International brand to pay $2.3 million to fix safety hazards in Bangladesh factories

Global Unions IndustriALL and UNI have reached an historic US$2.3 million settlement in an arbitration case against an international brand for failing to meet its health and safety obligations under the legally binding Bangladesh Accord on Fire and Building Safety.

The brand, whose name was not disclosed under the terms of the settlement, will pay $2 million to fix safety hazards in over 200 Bangladeshi supplier factories and contribute $300,000 to a Supply Chain Worker Support Fund managed by the two Global Unions.

The arbitration settlement confirmed that the brand had failed to ensure that its suppliers completed corrective action plans in a timely manner to eliminate fire, electrical and structural safety hazards. The brand had also failed to ensure that it was financially feasible for the suppliers to complete the necessary factory upgrades.

This is the second of two arbitration cases that have compelled brand signatories to the Accord to live up to their obligations to make conditions safe for the workers who make their products in Bangladesh.

To date, the Accord’s independent factory inspection program has inspected more than 1,800 factories producing for approximately 220 brands and has identified 118,500 safety hazards. According to the Accord, 83% of the hazards have been remediated and 500 factories have completed all the required safety repairs.

Brands urged to sign renewed Accord

MSN and the three other witness signatories to the Accord – Clean Clothes Campaign, International Labor Rights Forum and Worker Rights Consortium – are contacting apparel brands and retailers that signed the original five-year Accord, urging them to sign the renewed Accord for three more years, beginning in May 2018.

To date, only 60 of the 220 signatory companies have signed the renewed Accord.

On January 30, the Clean Clothes Campaign organized an action at a meeting in Amsterdam, holding banners and handing out pens to the brands attending the meeting to encourage them to sign the renewed Accord.

Now the call from the witness signatories has been joined by a group of major US institutional investors. On January 25, the US-based Interfaith Center on Corporate Responsibility (ICCR) released a statement endorsed by 147 institutional investors representing $3.7 trillion in managed assets, appealing to global brands to recommit to the three year extension of the Accord.

A copy of the statement will accompany letters being sent to all the brands that have not yet renewed their commitment to protect worker health and safety in Bangladesh, urging them to sign the 2018 Accord in the first quarter of this year. 

The statement also calls on companies that were part of the Alliance on Bangladesh Worker Safety, a company-controlled initiative that is disbanding in 2018, to join the Accord in order to maximize collective leverage to complete the needed safety reforms.

To help encourage brands to sign the renewed Accord, click here.