Gap Inc. Signs Pakistan Accord

Mayu Saini
·5 min read
2

The Pakistan Accord has added an iconic American brand to its signatory roster.

The announcement on Thursday that San Francisco-based Gap Inc. has joined the Pakistan Accord, the first expansion of the International Accord for Health and Safety in the Textile and Garment Industry outside Bangladesh, is being seen as a big step toward defining the future of garment worker and factory safety.

More from Sourcing Journal

The move is being hailed as progress in getting European and North American brands on the same page, or closer to it, on worker safety since the April 2013 Rana Plaza collapse in Bangladesh that killed 1,100 workers and maimed many more thrust the issue into the international spotlight.

Gap Inc. is the 65th brand to sign on to the Pakistan Accord, which is a legally binding agreement between global unions and brands and retailers. The Accord, which began in December 2022, is considered a modified form of the Bangladesh Accord on Fire and Building Safety, which was formed a decade ago. With more than 200 signatories, the Bangladesh Accord has mostly European brands while the Alliance for Bangladesh Worker Safety, had mostly U.S. signers.

In a statement, the International Accord said it’s “pleased to welcome Gap Inc. as a signatory.”

“We are encouraged by Gap Inc.’s commitment to ensuring worker safety in their supply chain and look forward to working with them and their local partners for a safer Pakistani apparel manufacturing industry,” it added. “By signing the Pakistan Accord, Gap Inc. has joined 64 garment and textile brands in enhancing workplace safety at garment factories in Pakistan.”

A Gap spokesperson confirmed the development. “We look forward to participating in the Pakistan Accord and its objective of addressing worker safety in the country’s apparel manufacturing industry,” the rep told Sourcing Journal. “We will continue to advance our existing fire, building and electrical safety efforts in Bangladesh through Nirapon, as well as in Cambodia, India, Indonesia and Vietnam through our membership in Life and Building Safety Initiative (LABS).”

Joris Oldenziel, executive director at the International Accord Foundation, told Sourcing Journal that Gap Inc. signing onto the Accord marked a big step forward that could open the door for more U.S. brands to follow suit in centering worker safety in the South Asian nation.

“Of course we are very excited. We consider the signing of Gap Inc. a vote of confidence in the Accord’s ability to effectively address workplace safety. The signature of Gap Inc. along with our 60-plus other Pakistan Accord brands underlines their commitment to a safe and sustainable Pakistani garment and textile industry,” he said, while adding that the program is continuing to roll forward.

“We have just completed the pilot program in Pakistan and hope to have implementation before the year-end,” he said, adding that more than 500 factories in Pakistan are covered under the agreement. “At the same time, we have to make sure that the path forward is done with care in order to make sure it is more collaborative.”

Christy Hoffman, general secretary at UNI Global Union, said the organization has always wanted an “iconic” company like Gap Inc. to “come in.”

“It shows that we are the only viable, credible option as brands of the world face requirements of due diligence or the future,” she added.

While U.S brands and retailers were reluctant to sign the Accord since it was a “binding agreement,” Hoffman said that inking such deals are a normal part of business. However, as industry analysts observed, many U.S. companies are reluctant to sign deals with unions. The Pakistan Accord trade union signatories are UNI Global Union and IndustriALL.

Another big American firm, PVH Corp., whose brands includes Calvin Klein and Tommy Hilfiger, signed up in January.

In a statement to Sourcing Journal, a PVH executive said the company’s focus is “to drive fashion forward for good.”

“[We] see the Pakistan Accord as a critical step to promote safe workplaces and an opportunity to continue our efforts to advance human rights within our supply chain, ” said Rick Relinger, chief sustainability officer, PVH Corp.

American Eagle Outfitters Inc. signed on in March, but Gap Inc. represents a far larger account and store base.

“Increasingly, the Accord is the only credible option for dealing with the safety issues in the industry. We’ve been reaching out to American brands consistently over the last 10 years. I’ve met with The Gap many times, but in terms of the Bangladesh Accord it just didn’t work out,” Hoffman said.

“We will continue to reach out to other US brands,” she added.

Manufacturers in Pakistan have also been open to the Accord, despite textile and garment exports falling 14.2 percent in the 10-month fiscal period from July 2022-April 2023, with revenue of $13.7 billion, down from $15.98 billion for the same time period in the previous year.

“We have drafted an implementation plan that foresees different phases, and now we are getting towards the end of the preparatory phase collecting all the lists from the brands, setting up a legal entity, and then recruiting the first batch of inspection engineers. We are hoping that we can start the first initial inspections in September and October and then see how we can roll out,” Oldenziel said.

Gap Inc. has undergone significant structural changes over the past year, with CEO and president Sonia Syngal exiting in July 2022. It has laid off 1,800 on top of the 500 job cuts in September last year.

In fiscal 2022, Gap Inc., which owns Athleta, Banana Republic, Old Navy and the namesake Gap brand, saw sales fall to $15.6 billion, compared to $16.7 billion in 2021.

Click here to read the full article.