Abercrombie & Fitch Signs Bangladesh Safety Agreement While Other American Companies Hold Out
Late on Wednesday, American retailer Abercrombie & Fitch announced it would sign a safety upgrade plan that has been signed by six major European retailers and one other American company, PVH, owner of Calvin Klein, Tommy Hilfiger, and Izod. The agreement, which is legally binding, includes independent factory inspections and requires companies to help underwrite building upgrades and repairs.
Many other American retailers have yet to sign on, including Walmart and Gap. Gap has voiced concerns that the plan could be used to sue it in American courts and Walmart objected to governance and dispute resolution mechanisms. Walmart announced on Wednesday that it would instead use its own voluntary plan that includes inspecting all of its Bangladesh facilities and providing fire safety training to workers. Gap also sent a letter to employees at its headquarters saying that it has hired a fire inspector to examine factories in Bangladesh and will commit $22 million in loans to factories to make upgrades.
Meanwhile, other retailers are already looking to pull operations in Bangladesh and move them to other countries. The New York Times reports that Western executives are looking into sourcing production in Vietnam, Cambodia, and Indonesia. But pulling operations out of Bangladesh could only harm workers further:
Garment manufacturing makes up a fifth of the economy in Bangladesh and four-fifths of its exports, which means that one of the world’s poorest, most densely populated countries is desperately dependent on continued export orders to stave off soaring unemployment and possibly further political unrest. Some executives say that many multinationals will continue buying from Bangladesh, although some may diversify their orders to more countries.
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http://thinkprogress.org/economy/2013/05/16/2020901/abercrombie-fitch-bangladesh/