Factory safety plan may stall in Bangladesh

Most US firms balk, though Europeans join

Gap Inc. says it is worried about legal liabilities in a factory safety pact for Bangladesh.
Robert Galbraith/Reuters
Gap Inc. says it is worried about legal liabilities in a factory safety pact for Bangladesh.

NEW YORK — Foreign clothing chains on Tuesday agreed to a historic pact to improve factory conditions in Bangladesh, but US retailers were scrambling to come up with their own safety plans.

More than a dozen brands plan to sign a five-year contract that requires they help pay for fire safety and building improvements. Missing were US companies, except for PVH, the New York parent of Calvin Klein and Tommy Hilfiger.

Several North American groups led by the National Retail Federation said they are working on a separate safety plan. They declined to give details, saying they’re still being hashed out.


Meanwhile, Walmart said late Tuesday that it was not in a position to sign the legally binding pact, but announced its own steps that it says meet or exceed the contract. The company will make public the names and inspection information of 279 factories it uses in Bangladesh, starting June 1. It will use an inspection company to provide fire safety training to factory workers. It also is contracting with a call center run by an organization called Labor Voices so factory workers can report safety concerns.

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Retailers are facing pressure to increase their oversight of factory conditions in Bangladesh following a building collapse on April 24 that killed more than 1,110 workers — just months after a fire in another garment factory in Bangladesh in November killed 112.

Labor groups have pushed retailers to sign the plan, a lengthier version of a pact that was proposed about two years ago. Workers’ rights groups have threatened protests against brands that do not sign the agreement by Wednesday.

In addition to requiring retailers to pay for safety upgrades, the plan calls for companies to pay up to $500,000 annually to run the program, to stop doing business with any factory that refuses to make safety upgrades, and to allow workers and their unions to have a voice in factory safety.

Some industry experts said many US firms may hesitate to sign, fearing they’ll open themselves up to legal action, since people and companies in the United States are generally more likely to sue than in Europe.


Gap Inc., which had been close to signing last year, said the pact is ‘‘within reach,’’ but it is concerned about possible legal liabilities.

But for the pact to help, its backers say, it needs more big US companies to join.