Retailers and unions negotiating a legally binding labor protection agreement in Bangladesh due to expire on Monday have reached a tentative agreement to extend it for three months, the unions involved in discussions said, provided the roughly 200 signing retailers agree to the Agree to extension.
The signatories – which include top clothing retailers like Zara owner Inditex (ITX.MC) – have until June 10 to state whether they will agree, said a spokesman for UNI Global Union, one of the unions involved.
According to UNI Global Union, including H&M (HMb.ST), at least 10 have given their consent who have confirmed that they have agreed to the extension.
Inditex did not immediately respond to a request for comment.
The unions said they would pull out of the organization that now runs the agreement – called the RMG Sustainability Council (RSC) – if retailers fail to commit to the legally binding portion of the deal, obliging them to fund the deal’s operations and forbid them to cooperate with factories until they are found safe by the inspectors.
“No factory is safe without a legally binding agreement,” said Babul Akter, president of the Bangladesh Garment and Industrial Workers Federation. “Bangladesh’s apparel industry will return to first place … we will have another Rana Plaza,” said Akter, referring to the deaths of at least 1,100 people in the 2013 Rana Plaza clothing manufacturing center collapse.
However, industry officials from the BGMEA factory owners association, which makes up a third of the RSC board of directors, said the most important thing was to reach an agreement that as many brands as possible would join.
“The industry wants every brand to register,” said Rubana Huq, director of BGMEA. “That is our attitude.”
The 2013 fire and building safety agreement in Bangladesh, signed after the Rana Plaza disaster, created an independent body to inspect factories and required retailers to cut off business relationships with factories that had not carried out repairs. Interest loan or advance payments if required. Companies could be brought to justice in the country of residence if they fail to meet their obligations.
Two retailers – who could not be named in the settlement – have been brought to justice and forced to pay large sums, said Alke Boessiger, deputy general secretary of UNI Global Union.
North American retailers like Walmart (WMT.N), Target (TGT.N), and Macy’s (MN), who refused to sign a contract that risked home litigation, formed a parallel alliance for work safety in Bangladesh, the five Years in which the members called each other to account without judicial involvement.
Sources close to the negotiation said the Brand Association, a legal entity representing retailers in the RSC, wanted to reach an agreement that North American retailers would also sign.
But labor rights groups said this could create a race to the bottom.
“We want the RSC to be the industry initiative, but that doesn’t mean we’re ready to lower our standards,” said Boessiger.
A representative from the Brand Association was not available to comment. The organization said in a statement on Sunday that it was “open to any trademark procurement from Bangladesh that is committed to ensuring the continued high security standards within the framework of membership”.
UK retailer Asos (ASOS.L) and German retailer Tchibo have also made public commitments to sign an extension of the legally binding deal, while others refuse to comment before the negotiations are over.
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