$44bn Canadian investor group to push apparel companies on Bangladesh standard, despite resistance

Just one Canadian clothing company has so far signed, investors cite reputation risk.

Canadian investors running more than C$44bn (€32.2bn) in assets, including broad representation from the country’s pension funds, say they will press local apparel companies to sign the International Labour Organisation- (ILO) backed Accord on Fire and Building Safety in Bangladesh, despite resistance from the sector. The call was supported by a number of Canada’s large labour funds including the Ontario Public Services Employees Union (OPSEU), Bâtirente, the union fund for the building trade in Quebec, and the British Columbia General Employees Union (BCGEU) Pension Plan. It follows a similar appeal by US SRI and faith investors last month. The Canadian investors’ statement says they want to see effective action from clothing companies to ensure respect for the workers human rights in the supply chains of the companies in which they invest, including health and safety, freedom of association and a living wage. Bangladesh is the second largest source of apparel imports into Canada, after China, and imports have almost doubled in the last five years.The investors said that alongside the human tragedy of over a thousand lives lost at the recent Rana Plaza disaster, investee companies faced considerable reputational, operational and legal risks if they failed to address these issues.
To date, only one Canadian retailer, Loblaws, has signed the Accord, amid a push-back from Canadian and US retail trade associations to develop less stringent standards. The Accord sets out a program of independent and transparent inspections, an informed and active role for workers and trade unions, health and safety training for workers and management personnel, effective health and safety committees, and the right of workers to file complaints and to refuse unsafe work. The ILO supports the agreement and will play a role in its implementation, and. It has also been endorsed by the UN High Commissioner for Human Rights. The Canadian investors said: “There is no other credible alternative to this agreement.”