U.S. retailers sign safety plan for Bangladesh


Coalition of 17 includes Wal-Mart

A group of 17 American retailers, including Wal-Mart Stores Inc., Target Corp. and Macy’s Inc., have signed on to a five-year agreement to help improve safety at garment factories in Bangladesh.

The accord is separate from a legally binding plan finalized earlier this week by more than 70 mostly European companies such as H&M. U.S. apparel sellers largely avoided the contract.

Instead, they said Wednesday that their coalition would seek inspections at all member-supported factories in Bangladesh within a year. The group promised transparency for the checkup results.

In the next three months, a set of safety standards will be developed, according to the newly formed alliance. The criteria will be in place by October, it said.

So far, member companies have provided $42 million for the initiative, with an additional $100 million in loans for plant owners to fortify their facilities and workforce.

Companies are to continue contributing financial support in the next five years, based on how much product they source from Bangladesh. Businesses with more than $250 million of product will pay $1 million a year, compared with the $62,500 a year to be shelled out by retailers making $25 million worth of goods or less in the South Asian country.

The impetus for the safety proposals was the April collapse of the eight-story Rana Plaza factory near Dhaka, the capital of Bangladesh. More than 1,100 workers died in the tragedy, making it the deadliest accident in the apparel industry’s history.

The facility manufactured goods for brands such as Wal-Mart, Benetton and J.C. Penney partner Joe Fresh.

The coalition said it worked with former U.S. Sens. George Mitchell and Olympia Snowe on the safety guidelines.


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