's a step forward, writes Marc Gunther, but the question remains – who is ultimately responsible for worker safety in Bangladesh? Rana Plaza

A new alliance of US garment retailers aims to improve Bangladesh worker safety. Can it succeed where endless previous approaches have failed? Photograph: Ismail Ferdous/AP At long last, US apparel retailers have joined together to improve safety for garment workers in Bangladesh – most of them poor women, toiling in hazardous workplaces at the bottom of the bottom of the global supply chain.

Gap, Walmart, Target, Macy's, VF Corporation and a dozen other companies that formed the Alliance for Bangladesh Worker Safety say they will set common safety standards, inspect all their factories in Bangladesh, make the results public, provide loans for repairs and give workers more power to protect themselves.

An imperfect alliance

Is that sufficient? Labour rights groups say no. As the US companies unveiled their alliance in Washington, student protesters gathered outside, chanting 'Shame on Walmart' and decrying the plan as a 'fake safety scheme.'

It's not. It's a serious plan, with some money behind it, that includes a commitment to transparency, and mechanisms to enable workers to speak out about unsafe conditions. It's not perfect – the alliance's glaring flaw is a lack of participation from unions – but the US companies hope to bring in Bangladeshi and international labour groups.

Organised labour was the driving force behind a rival approach, the Accord on Fire and Building Safety in Bangladesh, which has been signed by more than 70 companies, most in Europe. Critics say the US-based alliance lacks the teeth of the EU-based accord, which is a legally binding agreement between unions and retailers in the west. The trouble is, most US apparel companies – and in particular Walmart, the largest US importer of clothing from Bangladesh – were never going to sign such an agreement. Many things have changed for the better at Walmart, but the giant Arkansas-based retailer retains a deep and abiding suspicion of unions; the feelings are assuredly mutual.

Thus, it's not surprising to learn that Gap, not Walmart, was the driving force behind the US alliance. As it happens, Gap has been wrestling with its corporate responsibility in Bangladesh for two-and-a-half years, since a fire in December 2010 killed 29 workers at a Hameen factory. The factory supplied clothes to Gap, whose brands also include Old Navy and Banana Republic. If nothing else, Gap executives, who talked with me about their efforts in Bangladesh, understand better than most how difficult it will be to fix factory conditions there.

The Bangladeshi context

Some context: Bangladesh is a country of 150 million people crowded into a country that's about the size of Iowa. Garment factories rise 10 or more storeys high, with as many as 10,000 people toiling in a single building. Fewer than half of the 14,000 factories in the country are authorised. 'Bangladesh does have a building code,' says Randy Tucker, an expert on fire safety who has consulted for Gap. 'Unfortunately, they don't enforce it,' partly because of a lack of money and expertise.

The political clout of factory owners is another obstacle to reform; so far, the Bangladeshi government has had no more success in cracking down on garment factories than the US government has had in strictly regulating Wall Street.

When global attention was trained on Bangladesh after two horrific accidents – the Tazreen factory fire last November, which killed at least 117 people, and the Rana Plaza building collapse in April, which killed more than 1,100 – some companies, most prominently Disney, chose to withdraw from country. That's no solution. If others were to follow, that would hurt workers, about 80% of whom are women who depend on their factory jobs. As a recent congressional research service report put it: 'These women, mostly Muslim, have found new independence and an increased standard of living for their families, and have, in many cases, become primary breadwinners.' About four million Bangladeshis work in garment factories, producing about $20bn (£13.2bn) in exports, most of which go to Europe.

Cut and run is not an option

Gap buys clothes from 73 factories in Bangladesh, and it has no intention of leaving. 'We helped open Cambodia. We helped open Vietnam. We want to see a sustained and successful industry in Bangladesh,' said Debbie Mesloh, the company's director of public and government affairs. 'It's not our style to cut and run.'

After the 2010 Hameen fire, Gap spent about two years talking with international NGOs and trade unions in an effort to devise a cooperative approach to worker safety. Those negotiations broke down over legal liability; the company feared that it could be held legally and financially responsible for conditions in factories that it did not own and could not control. This liability issue is also what kept Gap from signing the EU accord, its executives say.

Meantime, Gap took steps on its own. It spent more than $1m on fire-safety inspections, created a $20m fund to lend to factory owners to make needed repairs and set aside $2m for workers who miss days of work while safety problems are being fixed.

This spring, Gap was one of a handful of US companies to join the talks with the EU retailers and unions that led to the accord (Walmart did not participate). Of the US companies, Abercrombie & Fitch and PVH, the parent company of Calvin Klein and Tommy Hilfiger, ultimately signed the Accord, but Gap balked.

Competitors working together

It was then that Bill Chandler, a Gap executive, called the Bipartisan Policy Centre, a Washington think tank, setting a process into motion that led to the alliance. George Mitchell and Olympia Snowe, two former US senators from Maine, agreed to moderate the talks and their involvement helped bring senior executives from all the companies to the table. The alliance marks the first time that competitors in the garment business have ever worked together on a supply chain problem.

It's no coincidence that the alliance plan announced this week resembles Gap's unilateral effort. The 17 companies have pledged $42m over five years for inspections, training of inspectors and workers, the formation of workplace councils and an anonymous hot line so that workers can report safety violations. They have promised another $100m in what they called 'affordable capital' to loan to factory owners to make repairs.

Notably, Mitchell described that as 'the largest firm commitment' that any companies have made to the Bangladeshi garment factories. By contrast, the companies in the EU accord have promised to 'to ensure that sufficient funds are available to pay for renovations and other safety improvements,' without making specific financial pledges. Some NGOs have estimated that it could cost $3bn to make all the factories safe.

Labour rights groups, including the Worker Rights Consortium and the Clean Clothes Campaign, assailed the American plan. 'Walmart, Gap and the corporations that have chosen to join them, are unwilling to commit to a program under which they actually have to keep the promises they make to workers and accept financial responsibility for ensuring that their factories are made safe,' the groups said in a statement.

Underlying the debate is a question: who's ultimately responsible for worker safety in Bangladesh? The EU accord seems to place the primary responsibility on western retailers. Gap and those in the alliance want the Bangladeshi government and factory owners to play a bigger role. They are, in effect, arguing that less is sometimes more when it comes to corporate responsibility.

'We can drive positive, collaborative change in the country,' said Kindley Walsh Lawlor, the vice president for social and environmental responsibility at Gap. But she added: 'We want to see this country stand on its own.' Another Gap insider was more blunt, saying: 'We'd like to see the factory owners have some skin in the game.'

It's too soon, of course, to say which approach will work best. All we know for now is that nothing that anyone has done so far has worked very well.

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