Bangladesh Accord Illustrates Power of Multi-Stakeholder Collaboration to Address Supply Chain Issues

In statement, global investor coalition acknowledges progress made by over 100 brands in concert with trade unions and NGOs to transform worker safety in garment sector through the Accord on Fire and Building Safety.

NEW YORK, NY – MONDAY APRIL 24TH, 2017 – A coalition of global investors representing over U.S. $4.3 trillion is using the April 24th anniversary of the Rana Plaza tragedy to issue a statement highlighting the success of the Bangladesh Accord on Fire and Building Safety which they believe symbolizes what can be accomplished when brands use their collective leverage to resolve supply chain concerns.

In the aftermath of the collapse of Rana Plaza there was an unprecedented response on behalf of global apparel brands that recognized their responsibility to participate in the upgrading of factories in their supply chains to address worker safety. The resulting Accord on Fire and Building Safety (Accord) signed by trade unions, brands and retailers created a five year, legally binding framework for factory inspections to identify and remediate fire, electrical and structural issues.

With one year left in its mandate, the investors believe more needs to be accomplished, but significant progress has been made, proving the effectiveness of the Accord model and fundamentally changing how apparel brands and retailers view their relationship to, and responsibility for, workers in their extended supply chains.

“The Bangladesh garment sector is safer now than 4 years ago through the unprecedented collaboration of more than 100 major brands and retailers,” commented Pat Zerega, Senior Director of Shareholder Advocacy, Mercy Investment Services. “We applaud the progress that has been made and urge the companies and all stakeholders to continue building a sustainable garment sector that protects the lives of workers and respects their dignity.”

“As investors, we have engaged companies, the Accord and the Alliance for Worker Safety over the past four years with one overarching goal:  the systemic transformation of the garment sector to eliminate risk to workers and to companies,” said Lauren Compere, Managing Director, Boston Common Asset Management. “While progress has been made, there is still more to be done.  We urge the Accord to extend their five-year agreement beyond 2018 so that serious structural issues can be remediated and companies have time to implement due diligence to assess their suppliers’ capacity and ensure that proper financing is available to expedite the remediation.”

While the success of the Accord highlights the impact of collective brand action, it also exposes weaknesses in both the will and capacity of government to support workers. The last 4 months have seen a troubling government crackdown on dozens of garment workers and labor leaders who are facing criminal cases in Bangladesh after wage strikes in December 2016. About 20 global brands sourcing from Bangladesh, including C&A, Gap, H&M, Inditex, Next, and Primark, wrote to Prime Minister Sheikh Hasina supporting a wage review and expressing their concerns that union leaders and worker advocates were being targeted. Investors commend these companies for acting collectively and urge the Alliance for Worker Safety, the Accord and individual companies to use their influence with the government to support worker rights and safe workplaces.

Further, investors are deeply concerned about developments in Bangladesh’s leather sector where serious labor rights and environmental abuses are negatively impacting thousands of people.  The leather sector is at a particularly urgent inflection point.  Following a series of Supreme Court orders to stem the longstanding and large-scale environmental degradation, the Bangladesh Department of Environment shut down the country’s primary leather tanning hub in Dhaka’s Hazaribagh district on April 8, 2017. An estimated 30,000 leather workers, including child laborers, now find themselves in limbo as the industry seeks to shift production to a new industrial zone outside the city in Savar.

“There is a pressing need for all stakeholders-including companies and governments-to support alternate opportunities for child tannery workers, to ensure promised job protections, housing, and healthcare facilities for adult workers at the new leather industry hub, to improve health and safety conditions in the new factories  and to accelerate the completion of the Savar central effluent treatment plant to prevent further harm to the environment,” stated David Schilling Senior Program Director for Human Rights at ICCR.  “This is precisely the type of crisis that would benefit from a collaborative initiative based on the Accord model.  We are heartened to see what can be done when corporations take collective action to correct supply chain problems. The lives and livelihoods of workers, their families and communities are at stake.”

 

About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 45th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300 member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $200 billion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability on questions such as climate change, corporate water stewardship, sustainable food production, human trafficking and slavery in global supply chains and increased access to financial and health care services for communities in need. www.iccr.org

Contact:

Susana McDermott, Director of Communications, ICCR

212-870-2938

 

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