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Sainsbury’s quits Bangladesh Accord: M&S and others undecided

Top British retailer Sainsbury’s, has decided not to sign the new Accord while Marks & Spencer, John Lewis and Debenhams are undecided over signing the new factory safety deal in Bangladesh, following a harsh retail environment in the UK. Several other companies may follow suit due to concerns over costs and lack of support from factory owners and the Bangladeshi government.

Following the Rana Plaza building collapse in April, 2013 that killed over 1,100 people mostly garment workers, European brands and retailers came up with the Bangladesh Accord on fire and building safety. The initiative invested over $55 million in safety monitoring, training of health and safety committees and site inspection by 200 trained engineers. Its signatories have also contributed funds for safety measures, including improving structural design and installing fire doors and sprinkler systems.

Over 1,600 factories are covered by the Accord whose renew by due date ends in May. About 60 major international brands using 1,200 Bangladeshi factories – including H&M, Zara’s owner Inditex and Primark – have signed up to a new version of the Accord.

The tough retail environment in the UK was an indication that retailers were trying to limit corporate social responsibility spending. The original Accord cost the largest brands $5,00,000 a year before further commitments to support any work needed in factories from which they source. The new deal will last three years maximum with reviews every six months to assess whether the Bangladeshi government is ready to take over its work.

Sainsbury’s said while it would not be signing up, it remained supportive of progress in Bangladesh. Jenny Holdcroft, assistant general secretary of the international union IndustriALL, assessed that brands need to stay with the accord otherwise all the hard work and money they have invested will quickly be undermined. She said that those brands that did not contribute were letting other more responsible companies ‘carry the can’ for continuing the safety work.