Uniqlo Rejects Bangladesh Safety Agreement as Worker Unrest Spreads

Uniqlo, the fourth-largest retail brand in the world, has gone the way of Walmart and refused to sign the Bangladesh safety agreement, opting instead to monitor its factories on its own.

"We want to first focus on what we can do right now, on our own," Yukihiro Nitta, head of Fast Retailing's Corporate Social Responsibility group told the Wall Street Journal. He said the company also will hire a Japanese company to assess the soundness of its suppliers' factories in Bangladesh, noting that ultrasound and x-ray technology can be used to check for cracks in concrete and piping.

Most of the 30 companies who have signed, including Uniqlo’s rival H&M, are European. Meanwhile, American companies including Walmart, Gap, JCPenney, Sears and Target have all held out on the point that the agreement includes a legally-binding clause, one that they arguecould hurt US companies more than their international counterparts. For Uniqlo, this isn’t the first time the company, owned by Japan’s Fast Retailing, has come under activist pressure. Earlier this year, the brand bowed to a cause to sign a detox pledge spearheaded by Greenpeace, in which the company agreed to stop releasing hazardous chemicals throughout its supply chain and products by 2020.

While Uniqlo and other retailers go their own way, concerns for safety have propelled US government teams to visit Bangladesh to conduct their own evaluations and meetings with local authorities. George Miller, the top Democrat on the House Education and the Workforce Committee is currently in Bangladesh to personally inspect garment factories and meet with workers, victims, factory owners and government officials. Miller has been urging American companies with factories in Bangladesh to sign the building and fire safety agreement.

Despite the heightened attention on safety, local owners and managers have brought to light a root cause of the issue—a broken system where the cheapest laborers get the most business. Factory owner...