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Mon May 13, 2013
Business

Fashion Retailers Agree To Safety Plan After Factory Collapse

Originally published on Tue May 14, 2013 5:42 pm

Transcript

AUDIE CORNISH, HOST:

It's been three weeks since a factory collapsed in Bangladesh's garment sector, killing more than 1,000 people. Today, several major retailers that buy clothing made in the country signed onto an ambitious safety plan meant to prevent future tragedies. The agreement is being applauded by worker advocates around the world.

To tell us what's in it, we're joined by NPR's Jim Zarroli. And Jim, give us the details. What does the agreement say, and what does it actually commit retailers to do?

JIM ZARROLI, BYLINE: Well, this is the kind of agreement that could really make a difference in Bangladesh, if enough companies stick to it. Basically, the retailers will have to underwrite some very rigorous fire and safety inspections in the factories where they, you know, manufacture their clothes. The inspectors will be looking at things like whether there's a permit for any additions that have been made on buildings. The owner of Rana Plaza, which is the building that collapsed on April 24th, had added several floors to the buildings even though he didn't have any building permit at all.

CORNISH: So under this agreement, what will happen, say, if inspectors go into a factory and find a major safety violation?

ZARROLI: Well, the violation will have to be addressed. And the companies will have to see to it that the factory owner has the wherewithal to correct it. Now, that doesn't necessarily mean the retailer will have to pay for the repairs. But it will have to at least, you know, maybe help arrange for financing somehow, if the owner can't get it.

The really important thing here is that the company will be agreeing to stay with a factory owner and not go away. One of the problems in Bangladesh is that, you know, the factory owner might discover some safety problem - like a crack in the building - but he's afraid to stop and fix it, you know, because he has 10,000 shirts to get out by next week. And the retailer - if he takes too much time - will get mad and take his business elsewhere. Well, as part of this agreement, the retailers are promising to stay with the factory as long as it takes to correct the problem.

CORNISH: So how many retailers have actually signed on to this agreement, and how much of the garment industry in Bangladesh do they represent?

ZARROLI: Well, before today, the agreement was signed by PVH, which is the parent company of Tommy Hilfiger and IZOD and Calvin Klein; also, a German retailer called Tchibo. Now, today, you have more coming on board. They are the British companies Primark and Tesco, and the Dutch company C&A.

But then you have two really big and important players in retail that have signed on. One is H&M, the giant Swedish company, which is the largest manufacturer of clothing in Bangladesh. And then the other is Inditex, which owns the Zara chain. And activists say it's really important that these last two have signed on because they are leaders in the field.

I mean, this is a business in which there's enormous pressure to churn out clothing very fast. And if these, you know, these mega chains agree to these terms - which could end up slowing down production, in some cases - it might sort of, you know, ease the time pressure on all the other retailers.

CORNISH: Now, Jim, most of the retailers you mentioned are European. And I've got to ask, any American companies sign on to this?

ZARROLI: Mostly, they haven't signed on yet. I mean, the Gap, for instance, has been the subject of an online petition calling on it to make its factories safer. And it has basically said, you know, we have our own safety inspections in the factories where we manufacture; we've lent out money for repairs; we don't need to sign this agreement. Wal-Mart has said something similar. But I think activists are still hoping that they can, you know, get retailers like these, and J.C. Penney, to come on board anyway.

CORNISH: That's NPR's Jim Zarroli. Jim, thank you.

ZARROLI: You're welcome.

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