Sunday, June 09, 2013

The Gap in Bangladesh's garment industry

Bangladesh's garment industry is on fire. But is it a blaze that lifts women from poverty or the inferno that leaves in its wake the motherless child? The truth is, it is both. And now pressure is mounting on retail companies to rein in rampant safety problems in the country's 6500 factories. This has wrought the Accord on Fire and Building Safety in Bangladesh, an agreement signed by 24 retailers meant to:
"establish an independent inspectorate to oversee all factories in Bangladesh, with powers to shut down unsafe facilities as part of a legally binding contract signed by suppliers, customers and unions."
Moreover it would establish a shared financing mechanism for safety problems, designed to lower the pressure on factory owners to hide problems fearing that their partners might walk away if they knew.

The agreement was first drafted in the aftermath of the 2012 fire in the Tazreen Fashions factory. At the time, Wal-Mart, The Gap and H&M (three of the largest garment retailers in the world) refused to sign. Then the pressure reached a breaking point after the deadliest garment-accident in history at Rana Plaza. After petitions and other consumer pressure, European holdouts like H&M and Primark signed on. The Gap, which says it has ties with 78 factories, abandoned negotiations after failing to water down the legally binding nature of the agreement.

On its website, The Gap maintains that it is "one of the strongest leaders in the area of Corporate Social Responsibility". Glenn Murphy, the CEO, said they are ready to sign with "very minor accommodations".  The Gap believes that the penalty for violations should be public expulsion rather than legal action.

Many believe The Gap is the linchpin to the American retail industry, given its sheer size and greater sensitivity than companies like Wal-Mart to negative branding. Currently only two American and one Canadian company have signed the agreement as it is dominated by European companies. The Gap and Wal-Mart are now working on their own agreement, The Safer Factories Initiative, which they are touting as more appropriate for North American retailers. But it is likely to be non-binding and reversible.

The stalling and dissembling will not do. American consumers should put the heat on The Gap and its brands, which include Banana Republic and Old Navy, to do more than just talk about social responsibility. Worker safety should be pre-competitive and the industry is in need of greater transparency and accountability.  Women like Reshma, who was pulled from the wreckage after 17 days, should not have to accept mortal risk in exchange for opportunity.