After waiting with bated breath to see if Wal-Mart (NYSE:WMT) would sign the Accord on Fire and Building Safety in Bangladesh, the U.S. retail giant announced Tuesday that it would instead be devising its own plan, as reported by The Wall Street Journal. Though Wal-Mart’s plan has similar strategies, it is free from the Bangladesh agreement’s legally binding provisions, which were the main deterrents to most retailers.
Unlike the five year legally binding pact that was drawn up to prevent future disasters like the recent Bangladesh building collapse, Wal-Mart’s plan involves the employment of an outside auditor who will inspect Bangladesh factories and publish the results. This documentation of fire and safety issues will then tellt Wal-Mart to who and what should be adjusted.
The company will also pay for factory audits, which will be conducted by Bureau Veritas, a European inspection company. It stands by its belief that its independent plan meets, if not surpasses, the group safety plan.
Though Wal-Mart was one of the retailers most highly pressured to sign the accord by its May 15 deadline, it is not the only one to draft its own safety plan. J.C. Penney Co. (NYSE:JCP) and Sears Holdings Corp. (NASDAQ:SHLD) also announced their own proposals, offering few further details. Unfortunately, experts observe that “the proliferation of competing proposals may undermine their effectiveness.”
Wal-Mart has received a lot of criticism for its refusal to sign the pact, especially after it became clear that the company’s products were indeed being produced in the factory that collapsed — a claim that it continued to deny Tuesday. According to The New York Times, Scott Nova, executive director of the Worker Rights Consortium, was skeptical that Wal-Mart’s plan would be effective, saying, “It is a unilateral initiative that’s nonbinding and unenforceable, and it’s unclear how much transparency there will be.”