Pakistan Accord: 8-Month Pilot Study Reveals Factory Progress and Potential
On its way to setting its new country program in Pakistan this year, the International Accord for Health and Safety in the Textile and Garment Industry last week revealed the results of a pilot program documenting an eight-month study of garment and textile factories in Karachi and Lahore.
The number of signatories in Pakistan has been growing since the safety program was announced in December 2022. The agreement is between global unions UN and IndustriALL, and brands and retailers. It now includes 64 signatories from global brands and retailers that source from Pakistan, including H&M, Hugo Boss, Inditex, Marks & Spencer, Mango, Primark, PVH, Puma, among others.
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Approximately 450 factories are covered under this agreement.
“The pilot was part of our preparatory work to really develop the program—the purpose was to finalize the Pakistan Accord building standards on the basis of what we are finding in the factories and then develop a corrective action plan,” Joris Oldenziel, executive director, International Accord told Sourcing Journal.
“We do see that a lot of remediation has already taken place in the last 10 years, so we are not starting from the same place [as when] started in Bangladesh in 2013; certainly a lot of fire and building safety is already done,” he added.
The experience of 10 years in Bangladesh when the Accord first started on May 15, 2013 after the collapse of Rana Plaza has shown participants that manufacturers must be better included in the planning, according to industry analysts.
The eight-month pilot program studied seven factories.
“I’m pleased that it’s on the road, and that we’re seeing the building up of the whole system. It’s given us a strong base line on where we need to focus,” Atle Høie, IndustriALL general secretary said. He noted difficulties and challenges, including registration, working with local and national governments and manufacturers, and incentivizing manufacturers to crunch their numbers to get up to speed. But there were benefits too, he pointed out: “When manufacturers see that they are able to get financial assistance from the brands and claim compensation when it comes to cleaning up, it is something that they do welcome.”
Oldenziel said the study didn’t yield many surprises and was “pretty much what we expected,” showing that “the [Accord] program will be beneficial for safety.” The caveat, he added, was that since only a small seven-factory subset was included in the pilot, it does’t necessarily paint the full picture of issues faced by all the manufacturing facilities.
But the upside is the issues raised are “not insurmountable,” he said. “Most of the factories already started work on the remediation right [away] and say that they are able to conduct the remediation. They also talk about the challenges, and these are not surprising either, like technical guidance on installing fire alarms in accordance with international standards, listed fire doors and installations and fire alarm systems, potentially financial support to procure certain equipment etc.”
Manufacturers in Pakistan have battled increasing economic pressures over the past year, with textile and garment exports falling 14.22 percent in the first 10-month fiscal period from July 2022-April 2023, with revenue of $13.70 billion, down from $15.98 billion for the same time period in the previous year.
Results for the fiscal 2021-22 year ended June 30 were $19.32 billion, up from $15.39 billion in fiscal 2020-21, and $12.52 billion in 2019-20.
Like their counterparts in Bangladesh, manufacturers in Pakistan are worried about the costs of fixing their factories.
Oldenziel acknowledged these concerns. “There are significant investments needed to be made, and it is logical that Pakistani manufacturers want to know that more orders will be coming in, but it is a mixed bag,” he said. “To some extent there is an understanding that if these are addressed in a reasonable manner, the benefits will outweigh the costs.”
The evolving Accord comes as manufacturers faces high inflation, escalating gas and power prices, and depleting foreign exchange reserves that have put a hold on purchases. Can remediation investments be realistic for manufacturers?
“We have to take that into account—whether [manufacturers] can buy what is needed with the foreign exchange reserves, if they can get open letters of credit, with what the corrective action procedures require,” Oldenziel said. “We also need to see what intermediate actions can be taken, maybe by setting up testing laboratories, or manufacturing of the items within the country. Financial, political or economic situations cannot be a reason to maintain unsafe factories.
“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 pilot inspections in September and October and then see how we can roll out,” he said.
While the signatories want to get started, and see factories certified sooner, the first batch of factories are on track to be remediated before 2024.
“We want to go fast, but at the same time this does require a lot of preparation and it has to be done with care, in order to make sure the collaborative processes are followed,” Oldenziel said.
Some of the strengths that will speed the process along is the existing knowledge base, according to the pilot report, which noted that: “A consultation with engineering experts in Pakistan found that there is sufficient code knowledge in the engineering community in Pakistan to begin working with factories to remediate safety issues. Nevertheless, clear guidance will be needed on how to remediate existing buildings, which calls for particular experience.”
The report highlighted key areas where measures are needed to ensure minimum life safety standards including:
Structural design checks & preparation of accurate building drawings.
Fire-separated construction and sufficient protected exit routes to allow safe egress in case of fire.
Proper installation & testing of fire alarm & fire suppression systems to ensure full functioning in case of emergency.
Electrical system design and installation conforming with code requirements, as well as maintenance & cleaning regimes to prevent electrical hazards.
Maintenance and repair of boilers and their associated systems to mitigate the risk of serious accidents.
The Pakistan Accord on Health & Safety in the Textile & Garment Industry launch in December, with an agreement to establish a new workplace safety program in the country for an initial term of three years.
It also increased its scope from the agreement in Bangladesh, to include home textiles, which is a big segment in Pakistan, and to cover mills.
In conclusion, the report noted: “Following this pilot, the Accord intends to finalise the Pakistan Accord Building Standard through consultation with engineering experts in Pakistan and thereafter conduct full initial inspections at the pilot factories with reference to the finalised standard. Thereafter, the Accord will prepare to establish an inspection and remediation program to cover all factories supplying to Accord company signatories,”
The Bangladesh numbers shared earlier this year at the tenth anniversary of Rana Plaza in April show there’s more work to be done. That Accord has resulted in more than 56,000 inspections across 2,400 garment factories in Bangladesh and well over 140,000 safety issues corrected.
Atle Høie, IndustriALL general secretary, agreed that there’s much to do, but focused on the progress being made. “We’re on the right path,” he said.
