​What’s next for the Bangladesh Accord? Q&A

Five years on from one of the most tragic industry accidents to date at Rana Plaza, which saw more than 1100 people lose their lives, and the inspectors working to improve the safety of the textile factory workers might have to leave Bangladesh.

An eviction of the Bangladesh Accord - which was set up by more than 200 apparel companies to improve workplace safety at more than 1,600 factories - could prove harmful for workplace safety, with about 500 manufacturers facing the possibility of losing their business ties with major fashion companies.

While the next court hearing has been set for 21 January, the date has been postponed several times already, leaving the future of the Bangladesh Accord uncertain.

What’s the latest?

In May, a High Court in Bangladesh ordered the Accord to stop its work by 30 November, 2018. The Accord appealed the decision and the Supreme Court issued a stay against the order to leave the country. In the latest turn of events, the Accord and the government now have one month to discuss how to guarantee safety at the factories in Bangladesh until the next court hearing on 21 January. Meanwhile, the Accord is continuing its work.

Why is this happening?

The government of Bangladesh believes that the Accord is no longer needed because no major accidents have happened since 2013. It also claims that the Remediation Coordination Cell - a national regulatory body - is ready to adopt the Bangladesh Accord’s role of keeping textile workers safe. Bangladesh garment factory owners and their lobby have complained that they often didn’t receive financial support for costly factory upgrades requested by the Accord. But if the fixes weren’t made then fashion companies would terminate the business relationship.

How much does it cost to upgrade a factory and who pays?

“Under the Accord, a factory has to spend an estimated average amount of 200,000-300,000 US dollars to upgrade its buildings,” said Joris Oldenziel, Deputy Director for Implementation at the Bangladesh Accord Foundation in Amsterdam. While fashion companies which have signed the Accord are required to negotiate with their suppliers to ensure it’s financially feasible to carry out the fixes, factories tend to have to pay for upgrades on their own, a report published in November suggests.

“None of our respondents reported receiving loans or other forms of help with safety improvements”, the Garment Supply Chain Project found after surveying 152 Bangladeshi garment factory managers and 1500 workers. Financial assistance mostly happens via advance payments, loans, longer-term order commitments or larger order volumes, Oldenziel told FashionUnited. It’s hard for the Accord to provide figures due to the fact that negotiations about financing take place between suppliers and apparel companies.

Why can’t Bangladesh fix the safety issues within its textile industry itself?

The national regulatory body, RCC, isn’t ready, according to the Bangladesh Accord, labor unions and non-government organisations such as the Clean Clothes Campaign. The staffing isn’t sufficient yet to replace the work done by the Accord, and to guarantee the transfer of knowledge, the Accord needs to continue until 2021 as initially agreed with the government of Bangladesh, the groups demand. ”The significant remediation done so far means that the chances of mass fatalities have significantly declined”, said Oldenziel by phone. “But it doesn’t mean it cannot happen again, as long as adequate fire detection and protection systems and safe exits for workers are still lacking in hundreds of factories.”

What will the Accord do if it has to leave the country?

The agreement signed between fashion companies and labour unions to ensure workers’ safety isn’t nullified if the Accord office is closed down in Bangladesh, said Oldenziel. “We would have to seek alternative ways to continue to implement the Accord with the best of our ability from outside Bangladesh.” In the short-term, operations would resume from Amsterdam and the Accord would contract engineering firms to work in Bangladesh, he said. An office near to Bangladesh is being considered as an option for the medium term.

Where would this leave the country’s garment manufacturers?

In the case that the Accord has to leave the country, it may not have enough people in Bangladesh to monitor the upgrades needed at some 500 factories. Without monitoring, safety fixes can’t be confirmed and fashion companies may have to terminate their business with “a large part” of these companies as part of the legally-binding agreement they signed with labor unions under the Accord. This means more than a tenth of Bangladesh’s more than 4000 garment manufacturers are at risk of losing business.

Including subcontractors, more than 7000 companies might by involved in the garment sector and it could cost 1.2 billion US dollars to erase dangerous conditions in Bangladesh, which is the world’s second largest apparel exporter, according to a report by the NYU Stern Center for Business and Human Rights published in April.

How have fashion companies working with Bangladesh textile suppliers reacted?

After the initial five-year term of the Accord ended in May, it was renewed to run until 2021 and still includes 191 mostly European apparel companies from Dutch C&A to Spanish fast fashion retailer Inditex. “The vast majority of the brands are very supportive of the Accord and want it to continue because everybody agrees that it’s far from ideal to implement the Accord from outside Bangladesh”, Oldenziel said.

Textilbundnis, a German initiative including companies such as Hugo Boss and Esprit, sent a letter to Bangladesh’s Prime Minister Sheikh Hasina in August, urging her to allow the Accord to continue its operations until 2021.

The Swedish H&M Group works with 250 Bangladeshi production units currently and is monitoring the situation closely. “Our presence and commitment in our production markets is long-term”, said a spokesperson of Hennes & Mauritz AB by e-mail. The fashion company has been sourcing from Bangladesh for more than 30 years.

Bangladesh exports more than 30 billion US-dollars worth of clothes a year, mostly to the United States and Europe. What could politicians do to ensure the safety of the workers supplying their countries’ consumers?

Although 85 percent of the Bangladesh Accord goals were achieved, it’s still necessary to continue operations, said members of the European Parliament in a letter addressed to the EU Commission. Two Dutch parliamentarians, Agnes Jongerius and Kirsten van den Hul, also mention in an article on oneworld.nl that the European Union could increase pressure on Bangladesh’s government by reviewing the preferential trade status of the country.

Photo: Clean Clothes Campaign; Kristof Vadino via Maquila Solidarity Network