Is Wal-Mart Finally Dealing With Factory Safety?

Wal-Mart Stores Inc. (NYSE:WMT) is meeting with retailers, industry associations, and the Bipartisan Policy center to begin working on its own independent safety plan to improve fire and safety regulation in Bangladesh factories. The retail giant will team with Gap Inc. and other firms and industry trade groups over the next month to develop a plan and a timetable for factory reform. Wal-Mart and Gap are working together on the Safer Factories Initiative, organized by the Bipartisan Policy, after both companies refused to sign the Accord on Fire and Building Safety, an agreement that 40 other retailers agreed to sign on May 15.

The collapse of the Rana Plaza building on April 24 that killed more than 1,100 workers has prompted the renewed vigor for factory reform in Bangladesh. While Wal-Mart maintains that it didn’t have workers employed in the building, speculation has been made otherwise. The company drew significant criticism when it refused to agree to the safety pact signed by Hennes & Mauritz AB, Inditex SA, and many other European retailers, and instead decided to propose its own, non-binding agreement. Bloomberg quotes Scott Nova, executive director of the Worker Rights Consortium, saying of the Safer Factories Initiative, “This scheme was cooked up primarily by Wal-Mart and Gap, two corporations with a track record of putting workers’ lives at risk in the pursuit of cheap apparel.”

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Instead of signing the Accord on Fire and Building Safety that had a May 15 deadline, five apparel and retail trade associations in the U.S. and Canada announced their own scheme, the Safer Factories Initiative, which is different than the former in that it is not a legally binding pact  but still functions to bring together workers, factory owners, buyers and the Bangaldeshi government to develop an industry standard on fire and safety.

The plan is intended to be released by early July, and former U.S. Senators George Mitchell and Olympia Snowe are serving as “independent facilitators” as the retailers develop the plan. Talks will be held in New York and Washington.

Wal-Mart plans to make public safety inspections at all of its suppliers’ factories in Bangladesh, and will publish the reviews of the 279 supplier plants with the factory names and inspection information on its website.

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