Wal-Mart, Gap Meet With Retailers on Safety in Bangladesh

Wal-Mart Stores Inc. (WMT) and Gap Inc. (GPS) are meeting with retailers, industry associations and the Bipartisan Policy Center to develop a plan to improve fire and safety regulation in Bangladesh factories.

The discussions are part of the previously announced Safer Factories Initiative organized by the Bipartisan Policy Center, a nonprofit policy and advocacy think tank, the center said yesterday in a statement. The talks are co-chaired by former U.S. Senate Majority Leader George Mitchell and former U.S. Senator Olympia Snowe.

Wal-Mart and Gap are among U.S. retailers that have faced criticism for not joining at least 24 other garment-sellers in a legally binding agreement to improve safety at Bangladesh factories that has won support from labor-monitoring groups. The Safer Factories Initiative held its first discussion May 29 in New York and said it will release a plan by early July.

“When this formed, we were pleased to see it come together, and we think it could really be a powerful way to move forward,” Debbie Mesloh, a spokeswoman for San Francisco-based Gap, said in a telephone interview today. “This builds upon the work that we’ve already been doing and will really help to be a path forward with other American retailers.”

Photographer: Jeff Holt/Bloomberg

Wal-Mart and other retailers have been discussing an agreement intended to improve labor conditions in Bangladesh since the April 24 collapse of the Rana Plaza factory - the worst industrial incident in the country’s history. Close

Wal-Mart and other retailers have been discussing an agreement intended to improve... Read More

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Photographer: Jeff Holt/Bloomberg

Wal-Mart and other retailers have been discussing an agreement intended to improve labor conditions in Bangladesh since the April 24 collapse of the Rana Plaza factory - the worst industrial incident in the country’s history.

Mesloh declined to say which other retailers are involved in discussions.

Gap rose 1.4 percent to $40.55 at the close in New York while Wal-Mart fell 1 percent to $74.84.

Industry Standard

Five apparel and retail trade associations in the U.S. and Canada announced the Safer Factories Initiative May 15. The nonbinding proposal brings together workers, factory owners, buyers and the Bangladeshi government to develop an industry standard on fire and building safety, Nate Herman, vice president for international trade for the American Apparel and Footwear Association, said earlier this month. It also will look to increase education, improve assessments and bolster training, he said.

Wal-Mart and other retailers have been discussing an agreement intended to improve conditions in Bangladesh since the April 24 collapse of the Rana Plaza factory -- the worst industrial incident in the country’s history. The accident killed at least 1,127 and followed a series of deadly fires that already had prompted activists to push Western retailers to take more responsibility for work conditions in that country.

Wal-Mart Inspections

Wal-Mart has said it will make public safety inspections at all of its suppliers’ authorized factories in Bangladesh. Reviews of the 279 plants will be completed within six months, and the factory names and inspection information will be posted on its website, the company said earlier this month. The world’s largest retailer said the costs of the remediation and safety improvements will be reflected in its costs of goods purchased.

Photographer: Daniel Acker/Bloomberg

Wal-Mart has said it will make public safety inspections at all of its suppliers’ authorized factories in Bangladesh. Close

Wal-Mart has said it will make public safety inspections at all of its suppliers’... Read More

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Photographer: Daniel Acker/Bloomberg

Wal-Mart has said it will make public safety inspections at all of its suppliers’ authorized factories in Bangladesh.

“We’ve taken a number of actions that meet or exceed other factory safety proposals,” Kevin Gardner, a spokesman for the Bentonville, Arkansas-based company, wrote yesterday in an e-mail. “Taking part in the development of this broader safety plan with other brands, retailers and the Bipartisan Policy Center, building upon our previously announced commitments, is part of that work.”

Joann Donnellan, a spokeswoman for Bipartisan Policy Center, didn’t respond to requests for additional comments.

European Agreement

The Safer Factories Initiative comes after companies including Hennes & Mauritz AB (HMB) and Inditex SA (ITX), Europe’s two largest clothing retailers, signed a legally binding accord and pledged at least $60 million over five years to monitor safety in Bangladesh factories. Wal-Mart hasn’t signed the European agreement, and the plan of working on a separate initiative has resulted in criticism from some labor-rights activists.

“This scheme was cooked up primarily by Wal-Mart and Gap, two corporations with a track record of putting workers’ lives at risk in the pursuit of cheap apparel,” Scott Nova, executive director of the Worker Rights Consortium, a Washington-based labor-rights monitoring group, said yesterday in a statement.

Safer Factories Initiative members aren’t working with the unions and advocacy groups involved in the accord that H&M and other European retailers have signed, Herman said.

To contact the reporter on this story: Lindsey Rupp in New York at lrupp2@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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