Walmart, others reach Bangladesh accord – is it enough?

A five-year plan spearheaded by Walmart, Gap and other U.S. retailers requiring factories in Bangladesh to be inspected within a year is under fire, according to a Bloomberg report.

The North American retailers have set up a $42 million fund so all factories that fail to measure up to safety codes can make renovations. Although individual retailers can voluntarily pledge capital beyond the $42 million, the pact falls short of the one reached by mostly European retailers. Bloomberg reports that the European retailer’s pact, which includes Hennes & Mauritz and Inditex SA, “obligates companies to ensure their factories have the capital to make necessary repairs.”

“All workers, no matter where they live, have the right to a safe environment. The Bangladesh Worker Safety Initiative is based on a shared commitment among an alliance of brands, retailers and other stakeholders to improve worker safety in Bangladesh,” said Walmart SVP and global chief compliance officer Jay Jorgensen in a statement July 10. “This alliance will move quickly and decisively to create uniform safety standards. Those standards will be the basis for factory inspections and training to be conducted by the alliance. Worker safety is the alliance’s top priority.”

Five years is not quickly enough, according to critics of the North American initiative.

“It’s disappointing that Wal-Mart, Gap and other U.S. retailers have chosen to go their own way with a plan that appears to lack meaningful transparency and accountability,” said New York City Comptroller John C. Liu in an e-mailed statement reported by Bloomberg. “Their plan risks diluting the effectiveness of a stronger, global effort to improve worker safety.” Liu oversees city pension funds that owned 5.1 million Wal-Mart shares as of April 11.

Click here to read the Bloomberg report in its entirety.