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AMSTERDAM – A multi-national apparel brand has agreed to pay US$2m to fix alleged life-threatening workplace hazards in its Bangladesh supply chain. The brand will pay the money to help fix more than 150 garment factories following an action by the Bangladesh Accord for Fire and Building Safety, following a similar case last month.

IndustriALL Global Union and UNI Global Union brought the action against the brand – which cannot be named for legal reasons – after factories in its supply chain fell drastically behind in remediation work due to a lack of finance. Under the terms of the Accord, brands should, “shoulder some of the financial responsibility for fixing the Bangladeshi factories,” according to the unions.

The unions brought the case to the Permanent Court of Arbitration, an intergovernmental body located in the Netherlands, arguing that the brand did not require its factories to remedy hazards in a “timely manner.” The unions also claim the brand did not “ensure that it was financially feasible for its factories to fix ongoing safety issues, as required by the Accord,” although it is not entirely clear how much financial liability brands have for helping to remedy defective factories under the terms of the Accord.

At the time of the case’s filing in October 2016, none of the brand’s known supplier factories had completed the required remediations, and all of them had at least one high risk safety hazard which had not been fixed. These included factories lacking fire alarm and sprinkler systems, lacking fire doors, and not separating flammable materials from the factories’ boilers. All necessary safety improvements need to be completed by the Accord’s expiration in May 2018.

IndustriALL’s general secretary, Valter Sanches, said: “This settlement shows that the Bangladesh Accord works. It is proof that legally-binding mechanisms can hold multinational companies to account. We are glad that the brand in question is now taking seriously its responsibility for the safety of its supplier factories in Bangladesh. Their financial commitment serves as an example for other brands to follow.”

Christy Hoffman, UNI Global Union’s deputy general secretary, added: “Under the Accord, brands must shoulder some of the financial responsibility for fixing the Bangladeshi factories that manufacture their products, and this agreement shows that we are actively enforcing these Accord commitments.

“The settlement makes real resources available to over 150 factories so they can finally make the necessary repairs that were needed years ago. We will continue pushing to make sure that all brands contribute their fair share to make work safer in Bangladesh.”

In December 2017, IndustriALL and UNI settled another arbitration case with a global brand, also administered by the Permanent Court of Arbitration at The Hague.


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