Fast Retailing Co Ltd, the biggest retailer in Asia and the owner of Uniqlo, signed the Europe-led and union-backed safety upgrade plan for Bangladesh’s garment factories.
A spokesman for the company told Reuters that it took this long to join the agreement because it wanted to “thoroughly consider the pact’s conditions.” Its clothes were not manufactured in Rana Plaza, the factory that collapsed in April and killed 1,132 people. It says that it has completed and investigation into its subcontractors’ factories in the country.
The plan has been signed by 70 other mostly European retailers such as H&M; and Inditex, the company that owns Zara, as well as some American companies like Abercrombie & Fitch and the owner of Calvin Klein, Izod, and Tommy Hilfiger. As part of the plan, the retailers will open their Bangladeshi factories to safety inspections, which will be completed within nine months. If they reveal the factories to be unsafe, the companies will underwrite the costs of the upgrade. The companies must commit to the upgrades and repairs flagged by inspectors for two years. Between 1,500 and 2,000 of the country’s 5,000 factories could be covered by the plan.
Yet 17 other retailers, mostly American-based companies, have refused to sign onto the plan. Instead, led by Walmart and Gap, they have proposed their own, less legally binding plan. While their plan commits money to improvements upfront, the companies will not be legally bound to pay for improvements.
The official cause of the collapse was found to be shoddy building materials and illegal construction. Yet even today a majority of the country’s garment factories are also at risk of collapse.