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Gap close to signing Bangladesh factory safety plan

9:27 AM, May 15, 2013   |    comments
(Photo credit MUNIR UZ ZAMAN/AFP/Getty Images)
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Jayne O'Donnell and Ben Mitchell, USA TODAY

While Gap says it may be close, most U.S.-based retailers are balking at a Bangladesh factory safety plan drafted by labor groups and signed by several European retailers this week.

The disagreement stems from what retailers say are liability issues in the plan that a global federation of unions known as IndustriALL released late Sunday.

MORE: Benetton agrees to sign safety pact

Retailers have been under pressure to agree to mandatory safety improvement plan for Bangladesh plants since the April 24 factory collapse that killed 1,127 workers and a sweater factory fire last week that killed eight.

Gap said Tuesday it is "six sentences" away from signing the fire and building safety plan and if the sentences it offered, which alleviate its liability concerns, are incorporated, spokesman Bill Chandler says Gap could sign.

Other retailers that have agreed to the safety plan, including H&M, Benetton and Zara parent company Inditex, are based in Europe, though some operate U.S. stores. It may have been easier for them, says Chandler, because they "operate in a much different legal landscape."

U.S. and Canadian retail trade associations are working on an alternative plan, but are not expected to reach agreement by a Wednesday deadline pushed by IndustriALL.

Wal-Mart Stores, the second-largest clothing maker in Bangladesh after H&M, said Tuesday that it will do in-depth safety inspections at the 270 Bangladesh factories it works with, complete reviews within six months and make results public.

Wal-Mart said its safety plan meets or exceeds the IndustriALL proposal, and "will get results more quickly." But it says it will continue discussing the labor-backed proposal and would sign if issues can be resolved.

Sears spokesman Howard Riefs said late Tuesday that the company will continue with discussions, but is not ready to sign the union plan. He says the company also is in preliminary talks about the retail trade groups' alternative.

Meanwhile, Sears, which also owns Kmart, "will continue to assess the overall risks in each factory in Bangladesh that produces our merchandise, with added scrutiny towards fire safety and building integrity," Riefs said in an e-mail. "Factories that cannot reach an acceptable level of compliance with the requirements of our Global Compliance program will be terminated."

Sears has terminated more than 100 factories worldwide, Riefs said.

J.C. Penney and Target also produce in Bangladesh. Target declined to comment on the agreement. Penney spokeswoman Daphne Avila says it has not yet made a decision. The Children's Place says it is evaluating the plan.

Italy-based Benetton, British retail chain Marks & Spencer, trendy Spanish retailer Mango and Europe's largest grocer, El Corte Ingles agreed to the plan Tuesday. H&M agreed to sign the agreement Monday. Dutch retailer C&A and British retailers Tesco and Primark also signed on this week.

Marks and Spencer said it has been in Bangladesh for 10 years and works with 60 factories. The company said it will work with labor groups and other brands and organizations to turn the safety agreement into an effective program to "deliver a better working environment across all 5,000 garment factories in Bangladesh."

The five-year safety agreement requires independent inspections with public reports and signers to pay for mandatory safety upgrades. It also requires companies to cut off business with any factory that refuses to make necessary upgrades, and it gives workers and their unions a role in the process, according to the non-profit Worker Rights Consortium.

The new companies this week join two retailers that signed the safety plan last year: PVH, which makes clothes under the Calvin Klein, Tommy Hilfiger and Izod labels, and German retailer Tchibo.

USA TODAY

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