Factory collapse should spur industry to act responsibly

The factory collapse in Savar, Bangladesh that killed 1,200 people is not the first incident that highlights the abhorrent conditions of garment factory workers in developing countries, but it is by far the worst.

The factory collapse in Savar, Bangladesh that killed 1,200 people is not the first incident that highlights the abhorrent conditions of garment factory workers in developing countries, but it is by far the worst. The shocking loss of life spurred outrage, but this must also be the time and place when an industry says enough is enough.

Much-needed reform was enacted swiftly by the country's cabinet. Workers will likely be able to form trade unions and plans are to raise the minimum wage, but much more still needs to be done.

Three weeks after the collapse, headlines are starting to focus on which retailers did business in that particular factory, but let's not spend a lot of time looking for old invoices in the debris. Wretched conditions like these have existed for decades in many countries. Instead, business leaders should focus on a call to action to a problem that touches every retailer and consumer.

Unfortunately, at the outset US retailers are making some shocking missteps in handling their response, particularly as many European retailers have banded together and signed a Bangladesh safety agreement that requires strict third-party inspections and retailers to pay for factory safety upgrades.

By the end of the third week in May the only non-European companies to sign were PVH, parent company of Calvin Klein and Tommy Hilfiger, Abercrombie & Fitch, and Canada's Loblaw. That's appalling. So much profit has been made employing cheap labor in emerging markets and the time has come to reinvest some of that money into providing workers with decent compensation and conditions. I would have thought business leaders would have stepped up - no stampeded up - to do the responsible thing, especially at a time when the value of corporate reputation is on everyone's lips.

Walmart is opting to work independently, use self-inspections, and stop production at factories where problems exist. Gap is not signing on the dotted line either and suggested amendments that would make violation of the pact unenforceable. About 13 large US retailers declined to sign the agreement.

These companies are abandoning an important opportunity to create a long-term united response that would be a significant force for major change and good for their reputation. What are the rest of the US retailers waiting for? Enough is enough. 

Bernadette Casey is the executive editor of PRWeek. She can be contacted at bernadette.casey@prweek.com.

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