May 12, 2014
Remembering Rana Plaza
Posted by Kish Vinayagamoorthy

    Over a year ago, the Rana Plaza factory building collapsed and killed over 1,000 workers in Bangladesh. Full story here.

   In order to prevent a similar tragedy, over 160 brand and retail clothing firms joined with 2 global trade unions, 8 Bangladeshi garment unions and union bodies, and 4 international labor organizations to create the Accord for Fire and Building Safety in Bangladesh. The Accord is a legally binding agreement and has the following key characteristics:

  • Multi-stakeholder Governance: The Steering Committee for the Accord includes representatives from union signatories and company signatories (3 seats each max.). The International Labour Organization (ILO) acts as the independent chair.  In addition, the signatories also appoint an Advising Board that involves a range of actors, such as brands and retailers, suppliers, government institutions, trade unions, and NGOs.  The purpose of the Advisory Board is to make sure that all relevant stakeholders are included in the dialogue and to provide this feedback to the Steering Committee.
  • Dispute resolution: Disputes are first submitted to the Steering Committee, which shall decide the dispute by majority vote.  Upon request by either party, the Committee's decision may be appealed to a final and binding arbitration process.
  • Costs of Remediation: Under the Accord, hundreds of factories will be inspected for structural, fire, and electrical issues, and all necessary safety improvements will be implemented. But remediation costs money and many factory owners already confront slim profit margins. That is why the Accord requires that brand signatories negotiate commercial terms so that it is financially feasible for the factories to comply with remediation requirements.  Brand signatories may also make funds available through alternative arrangements such as joint investment, direct payment for improvements, government and other donor support or any combination of these mechanisms.

It has been almost one year since the Accord was first signed.  In that year, over 250 factories have been inspected for safety risks. Eight of these factories had "critical" structural issues and the inspectors recommended temporary evacuation. When this occurs, the Accord focuses on expediting remediation efforts so that the factories can be re-opened.  During the remediation period, the Accord requires that, first, brand signatories communicate their commitment to the remediation and to continued business with the factory.  Second, brand signatories must also ensure that factory owners maintain the employment relationship with their workers and pay the workers their regular wages for up to six months.

 

 

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