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H&M (Hennes & Mauritz), a major Swedish "fast fashion" retailer, led 30 international companies this week to commit to a new $3 billion fund to improve the safety of garment factories in Bangladesh. Watchdog organizations say the companies acted only because of external pressure by activists and workers.
The announcement came weeks after Rana Plaza, a building that housed five garment factories, collapsed in Bangladesh last month leaving over 1,100 dead. While H&M was not among the many international buyers that were found to have contracts with the factories, the disaster sparked an activist campaign that put an enormous amount of pressure on the company which is the second biggest garment retailer in the world and the biggest buyer of clothes from Bangladesh.
Changes in labor and safety practices generally occur "not for philanthropic reasons but because protests were starting to disturb the supply chain" Nayla Ajaltouni, coordinator of the French branch of Clean Clothes Campaign told Agence France Press after riots in Bangladesh in 2010 led to an increase in the minimum wage there. Two years later the story is still the same.
Responding to Disaster
In the days following the Rana Plaza collapse, even as emergency workers dug bodies out of the rubble and families of missing workers fought police in heated street demonstrations, the Walt Disney company, which sources production of toys and clothes from low wage countries around the world, announced it was planning to leave Bangladesh by March 2014.
But H&M said it had no plans to move.
Hanging in the balance are the jobs of over four million workers in Bangladesh who depend on the $20 billion garment industry for their living. The company had the tacit support of many labor organizers who want companies that source from Bangladesh to become more responsible.
"We want buyers to stay and use their power to ensure factories treat workers decently," says Kalpona Akter, an organizer with the Bangladesh Center for Worker Solidarity.
H&M's decision to stay is not entirely altruistic: after all Bangladesh has the world's lowest minimum wage - $38 a month. Safety is a major concern: Clean Clothes Campaign estimates that more than 500 garment workers died on the job between 2006 and 2012.
One reason, say union organizers, is that corrupt government officials tended to look the other way during safety inspections, especially since many senior politicians own garment factories themselves.
To address these issues, Bangladeshi and international unions came up with a proposal titled the "Accord on Fire and Building Safety" that they brought to global retailers, suppliers, NGOs, unionists and government officials at a meeting in Dhaka during April 2011. Intended to be a legally enforceable agreement between retailers, unions and suppliers, it promised a total of $3 billion to fund an independent monitoring body that would oversee all of Bangladesh's 5,000 factories. If a factory did not meet certain standards, it could be shut down.
Two years ago, the plan was wildly unpopular. When the unions pushed it, Walmart's representative shot it down. "It is not financially feasible for the brands to make such investments," Walmart's spokesperson said, according to the meeting minutes.
H&M, the Gap and other retailers also attended the meeting. All of the big brands and factories all walked away without signing the agreement, said Amirul Haque Amin, president of the National Garment Workers Federation in Bangladesh.
A Change of Heart
After the Rana Plaza collapse, the unions' stalemated safety plan suddenly gained traction as public outcry over the deaths mounted. Avaaz, a progressive global campaign group, collected almost one million signatures to pressure H&M and the Gap to sign the agreement.