Investors welcome renewal of Accord

By June 30, 2017News

Four years ago an important breakthrough in worker safety was announced: a global accord between apparel brands and national and global union federations to address deadly health and safety risks in the Bangladesh ready-made garment industry.

The Bangladesh Accord was a novel idea – a legally binding agreement to collaborate on an independent inspection program for hundreds of factories, transparent public reports on progress, and built-in commitments to worker training and union access.

While the substance of the Accord was created much earlier in response to numerous factory fires and other disasters in the country’s industry, the Accord’s launch and rapid uptake followed closely on the deadly Rana Plaza disaster, in which 1,100 workers were killed and thousands more injured after that building collapsed.

The Accord’s four-year history has been a positive response to that disaster, with thousands of structural improvements made at participating factories in Bangladesh. But despite progress, it was scheduled to expire next year.

Thankfully the parties have now agreed to extend the Accord for another three years, after which they intend for the work to be handed over to a national regulatory body supported by the International Labour Organization.

While much of the structure remains the same, the new agreement has expanded the focus on protecting freedom of association and extending the implementation of joint safety committees and safety training to more factories. These are important steps to ensuring that day-to-day safety issues are being identified and addressed in ways that outside inspections and factory auditing cannot.

For investors in global apparel companies, the renewal of the Accord is good news. It provides a platform for effective and collaborative action to address a serious risk for workers and provides investors with assurance that the companies that have joined the Accord are exercising appropriate due diligence in that part of their supply chain.

At present only one Canadian company, Loblaw, has agreed to take part in the new Accord. As responsible investors, we hope that companies that have not yet joined the program will take part in its next iteration.