Business

H&M and Zara to sign Bangladesh safety accord

  • 14 May 2013
  • From the section Business
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Bangladeshi Army personel stand as they continue the second phase of the rescue operation
The collapse of the factory is being called Bangladesh's worst industrial disaster

European retailers, including Hennes & Mauritz and Inditex which owns Zara, have said they will sign an accord to improve safety conditions in factories in Bangladesh.

The move comes three weeks after a garment factory building collapsed, killing more than 1,100 people.

Hundreds of factories were forced to close due to recurrent worker unrest sparked by the disaster, officials say.

The government has since announced steps aimed at improving conditions.

That includes raising the minimum wage for industry workers and making it easier for them to form unions.

Factory closures

At least 1,127 people died when the nine-storey Rana Plaza collapsed on 24 April. Authorities have said that the rescue operation is now drawing to a close.

The military ends its search for bodies on Tuesday and will hand the site over to the district administration.

The collapse is the latest in a series of deadly incidents that have focused global attention on safety standards in Bangladesh's export garment industry, which is the second biggest after China's.

Graph showing the growth in the number of people employed in garment factories in Bangladesh

On Monday Bangladesh's textile association said that owners of factories made the decision to shut down after workers went on a rampage.

"Owners decided to close their factories on safety grounds after workers went on a rampage almost every day after the collapse of Rana Plaza," Mohammad Atiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association, said.

One report said as many as 300 factories had closed in the Ashulia industrial area near Dhaka.

The European and US companies that source their clothes from Bangladeshi factories have been under increased pressure to have more oversight of the industry.

Impact questioned

Now, some European retailers have signed on to the legally binding agreement called the Accord on Fire and Building Safety in Bangladesh, which includes regulations on safety inspections and requires retailers to pay for factory repairs.

Two labour groups are behind the pact and the deadline for retailers to sign on is 15 May.

Discount clothing company Primark and UK supermarket chain Tesco have also signed up to the agreement.

Sixty percent of Bangladesh's garment exports go to European retailers.

However, major US firms including Gap Inc, Walmart and Sears have said they will not sign the agreement, throwing its impact into question.

US retailer Gap said it would only sign the accord if changes were made to rules on how disputes were resolved.

"With this single change, this global, historic agreement can move forward with a group of all retailers, not just those based in Europe," said Eva Sage-Gavin, from Gap's global human resources and corporate affairs department, in a statement.

The collapse of the factory was Bangladesh's worst industrial disaster. In its wake the government has been taking steps to try and reassure Western buyers.

On Monday, it altered the country's labour law to allow garment workers to form unions without interference from factory owners.

Earlier, Bangladesh agreed to discuss an increase to the minimum wage in the sector which is currently $38 (£25) a month, still one of the lowest in the world.