Dhaka, Bangladesh (BBN)-An international agreement to improve safety in Bangladesh’s clothing factories is facing the threat of legal action as factory owners demand compensation for the cost of closures and repair work.
With some repair programmes expected to take months, factory owners say they cannot shoulder the costs of paying staff while factories are closed, alongside the expense of some major works needed to ensure buildings are safe, reports Gulf Times.
The building overhauls are being carried out in the wake of the collapse of the Rana Plaza complex in Dhaka last year, in which 1,138 people were killed.
The problems come as hundreds of Bangladeshi clothing factories per month are inspected for fire-safety and structural problems under the Accord on Fire Building Safety in Bangladesh, which is backed by over 170 international brands including Primark and Marks Spencer and international trade unions including IndustriALL.
The owner of one Dhaka-based factory, Softex Cotton, has threatened legal action against the Accord after his factory was closed down due to structural problems, prompting a demand for a reported $100mn in compensation.
Another factory owner who declined to be named said that once a factory closed its doors, even for a few months, it would lose orders and close permanently: “There is no such thing as temporary closure,” he said.
The factory owner said that the Accord agreement had “pussy footed” around the issue of who paid for factory closures amid efforts to get as many brands as possible to sign up to a deal in the wake of the Rana Plaza disaster.
He said there was no clear process in place to handle the costs involved.
Jenny Holdcroft, policy director for international union IndustriALL, which has been closely involved in the Accord, said that the agreement ensured that factories would not lose orders during closure because brands had committed to maintain orders with suppliers for two years.
While 12 factories have been identified by the Accord as needing significant work so far, Holdcroft said many of those only needed partial closure in order to reduce stress on the building so production could continue on other floors.
The Accord also legally binds brands to ensure that workers are paid during factory closures. She said the detail on who would make payments had been left open in order to ensure that all those factory owners who could afford to pay for repairs and compensation for workers made the necessary contribution.
“This was always going to be a topic of negotiation. Brands don’t want to commit to paying so that rich factory owners who have just pocketed the profits and not been spending on their factories for years continue to do so. There was obviously going to be disruption, if there was no disruption there would be not change,” she said.
A spokesman for the Accord said negotiations over payments and even legal action would not hold up its work to improve safety in factories.
However, pressure on the Accord to contribute to the payment of displaced workers has ratcheted up after a rival factory safety group backed by US retailers including Walmart and Gap, the Alliance for Bangladesh Worker Safety, set aside $5mn to help pay factory workers for up to two months while work is carried out on the buildings it has identified as needing improvement.
It has so far identified five factories in four buildings where production needed to be suspended.