H&M, Inditex Sign Bangladesh Factory Safety Agreement

Adam Jeffery | CNBC

The world's two biggest fashion retailers Inditex and H&M have backed an accord aimed at preventing a repeat of last month's collapse of a Bangladesh factory building that killed more than 1,100 people.

The agreement on fire and building safety, which is being driven by the International Labour Organisation, trade unions and other lobby groups, has been under negotiation since the factory collapsed on April 24.

A series of deadly incidents at factories, including a fire in November that killed 112 people, has focused global attention on safety standards in Bangladesh's booming garment industry, the world's biggest exporter of clothing after China.

Swedish fashion retailer H&M, which is a major purchaser of garments from Bangladesh but did not use any of the suppliers operating in the collapsed factory, said the five-year accord would add to its already strict requirements for suppliers.

"We hope for a broad coalition of signatures in order for the agreement to work effectively on ground," H&M head of sustainability Helena Helmersson said in a statement.

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H&M said the agreement would also need to align with an action plan agreed by the Bangladesh government, industry associations and trade unions to reach all 5,000 factories. It declined to give details of any financial commitment.

Zara owner Inditex, the world's largest clothing retailer, said it also supported the agreement. "The accord has not come out yet, but as you know we have played a very active part in its development," a spokesman said.

IndustriALL Global Union, which has been driving the negotiations to get brands to sign up to the deal, said it hoped for several more brands to join by a May 15 deadline set after talks in Germany last month with major brands and retailers.

A spokesman for IndustriALL said the final draft of the deal would only be published on Wednesday but included strengthening workers' rights, training and brands making a financial commitment relative to the size of their business in Bangladesh.

IndustriALL said last week the accord involves a coordinated system of inspections, training and financial commitments from retailers as well as giving workers the power to refuse dangerous work.

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As salvage workers neared the end of their search for victims on Monday, Bangladesh's cabinet paved the way for parliament to allow garment workers to form trade unions without prior approval from factory owners.

Other big brands involved in the fire and building safety talks include Wal-Mart and Gap Inc, which said last year it would launch its own safety programme.

The IndustriALL spokesman said U.S.-based PVH Corp, whose brands include Calvin Klein, and German retailer Tchibo, which had already signed up to an existing Bangladesh safety program, had also signaled their support.