Loblaw joins Bangladesh factory safety pact; Wal-Mart takes a pass

Canada's Loblaw Inc. has put its money where its mouth is and joined an international health and safety accord to ensure Bangladesh textile factories maintain proper working conditions.

It is a big win for the network, with Loblaw becoming one of the first North American companies to join the agreement. But there are many hurdles ahead. The massive Wal-Mart, for one, has announced it prefers the status quo.

Loblaw announced the decision to join the Accord on Fire and Building Safety in Bangladesh after vowing to make changes in the wake of a horrific Bangladesh building collapse that killed more than 1,000 workers in several garment factories.

The Joe Fresh clothing brand, owned by Loblaw Inc., said it had believed the factory had been safe. It later promised to be a "force for good" in the region.

Loblaw Inc. said in a statement to Yahoo! Canada News:

The company further said it would also proceed with improvements it had promised previous to joining the accord, including posting company representatives in its Bangladesh factories.

[ Related: Wal-Mart will not sign Bangladesh accord ]

The announcement garnered the support of the Maquila Solidarity Network, a Canadian advocacy group working with IndustriALL to expand the agreement. Executive director Lynda Yanz said Loblaw showed leadership by joining the cause.

“Loblaw’s leadership stands in sharp contrast to the approach of other North American retailers and brands like Gap Inc. and Wal-Mart, who have actively opposed any binding commitments in Bangladesh even while the body count in Bangladeshi factories mounts,” Yanz said in a statement released to Yahoo! Canada News.

“There is no other credible alternative to this agreement, and inaction is not an option.”

[ More Brew: What does Loblaw’s ‘force of good’ vow mean to Bangladesh? ]

The Accord on Fire and Building Safety in Bangladesh now includes more than a dozen leading clothing brands, including Joe Fresh and the company behind Calvin Klein, which have signed a binding agreement to improve and maintain working conditions, as well as give employee the right to file complaints and refuse unsafe work.

Click here to see the full agreement, and a list of companies that have joined the cause.

Some North American companies have refused to sign onto the accord, most notably Wal-Mart, which said it preferred its own safety strategy.

"While we agree with much of the proposal, the IndustriALL plan also introduces requirements, including governance and dispute resolution mechanisms, on supply chain matters that are appropriately left to retailers, suppliers and government, and are unnecessary to achieve fire and safety goals," a Wal-Mart statement read, per Reuters.

Wal-Mart has 279 factories in Bangladesh, so their absence from the agreement is notable. The company says it is conducting its own safety inspections, which should be completed by June 1.

But whereas the Accord on Fire and Building Safety in Bangladesh legally binds its members into taking action, Wal-Mart's internal review does not seem to answer to anyone outside the country.

On the other hand, kudos to Loblaw for sticking to its “force of good” promise.

Want to know what news is brewing in Canada?
Follow @MRCoutts on Twitter.