ONTARIO – An appeals court in Ontario is considering whether Canadian retailer, Loblaw, has a duty of care to suppliers’ workers who were victims of the 2013 Rana Plaza disaster. A US$2bn lawsuit against Loblaw and its auditing firm, Bureau Veritas, was initially dismissed in Ontario Superior Court last year, however, at the fifth anniversary of the tragedy, appeal arguments were heard in Toronto.
Last year, the Superior Court justice found there was no direct cause of action that linked Loblaw to the collapse, and denied the action. It was stated that neither Loblaw nor the auditor it hired owed a duty of care to the Bangladeshi workers.
Rana Plaza, a nine-storey clothing factory, collapsed on April 24, 2013. The previous day, cracks appeared in the structure, yet an investigation into the collapse revealed garment workers were ordered to go to work that morning to finish an order of 24,000 pairs of Joe Fresh jeans. The workers were employed of New Wave, the Rana Plaza-based factory from which Loblaw — owner of the Joe Fresh brand — contracted manufacturing services. It is claimed Joe Fresh orders accounted for half of New Wave’s operations at the time of the accident.
While it would be a surprise if the appeal was successful, this is a fascinating case which could have widespread ramifications for the global apparel industry.
In recent years, we have seen the United Nations’ Guiding Principles on Business and Human Rights, the OECD’s Guidelines for Multinational Enterprises, and the ILO’s fundamental labour standards increasingly being cited in reference to garment supply chains. Moreover, we have also seen the development of the German Partnership for Sustainable Textiles and the Dutch Agreement on Sustainable Garments and Textiles. The premise behind both initiatives is that many businesses in the Netherlands and Germany have outsourced their production to countries outside the European Union where human rights, worker health and safety, environmental protection and animal rights may be at risk.
Brands and retailers from both countries are obliged to avoid these risks under international guidelines.