Bangladesh fire and building safety Accord: What retailers need to know

Why are we talking about it?

The deadline for signing the Accord passed yesterday. Twenty-six major retailers have signed up to the code including John Lewis, Topshop-owner Arcadia, Primark, Tesco and New Look.

The Accord has been created following the devastating collapse of the Rana Plaza building in Bangladesh on April 24, which housed five suppliers. The death toll has so far crossed 1,100 people.

Retailers including Primark and Bonmarche and Joe Fresh used suppliers in the building.

What is the code hoping to achieve?

The Accord will improve fire and safety standards in the country to try and ensure a tragedy like the Rana Plaza collapse does not happen again.

By signing the Accord retailers commit to financing and implementing a joint fire and building safety programme. This will include safety inspections, remediation and fire safety training at supplier factories.

The Accord, which has been initiated by the IndustriALL and UNI Global Unions, is built on the National Action Plan on Fire Safety. The signatories will help develop the action plan over the next 45 days.

Who didn’t sign?

Notable exceptions include Asda owner Walmart and US fashion retailer Gap.

Why not?

Walmart has its own set of standards, which it claims go further and will produce faster results. Walmart has committed to inspecting 100% of its 279 supplying factories within the next six months and immediately publish the results online. This cmopares with the new Accord which requires firms to inspect just 65% of the factories which supply them.

Walmart has already begun this process, which features factories supplying George at Asda, and the first results will be released on June 1.

Other retailers are not completely happy about the legalities of the Accord. Gap is said to be concerned about potential lawsuits.

Meanwhile, all signatories to the Accord have to fork out a hefty US$2.5m each regardless of how much production they have in the country.

Arcadia, which signed up to the Accord yesterday, has purchased just £25,000 of goods in the year to date. Yesterday, it said: “In order to show support for the initiative that this Accord is proposing to undertake, we as a group will be signing up.  This will be done on the condition that we understand the final costs to us, which to date has not been made clear.”

In addition retailers are still in the dark as to the precise details of the Accord because an implementation plan is yet to be drawn up.

Arcadia added that it reserves the right to review its participation if the Accord does not achieve its stated aims within an agreed timescale.

What next?

An implementation plan will be drawn up in the next 45 days, which will lay out the exact details of the Accord.

Peter McAllister, director of Ethical Trading Initiative, which drew up the code, said that although companies might not have signed yet, it is not closing the door to new signatories.