H&M Signs Bangladesh’s Factory Safety Agreement

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With the death toll of the building collapse in Dhaka on April 24th now over 1,100 and rescue efforts coming to an end, a spate of improvements to the industry are coming to the foreground. The Bangladesh government has just announced that it will once again raise the minimum wage for garment workers. After a series of protests in 2010, the government raised the minimum wage 80 percent to the current $38 a month. The extent of the upcoming hike in wages is not known.


“The minimum wage is so low in Bangladesh, it could be tripled or quadrupled, and the workers would still not be making nearly as much as workers in China make,” said Liana Foxvog, director of Organizing and Communications at the International Labor Rights Forum (ILRF). Garment factory workers in China make the equivalent of U.S. $285 per month according to the ILRF.

According to the AP, in addition to the wage raise, the Bangladesh government has added an amendment to the 2006 Labor Act that would allow workers to unionize without first receiving government approval.

Thirdly, according to a statement today from Swedish fast-fashion retailer H&M, the company intends to sign the Accord on Fire and Building Safety in Bangladesh. H&M is the largest buyer of Bangladeshi garments ahead of even Wal-Mart Stores, Inc. (NYSE:WMT) who has not yet signed the accord but has until Wednesday to do so. Other signatories on the agreement include Inditex, which owns fashion retailer Zara, among others, and Prestige Brands Holdings, Inc. (NYSE:PBH), which owns Tommy Hilfiger and Calvin Klein.

From the Wall Street Journal’s coverage on the accord today…..

“Fire and building safety are extremely important issues for us and we put a lot of effort and resources within this area,” Helena Helmersson, head of H&M’s sustainability efforts, said in a release. “We hope for a broad coalition of signatures in order for the agreement to work effectively on the ground.”

‘‘The parties will be committed to the goal of a safe and sustainable Bangladeshi Ready Made Garment industry in which no worker needs to fear fires, building collapses or other accidents that could be prevented with reasonable health and safety measures,’’ continued the press release. ‘‘H&M appreciates ILO (the U.N. International Labor Organization) playing a vital part as coordinator.’’

Ms. Foxvog welcomed the measures while adding, “We’re not worried about increasing minimum wage and negatively impacting workers or losing jobs,” she said. “There’s a reason [Western companies] are in Bangladesh; it’s because wages are so low.”


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