Investors Unhappy with North American Plan by Walmart, GAP and others on Bangladesh
July 10th, 2013
North American Bangladesh Worker Safety Initiative Insufficient in Curbing Supply Chain Risk, Say Investors.
Legal accountability and full multi-stakeholder participation, including trade union role in governance structure, cited as critical elements lacking in plan versus Bangladesh Accord on Fire and Building Safety.
Upon initial review, members of the Interfaith Center on Corporate Responsibility (ICCR) based in New York, and long-term shareholders in apparel brands and retailers found the new initiative put forward this morning by the Alliance for Bangladesh Worker Safety lacking in sufficient worker protections and accountability mechanisms. ICCR members, including Boston Common Asset Management, Calvert Investments, Domini Social Investments LLC, the Missionary Oblates of Mary Immaculate and Trillium Asset Management, LLC, who have been engaging major apparel brands and retailers on worker rights and supply chain risk for over 15 years, view the new plan as a weaker alternative to the pre-existing Bangladesh Accord on Fire and Building Safety (the Accord).
In May, ICCR convened a coalition of global investors, now comprising over 200 institutions and $3 trillion in assets, to affirm their support for the Accord, an international, multi-stakeholder agreement that has been signed by over 70 European, American and Australian companies. Details of the Accord were announced earlier this week.
This new initiative, the Bangladesh Worker Safety Initiative (the Initiative) was developed by a group of about 20 North American companies as an alternative to the Accord. While the investors applaud the members of the North American Alliance for responding to the Rana Plaza disaster with a formal plan of action, they are disappointed that these companies chose not to sign the Accord, which does include other North American companies, and represents a meaningful path forward for Bangladeshi garment workers through a multi-stakeholder process.
While the investors acknowledge that the Initiative includes a number of key elements raised by investor supporters of the Accord, they remain concerned to see a lack of worker involvement in the development and governance of the Initiative.
While the investor group plans to release a more thorough comparison of the details of each plan, an initial analysis suggests that the Accord still presents the best path towards comprehensive apparel sector reform in that it:
• Is legally and financially binding for companies versus the Initiative’s voluntary approach;
• Has a multi-stakeholder governance structure with equal representation for trade unions and corporations;
• Calls for full disclosure of suppliers, inspection results and remediation plans; and,
• Is a unified approach with participation from a number of global companies, while the Initiative is a parallel agreement driven by companies based in North America.
ICCR members regard the implementation of these elements as crucial to meaningful reform of the Bangladesh garment industry and the direct involvement of workers through their union representatives as key to ensuring their safety. The Accord provides protections for both workers in Bangladesh factories and for the companies that source their products there. For that reason ICCR continues to press for broad adoption of the Accord.
The global investor coalition is currently developing strategies for more formal and collective engagement of the companies they hold on these and other supply chain issues. A more thorough investor analysis of the alternative plans will be released Friday, July 19.
For more information, please contact:
Director of Communications, ICCR
About the Interfaith Center on Corporate Responsibility (ICCR):
Currently celebrating its 42nd year, ICCR is the pioneer coalition of active shareholders who view the management of their investments as a catalyst for change. Its 300 member organizations with over $100 billion in AUM have an enduring record of corporate engagement that has demonstrated influence on policies promoting justice and sustainability in the world.