Delays Attributed to Political Unrest, Industry Disagreements
Mandated inspections of Bangladesh’s garment factories are to begin next week but likely won’t be completed until September, five months later than originally planned.
The Bangladesh Accord, joined by 150 multinational retailers and led mostly by European clothing brands, attributed the delays to serious and prolonged political and labor unrest that has disrupted life in the Bangladeshi capital, Dhaka, and other cities since last year.
Disagreements over the standards to be applied have also flared between the Accord group and Bangladesh’s government and its powerful apparel industry, raising questions about the pact’s likely effectiveness.
“The bar is set very high,” said Rubana Huq, managing director of Mohammadi Group, a large garment exporter, who said factory owners want to improve but need time and money. “Without help, most factories will struggle.”
The accord was formulated after a series of deadly fires in apparel plants and last April’s collapse of a Bangladesh garment-factory complex on the outskirts of Dhaka, which killed more than 1,100 people.
Members of the Bangladesh Accord, which include Hennes & Mauritz AB and Zara parent Inditex SA, pledged to help their Bangladeshi suppliers find financing to make their factories, which pump out cheap fashions for the West, safer.
Bangladesh’s government and companies, however, complain that the accord’s requirements are too strict and that not enough financial help has been forthcoming. The Accord has included them in discussions but don’t need their approval to start inspections.
Alan Roberts, Bangladesh Accord’s operations director, said he expects nearly every one of the 1,700 factories covered by the agreement will need to make changes if they want to keep receiving orders.
“I don’t think there’s a factory out there that is perfect,” said Mr. Roberts. “Hopefully only a small portion will need to be closed down.”
Under the accord, for instance, all factories must have fire sprinkler systems and strong enough water pressure to reach the top floors—rare precautions in Bangladesh’s 5,000 factories.
On Thursday, representatives of the Bangladesh Accord, Alliance for Worker Safety, which is a separate group set up mainly by U.S. retailers, and industry and government representatives met but failed to agree on standards.
It was the third such meeting in a week at which the industry and government experts argued that the standards of the Accord and Alliance are unrealistic and could put many companies out of business.
“We’ve asked the government to step in and fix the standards based on the National Building Code which is the law of the land,” said Reaz Bin Mahmood, vice president of the Bangladesh Garment Manufacturers and Exporters Association. “It is unfair for the retailers to demand European factory standards when they are paying Bangladeshi prices for the clothes they buy,” he said.
“As it stands, most of the factories in Bangladesh will fail and the country may need to build thousands of new factories,” said Maksud Helali, an engineer advising the government.
The kinds of fixes demanded by the Accord are very expensive, and how they will be paid for is still up in the air, Mr. Roberts said.
He said he has had discussions with retailers who fear that joining the Accord implies writing “a blank check” for factory repairs. “What will be a challenge for everybody is who will pay for it and how,” he said.
But, he said, “We have made clear that where we find problems, brands and retailers will stay there to fix them. It may be a compromise on the amount of time it takes to fix them. It’s understood that suppliers would contribute to it.”
Mr. Roberts said with or without agreement from factory owners or the Bangladesh government, Accord inspections will start next week.
The first 200 factories to be inspected for fire, electrical and structural safety are those the Accord has estimated are highest risk.
Source: The Wall Street Journal