The Accord on Fire and Building Safety in Bangladesh (the Accord) was signed on May 15, 2013. It is a five-year independent, legally binding agreement between global brands and retailers and trade unions designed to build a safe and healthy Bangladeshi Ready Made Garment (RMG) Industry. The agreement was created in the immediate aftermath of the Rana Plaza building collapse that led to the death of more than 1100 people and injured more than 2000. In June 2013, an implementation plan was agreed leading to the incorporation of the Bangladesh Accord Foundation in the Netherlands in October 2013.
The agreement consists of six key components:
- A five-year legally binding agreement between brands and trade unions to ensure a safe working environment in the Bangladeshi RMG industry
- An independent inspection program supported by brands in which workers and trade unions are involved
- Public disclosure of all factories, inspection reports and corrective action plans (CAP)
- A commitment by signatory brands to ensure sufficient funds are available for remediation and to maintain sourcing relationships
- Democratically elected health and safety committees in all factories to identify and act on health and safety risks
- Worker empowerment through an extensive training program, complaints mechanism and right to refuse unsafe work.
The accord was sponsored and created by the IndustriALL Global Union and the UNI Global Union in alliance with leading NGOs, the Clean Clothes Campaign and the Workers Rights Consortium. It is an expanded version of an earlier 2-year accord that had been signed only by PVH and Tchibo.
Following the 2013 Savar building collapse on April 24, 2013 that resulted in over 1,100 deaths, there was wide global interest by both the consuming public and clothing retailers in establishing enforceable standards for fire and building safety in Bangladesh. The German government sponsored a meeting of retailers and NGOs at the beginning of May, and the meeting set a deadline of midnight of May 16, 2013 to sign up to the agreement. Numerous companies had signed up by the deadline, covering over 1,000 Bangladeshi garment factories.
In addition to schemes of building inspection and enforcement of fire and safety standards the accord requires that contracts by international retailers with Bangladesh manufacturers provide for compensation adequate to maintain safe buildings. Retailers agree to continue to support the Bangladesh textile industry despite possible higher costs. It is estimated that the total cost may be $1 billion, about $500,000 per factory. Close cooperation with the International Labour Organization and the government of Bangladesh is required. A steering committee which governs the accord is established as are dispute resolution procedures such as arbitration. The accord calls for development of an Implementation Plan over 45 days.
Since October 29, 2013, the Accord has been signed by over 200 apparel brands, retailers and importers from over 20 countries in Europe, North America, Asia and Australia; two global trade unions; and eight Bangladesh trade unions and four NGO witnesses. Some of the notable companies are listed below. For a complete list see the Bangladesh Accord website.
Most North American retailers did not sign the accord. Companies like Gap Inc. and Walmart cited liability concerns. According to spokespersons for the retail industry, American courts, which allow class actions, contingent fees, and do not require losing plaintiffs to pay legal fees, might permit liability claims against retailers in the event of another disaster which might result in substantial enforceable judgments, in contrast to European courts which generally do not allow class actions, forbid contingent fees, and require losing plaintiffs to pay winning defendants' legal fees and costs. However, as John C. Coffee, professor of corporate law at Columbia Law School, pointed out, Kiobel v. Royal Dutch Petroleum Co. might apply thus foreclosing suits by Bangladesh workers under the Alien Tort Claims Act, but this seems unlikely. It is more likely that liability would be based on contract law.
On July 10, 2013, a group of 17 major North American retailers calling themselves the Alliance for Bangladesh Worker Safety announced the Bangladesh Worker Safety Initiative. The Initiative drew criticism from labor groups who complained that it was less stringent than the Accord and lacked legally binding commitments to pay for improvements.
In two years, the Accord have inspected more than 1500 factories for fire, electrical and structural safety. Many safety issues were identified at each inspected factory. Accord said, fixing all these hazards is a huge work for the RMG industry, but safety remediation work in those factories is underway. There has been especially good progress on electrical remediation which is positive as most factory fires are caused by electrical hazards.