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Calling for Systemic Reform in Bangladesh

On April 24, the eight-story Rana Plaza factory complex in Bangladesh collapsed, killing 1,129 garment workers and leaving nearly 2,500 more seriously injured. It was the worst apparel factory disaster in history, but unfortunately only one in a series of tragedies that have taken the lives of more than 1,800 Bangladeshi workers over the past eight years. The perpetual quest to lower the costs of production has brought the apparel industry to Bangladesh, where extremely low wages accompany lax safety standards and weak labor unions. This race to the bottom has produced jobs in Bangladesh, but at significant cost to the health and safety of these workers.

A strong investor response was needed. Domini worked with other investors affiliated with the Interfaith Center on Corporate Responsibility (ICCR) on a public statement urging global companies operating in Ban­gladesh to sign a multi-stakeholder factory safety program, the Accord on Fire and Building Safety (the Accord) and to strengthen local trade unions, disclose suppliers and ensure appropriate grievance and remedy mechanisms for workers.

“The horrific loss of life in Bangladesh serves to once again highlight the difficulties in building accountability into global supply chains. As investors, we also bear responsibility to enhance the power of the private sector to effect positive change by engaging companies to ensure that human rights remain at the core of their business models.”

- Excerpt, Investor Statement on Bagladesh (May 13, 2013)

More than 200 institutional investors from around the world representing more than $3 trillion signed our statement, which we plan to use as a foundation for engagement with companies in the retail apparel sector. The first 120 signatories came together in only 48 hours, a strong testament to the seriousness of this issue and the need for systemic reform. The Accord represents a significant change from past practice—its board of directors is chaired by the International Labor Organization (ILO) and split evenly between corporate and labor union representatives. It is also legally binding. More than 80 companies have signed the Accord, but, to date, only a handful of American companies have joined.

Gap is one of the leading companies that have declined to sign the Accord, joining other American companies citing concerns about legal liability. We had several calls with Gap executives, seeking to better understand their concerns and reiterate our strong support for the Accord. We also had a call with PVH to understand why one American company chose to sign the Accord, despite its legally binding nature.