Retailers are taking a more proactive role in monitoring the safety initiatives at factories in Bangladesh.  The factory collapse in April that killed more than 1,100 workers has sparked a sense of urgency among retailers. Retailers like H&M, Zara, and Primark (a British retailer) are working to implement an industry-wide safety pact that encourages retailers to involve themselves more with factory safety measures and adapt how they do business in Bangladesh.

Before the pact is to be implemented, many retailers are taking matters into their own hands by hiring specialists to conduct building safety checks.   For example, in the beginning of summer, Tesco and Primark who both use a factory in Savar, found that the factory did not have enough steel to support its weight.  Based on this finding, Tesco and Primark began lobbying with other retailers, who produce in this same factory, and wrote to the factory owner and demanded that he close the site until more inspections and repairs are done.  These retailers also insisted that the factory continue to pay wages to factory employees throughout the closure.

Throughout the summer, retailers participating in the safety pact will work together to comprise a master list of factories to coordinate safety efforts.  According to some members of this pact, this list could cover almost 40% of the factories in Bangladesh.  This safety pact will demand that each factory on the list be inspected by April, 2014.

Since May, seventy retailers (mostly European) have signed the safety pact which is legally binding.  This safety pact makes retailers responsible for helping finance repairs at factory sites that do not meet safety standards.   In the U.S., retailers like Walmart and Gap are working together to create a competing program that would establish a $50 million safety fund.  However, this plan has created conflict with the other safety pact as many European retailers are worried that they could bankroll the repairs and benefit the Americans who aren’t participating.

Discussion Questions:

Why are retailers becoming more stringent about monitoring safety in Bangladesh factories?

What approach are retailers using to improve safety in supplier locations across Bangladesh? 

How does this differ from the traditional retailer relationship?