North American Retailers to Raise Factory Safety in Bangladesh

Following the call for safer labor conditions in an era of globalization, 17 major retail firms from North America have unveiled a plan to improve factory safety standards throughout Bangladesh. Bangladesh, which is the world's second-largest retail exporting nation and sends about 85% of its goods to the European Union and United States, has notoriously suffered from hazardous working conditions in its factories. Labor groups have estimated that it would take $3 billion USD to raise the safety standards of the country's factories to an acceptable level, which prompted firms from the U.S. and Canada to form the Alliance for Bangladesh Worker Safety. The Alliance's goals include donating over $42 million USD over the five years of the plan, and for inspections to be carried out in the estimated 500 factories that the North American retailers use in Bangladesh.

In addition to the $42 million and inspections, the North American plan also proposes increased "shared accountability" in responding to safety hazards. Not only will the companies work closely with the factory owners in resolving safety issues, but the Bangladeshi government and various government aid agencies will also have a role in financing safety improvements. Therefore, since the North American firms are only financially contributing about $1 million USD from each firm per year, the Alliance's plans place most of the burden on factory owners and domestic government agencies to improve their factories for continued business. 

Similarly to the North American Alliance, 70 European retail firms signed the Accord on Fire and Building Safety in Bangladesh with the goals of inspecting factories, developing remediation plans, sharing information regarding the inspections, and safety training for Bangladeshi workers. In spite of the similarities, the European Accord differs sharply from the North American Alliance in that the European plan places the responsibility of safety violations on foreign firms through international legal action, which therefore prompts an increase in safety investment to ensure that all factories have updated safety measures. 

Due to its lack of legally binding terms for guaranteed improvements, many labor rights groups have criticized the North American Alliance. The groups stated that the Alliance is "unwilling to commit to a program under which they actually have to keep the promises they make to workers and accept financial responsibility for ensuring that their factories are made safe." Despite Bangladesh's safety hazards, the country's retail industry has continued to grow at a significant rate, with the Bangladeshi Export Promotion Bureau stating that exports in June rose 16.3% to $2.7 billion USD. Seeing as the Bangladeshi retail industry continues to grow in spite of its worker safety issues, increases in business have also historically included increased pressure for better working conditions, as seen in examples like the industrialization of South Korea and post-war Japan. This will put more pressure on North American firms to redraft the terms of the Alliance for more accountability through increased financial and legal measures, which could threaten the willingness of North American firms to do business in Bangladesh.