The group of 70 companies includes Swedish retailer H&M, Italian clothing maker Benetton and French retailer Carrefour. Under the companies' agreement, they are required to pay administrative costs for the inspections, training and other programs. And they're also responsible for ensuring that "sufficient funds are available to pay for renovations and other safety improvements."
The details of the legally binding five-year pact come after negotiating with worker rights' groups and other organizations on how the plan should be carried out. The plan, announced in mid-May, initially had about 30 companies signing on. The plan covers anywhere from 800 to about 1,000 of the 5,000 garment factories in Bangladesh.
"''Our mission is clear: to ensure the safety of all workers in the Bangladesh garment industry," said Jyrki Raina, general secretary of IndustriALL Global Union, a Geneva-based labour union involved in the negotiations.
Stores and clothing makers face increasing pressure to step up oversight of Bangladeshi factories following a building collapse in April that killed 1,129 workers there. The tragedy, the deadliest incident in the history of the garment industry, came just months after a fire in another garment factory in Bangladesh in November killed 112 workers.
Only a handful of U.S. companies have committed to the global pact and include PVH Corp., the New York-based parent company of Tommy Hilfiger; and Abercrombie & Fitch of New Albany, Ohio.
Many U.S. merchants say they were averse to signing on to the global pact because they believe it exposed them to unlimited liability. Instead, Wal-Mart, Gap and others are part of a coalition of U.S. merchants and garment makers developing an alternative plan. They're closely working with former U.S. Sens. George Mitchell and Olympia Snowe. The details are expected to be announced Wednesday.
As part of the global plan pushed by IndustriALL and other worker rights groups, if a factory is identified as an immediate threat by either an inspection or worker reports, the factory owner will be told to cease operations pending investigation or repairs. With the involvement of the local unions, factory workers will be informed of the potential danger and their right to refuse to enter a potentially unsafe building. A viable plan with renovations and repairs undertaken to address the hazards will be produced and workers will be paid while the factory remains closed.
The group will develop action plans that focus on factories with immediate risks like inadequate emergency exits and structural flaws that could lead to a collapse.
According to the agreement, funds used to pay for renovations may be generated through negotiated commercial terms, joint investments, direct payment for improvements, government and other donor support or any combination.
According to the Worker Rights Consortium, one of the groups involved in the negotiations, the annual administrative cost per company is up to $500,000 per year. How much it will cost for repairs and renovations won't be known until all of the factories are inspected, the group said. But based on consultation with fire and building safety experts, the group speculated the cost could run $600,000 per factory.
All 70 companies have been asked to send in data about factories they use by July 15. The information includes names, addresses and the physical layout of the facilities. The inspection reports will be made public.
Six executive members of the steering committee have been elected and including officials of IndustriALL Global Union, UNI Global Union and the Bangladesh Council of Trade Unions as well as representatives of companies that have signed on to the pact. They include Inditex, N. Brown Group and PVH Corp. The International Labor Organization has designated a senior representative to serve as chairperson.
The group has also begun to recruit both the chief safety inspector and the executive director.