A multinational apparel brand has reached a settlement with two global unions for $2.3 million that to be paid for remediation works at Bangladesh garment factories and for the unions’ worker support fund after the brand was accused by the unions of causing delays in rectifying life-threatening hazards at its supplier factories.
The brand, name of which was not disclosed as per the settlement agreement, arrived at the settlement with IndustriALL Global Union and UNI Global Union, two platforms of global trade union federations representing Bangladeshi textile workers, which lodged complaints against it with the Permanent Court of Arbitration in The Hague of the Netherlands.
The unions argued that the brand did not ask its factories to rectify hazards in a timely manner — leaving thousands of workers in dangerous conditions.
The settlement, reached through a two-year arbitration process under the Bangladesh Accord for Fire and Building Safety, represents one of the largest payments made by a brand to remedy workplace dangers in its supply chain, IndustriALL Global Union and UNI Global Union said in a joint press release on Monday.
European Union fashion brands formed the Accord after the Rana Plaza building collapse in 2013, which killed more than 1,100 people mostly readymade garment workers.
According to the release, the brand, which cannot be named under the terms of the settlement, has agreed to pay $2 million to fix issues at more than 150 garment factories in Bangladesh and the rest $0.3 million will be paid to the two unions that brought the case to fund their joint supply chain worker support fund.
The unions charged that the brand did not ensure that it was financially feasible for its factories to fix ongoing safety issues, as required by the Accord.
‘We are glad that the brand in question is now taking seriously its responsibility for the safety of its supplier factories in Bangladesh. Their financial commitment serves as an example for other brands to follow,’ IndustriALL general secretary Valter Sanches said in the press release.
Valter said, ‘This settlement shows that the Bangladesh Accord works and it is proved that legally-binding mechanisms can hold multinational companies to account.’
At the time of the case’s filing in October 2016, none of the brand’s known supplier factories had completed the required remediation and all of them had at least one high-risk safety hazard due to lack of fire alarm and sprinkler systems, lacking fire doors, and not separating flammable materials from the boiler’s room.
Filing of the case for arbitration spurred several of the brand’s contracted factories towards better progress — one went from a remediation rate of roughly 50 per cent in October 2016 to more than 90 per cent in October 2017.
But other factories supplying the brand continued to lag far behind and serious structural and fire safety issues were left unresolved, the release said.
In December 2017, IndustriALL and UNI settled another arbitration case with a global brand, also administered by the Permanent Court of Arbitration in The Hague.
The combined number of factories covered by both settlements is well over 200.
Christy Hoffman, deputy general secretary of UNI Global Union, said under the Accord, brands must shoulder some of the financial responsibility for fixing the Bangladeshi factories that manufacture their products.
‘The settlement makes real resources available to over 150 factories so they can finally make the necessary repairs that were needed years ago,’ he said.
Hoffman said that they would continue pushing to make sure that all brands contribute their fair share to make workplace safer in Bangladesh.
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