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H&M Agrees To Factory Safety Upgrade Plan In Bangladesh

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"H&M Agrees To Factory Safety Upgrade Plan In Bangladesh"

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After the death toll from the factory collapse in Bangladesh soared past 1,100, H&M announced today that it has signed a fire and building safety agreement in the country, Reuters reports. The agreement was initiated by IndustryALL and UNI Global Union. The company said in a statement that it hopes for “a broad coalition of signatures in order for the agreement to work effectively on the ground.” The company didn’t use any of the suppliers that were operating out of the collapsed factory.

In the wake of the tragedy, the country has also announced that it plans to raise the minimum wage for garment workers, the Associated Press reports:

A new minimum wage board will issue recommendations for pay raises within three months, Textiles Minister Abdul Latif Siddiky said Sunday. The Cabinet will then decide whether to accept those proposals.

The wage board will include representatives of factory owners, workers and the government, he said.

The garment industry’s minimum wage was last raised in 2010 by 80 percent following protests from workers, rising to 3,000 takas, or $38, a month.

Working conditions in the country have long been dismal thanks to the corruption of government officials, a failure to commit to higher standards from companies in the industry, and a glut of workers desperate to work. After a fire that killed 112 workers in November, major retailers refused to implement a union-proposed safety plan, citing costs. That may now change following the leadership of H&M.

American demand for cheap clothing has also fueled the garment industry boom in Bangladesh without ensuring better working conditions. As the Wall Street Journal reports, “Americans last year devoted just 3% of their annual spending to clothing and footwear, compared with around 7% in 1970 and about 13% in 1945, according to Commerce Department data.” Spending has decreased in part because clothing prices have fallen over the last two decades after rising from the 1950s to the 1970s. Prices for clothing have risen just 10 percent since 1889, while food prices, in contrast, have gone up more than 80 percent.

But the cost of safety may not even be noticeable to many consumers. The price tag for safety upgrades in the country’s factories, if passed on entirely to the consumer, could cost as little as 10 cents per garment. Companies may also be able to absorb a minimum wage increase as they did when cotton prices rose in 2011.

Update

The New York Times reports that H&M is the largest purchaser of garments in Bangladesh, putting even more heft behind its decision. The agreement it has signed “calls for independent, rigorous factory safety inspections with public reports; for mandatory repairs and renovations – with Western retailers underwriting those repairs; and for retailers to stop doing business with any factory that refuses to make necessary safety improvements.”

Update

Inditex, the Spanish apparel brand that owns Zara, has signed onto the agreement. The country also announced today that it would allow its garment workers to form unions without first getting permission from factory owners.

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