• A group of investors is calling on the 220 original signatories of the Bangladesh Accord for Fire and Building Safety to re-commit to the 2018 Accord.
  • The group, organised by the Interfaith Center on Corporate Responsibility (ICCR), says a "weakened" Accord puts the critical investments already made at risk and potentially encourages Bangladeshi garment factories to return to their former practices.
  • As per 19 January, 56 brands and retailers have signed the 2018 pact.
Organised by the Interfaith Center on Corporate Responsibility (ICCR), the investors urge all signatory companies of the 2013 agreement to sign the 2018 Accord

Organised by the Interfaith Center on Corporate Responsibility (ICCR), the investors urge all signatory companies of the 2013 agreement to sign the 2018 Accord

Global investors are calling on brands to re-commit to the Bangladesh Accord for Fire and Building Safety amid warnings a "weakened" Accord may endanger critical investments made as part of the 2013 agreement and potentially encourage Bangladeshi garment factories to return to their former practices.

The Bangladesh Investor Initiative, organised by the Interfaith Center on Corporate Responsibility (ICCR) which claims its coalition of more than 300 global institutional investors currently represents more than US$400bn in managed assets, is urging all signatory companies of the 2013 agreement to sign the new 2018 Accord to complete the systemic reforms it says are needed to ensure the long-term safety of workers in Bangladesh's apparel sector.

Of the original 220 corporate signatories, only 25% have signed the 2018 Accord.

The original pact was launched following the collapse of the Rana Plaza factory building in Dhaka, which killed more than 1,100 people in 2013. A new 2018 Accord was announced at the OECD Global Forum on Responsible Business Conduct in Paris on 29 June. Signatories so far, which numbered 56 as per 19 January, also include Kmart Australia, Target Australia, C&A, Otto, KiK, Aldi South, Aldi North, Lidl, Tchibo, LC Waikiki, Helly Hansen, Adidas, PVH Corp and N Brown Group. 

The three-year agreement aims to build on the achievements of the first Bangladesh Accord, which is set to expire in May 2018. Signatories say it will continue with its legally binding framework and commitment to transparency, but includes new worker protections and ensures more factories will be inspected and renovated as signatory brands add suppliers.

In addition, while the first Accord covers ready-made garment facilities, the second agreement makes possible the inclusion of suppliers producing home textiles, yarn, cloth and other related products.

"There remains a critical need for the Accord, supported by the active involvement of its original 220 corporate signatories."

Now the ICCR says that while much has been accomplished, more needs to be done. "Only 36% of more than 1,600 factories covered by the Accord have installed adequate fire detection and prevention systems and 50% have yet to complete worker safety trainings designed to build sustainable and credible systems for addressing safety concerns," the organisation says. "There remains a critical need for the Accord, supported by the active involvement of its original 220 corporate signatories."

It adds there is currently no national regulatory body with the capacity to take over the Accord functions, and also notes the Alliance for Worker Safety stated in its fourth annual report last year that the Alliance will sunset in 2018 and partner with local safety organisations in Bangladesh that will monitor factory progress and train workers.

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"Regardless of the remediation progress within a company's own supply chain, the Accord draws its strength and influence from the collective leverage of its 220 signatories," says the ICCR. "By the end of the Accord's initial five-year period, over US$50m will have been spent on inspections, remediation and workplace programmes. A weakened Accord puts these critical investments at risk, potentially encouraging Bangladeshi garment factories to return to their former practices. This risk is heightened by the absence of a national regulatory body with the full capacity to inspect factories, compel remedies and protect workers."

The investors recommend:

  • Accord companies, who have yet to sign the 2018 Accord, do so during the first quarter of 2018.
  • Companies in the Alliance, which is formally ending in 2018, sign on to the Accord and therefore maximise the leverage to complete safety reforms and strengthen the collective action to build the capacity of the Bangladesh government's oversight of worker safety by 2021.
  • All brands and retailers sourcing in the garment sector expand safety inspections to knitting, spinning and weaving; washing, dyeing and printing facilities; embroidery and accessories; home textiles; leather and footwear.
  • All brands, retailers and other stakeholders strengthen the National Tripartite Plan of Action on Fire Safety and Structural Integrity in Bangladesh's garment sector to ensure an integrated approach to promoting fire safety and building integrity and to provide a platform for stakeholders engaged in fire safety initiatives.

"As investors, we encourage all companies sourcing in Bangladesh's garment sector to take responsibility to build on the unprecedented fire and building safety work begun 2013 and finish the task of remediating worker safety issues while mitigating the risk to brands, retailers and investors who are connected to the long-term sustainability of the sector," it adds.