Outrage over collapse makes global retailers think of safety

H&M Group, with $22 billion sales last year, makes a token offer, but not the Wal-Mart

For a global retailer, it was the worst kind of publicity. Two weeks after the Rana Plaza building in Bangladesh collapsed in one of the worst industrial disasters in history, a brash human-rights ad went viral. It paired a smiling photo of the chief executive of H&M, the Swedish retailer that is world’s largest buyer of clothes from Bangladesh, with a picture of an anguished woman at the Rana Plaza rubble.The headline read: “Enough fashion victims?”

It did not matter that no clothes produced by H&M had been found among the twisted metal and broken concrete as the death toll rose beyond 1,000. The refusal of a major Swedish newspaper to print the ad simply added to the notoriety online.

“They felt it was too tough,” Alex Wilks, the campaign director of Avaaz, the global advocacy group that created the ad, said of H&M. “But our feeling was this is a really tough topic. Lots of people lost their lives, so it’s worth escalating the discussions.”

In interviews last week, executives of the H&M Group, which operates six chains owned by H&M Hennes & Mauritz, said that the Avaaz ad had no influence on its thinking that led to its signing an agreement that for the first time would legally bind Western retailers to invest in improving worker safety in Bangladesh and other low-cost countries. The company, which sold $22 billion in clothes and accessories last year, had already been making efforts to get other retailers to join it in improving the safety of factories used by its suppliers, the executives said.
But it was clear that after the April 24 Rana Plaza disaster, pressure was mounting on H&M – known as a purveyor of ‘cheap chic’ and a leader in the so-called fast-fashion business, which relies on rapid turnarounds from order to delivery – to make good on past promises to help improve labour conditions in Bangladesh.
H&M’s Facebook page, adorned with photos of Beyonce in bikinis made in Bangladesh and other low-wage countries, was becoming littered with customer complaints. Avaaz had circulated an online petition that gathered more than 900,000 signatures, calling for H&M to sign an agreement to help pay to meet fire safety standards and reduce workplace hazards in its Bangladesh factories.
Influential retail unions, which had long pushed H&M and other companies to step up their safety investments, also turned up the heat through phone calls and Skype video chats with H&M officials, including Helena Helmersson and Anna Gedda, who head up the company’s programmes to improve the labour conditions and minimise the environmental impact of clothing production. At the same time, H&M was trying to persuade some of the other big clothing retailers, including its main rivals, to step forward in unison on the issue.

Finally, last Monday, H&M decided to make the leap on its own. “We were devastated by the incident in Bangladesh,” Gedda said last week in an interview in the company’s sleek Stockholm headquarters, a half-block away from three mammoth H&M stores that dominate the downtown streetscape. “We really have a genuine interest in making sure this leads to improvements on the ground,” she said.

UNI Global Union, a federation of retail and service workers, was a driving force behind the agreement. “You can imagine the might in front of us, the sheer scale of business and sales volumes they represent,” said Philip J Jennings, general secretary of UNI Global. “But we did not relent.”

H&M’s decision broke the dam. Following its lead, other major European retailers, including Carrefour, Marks & Spencer and Inditex, parent of the huge Zara brand, said last week they would sign the accord, setting the stage for an industrywide collaboration to improve factory safety. The Bangladeshi government also vowed to upgrade safety standards and revise labour laws to allow unions to form, after a multitude of earlier pledges went largely unfilled.

Overall cost

All the parties have 45 days to work out the details of the programme, and no one has yet estimated the overall cost. There will be limits: for the biggest companies, like H&M, the annual contribution for the first five years will be capped at 500,000 euros ($640,000). Smaller companies would pay less.

Despite the broad agreement, the American retail giants Wal-Mart Stores and Gap have declined to endorse the pact, citing legal concerns. Both say they will continue pursuing their own worker safety programmes.

For many activists, the question is why H&M, with its outsize influence in the apparel industry, did not take that step sooner – especially after a deadly fire in 2010 killed 21 people at the Garib & Garib sweater factory in Bangladesh, for which H&M was a major customer.

“This was exactly the right thing to do three years ago – but they didn’t do it,” said Ineke Zeldenrust, international coordinator for the Clean Clothes Campaign, a group opposing sweatshops, based in Amsterdam. Moving sooner, she said, “could have helped avoid these deaths.”

Even after the Rana Plaza disaster, H&M required persuading, said Jyrki Raina, the general secretary for Industri ALL Global Union, a federation of 50 million workers from 140 countries that also negotiated the binding accord with H&M and other retailers. “Unless they were really pushed,” he said, “we would not be where we are today.” Gedda insists that H&M, which has taken great pains over the years to burnish its image as socially responsible, “had already been working toward this for a long time.”

“Consumers and other groups were not the tipping point,” she said. “The tipping point was that we reached an accord that we felt was really going to produce change.”
The failure of the patchwork approach in an industry driven by relentless pressure to cut costs and turn out an ever-greater volume of affordable clothing became evident as more people died in factory disasters. In November, at least 112 workers, some producing garments to be sold by Wal-Mart, perished in a blaze at the Tazreen Fashions factory outside Dhaka, the Bangladeshi capital. Many were unable to escape because of locked windows and doors.

All the while, global outrage was growing. Unions circulated a letter calling on the brands to commit to a legally binding safety agreement by May 15. Knowing most companies might balk, they set their sights on H&M and its outsize influence in the retail sector. Get H&M on board, the thinking went, and others would follow. So the negotiations went into top gear with H&M officials, including Gedda and her boss, Helmersson.

“They didn’t much like it, because they now saw a legally binding document,” said Raina, who said he had a heated argument on the telephone about the matter with Helmersson before H&M accepted the agreement.