Retailers Key to Bangladesh Worker Safety, Investors Tell Walmart, Gap

A coalition of faith organizations, investors and labor groups—including the AFL-CIO—is urging major U.S. retailers, including Walmart, Gap, Sears and others, to sign on to a binding workplace and fire safety plan to prevent tragedies such as the recent building collapse in Bangladesh that killed more than 1,100 garment workers and two 2012 fires that claimed the lives of more than 400 Bangladeshi clothing workers.

The Interfaith Center on Corporate Responsibility (ICCR) wrote that those disasters are:

A grave indictment of the human rights record of Bangladesh and an illustration of the failure of the global companies that manufacture and source their products there to ensure humane working conditions.

So far 30 companies, mostly European clothing retailers, have signed the Accord on Building and Fire Safety, developed by international and Bangladeshi unions, retailers and other groups. The International Labor Organization (ILO) will help implement it. But major U.S. retailers that import the goods made by very low-wage workers in Bangladesh have not claimed concerns over liability or that they prefer non-binding approaches to worker safety. They have claimed they will develop their own safety plans. But, as the ICCR letter points out:

Acting alone, companies can and do bring about meaningful and positive changes in human rights in the countries where they source and manufacture, and we encourage companies to be part of the solution to ensure better working conditions in Bangladesh. But when faced with intransigence of the type we have historically seen in Bangladesh on worker safety issues, we are convinced that systemic change will only occur when companies take action together. They must use the full force of their commercial power to press for reforms.

In a second letter to large U.S. retailers, 15 investor groups, also including the AFL-CIO and union, state, municipal and other pension funds—with more than $1.35 trillion in assets—urge large U.S. retailers to sign the accord.

Improving worker safety in Bangladesh may require a collaborative effort by both companies and government. As shareholders, however, we specifically must rely on the companies in which we invest to monitor and mitigate the risks in their supply chains. We urge companies with significant purchasing power in Bangladesh—companies such as Walmart and Gap—to act swiftly and effectively.

Many of the companies that import products from Bangladesh claim they are unaware of the safety and working conditions and sometimes even unaware of where their goods are made. They say they count on their suppliers to monitor safety and working conditions. But the investment groups counter:

Proper risk oversight requires first that a company knows its supply chain. We expect companies in our portfolios to ensure the integrity of their supply chains. We are dismayed by public statements from any company that states it is unaware that a factory produces its products....It is not sufficient to place the onus for compliance on suppliers alone while pricing systems actively undercut requisite investment in infrastructure or encourage covert subcontracting.

Read the full letter from the investors and the full letter from the ICCR.