G7 leaders meeting in Bavaria have agreed to establish a new fund to help improve the global supply chain in the wake of the Rana Plaza disaster in Bangladesh. The fund would help provide compensation in the event of further similar disasters and provide cash to improve fire inspection and building safety regulations, reports the Guardian. The G7 will recommend that western consumers have access to apps that better inform them about whether clothes they intend to buy were manufactured in decent working conditions. It has take more than two years for a compensation fund for relatives of the Rana Plaza victims to reach its target of £20m. Angela Merkel, the German chancellor, put the issue of textile industry working conditions on the G7 agenda, and the leaders’ communique calls for a “vision zero fund” – in essence an insurance fund – to compensate victims of future disasters and improve working conditions. The fund would be administered in conjunction with the International Labour Organisation, and require contributions from trade associations in developed countries represented at the G7. It would act as an insurance system for firms that commit to prevention measures and help implement labour, social, environmental and safety standards, such as better-trained fire prevention inspectors. Extremely low wages have led global brands and retailers to choose Bangladesh over China and other developing countries in recent years, but in many cases the big brands have either turned a blind eye to working conditions in pursuit of profit or knowingly taken no interest in how their clothes are manufactured. The Rana Plaza collapse prompted demands for reforms in a sector that helps Bangladesh earn more than £12bn a year from exports, mainly to the US and Europe. The G7 communique states: “Given our prominent share in the globalisation process, G7 countries have an important role to play in promoting labour rights, decent working conditions and environmental protection in global supply chains. Unsafe and poor working conditions lead to significant social and economic losses and are linked to environmental damage. We will strive for better application of internationally recognised labour, social and environmental standards, principles and commitments.” The communique says it is the responsibility of governments and business to foster sustainable supply chains. National governments must persuade companies headquartered in their territory to conduct due diligence on how their clothes are manufactured. Germany’s federal development minister, Gerd Müller, one of the politicians behind the initiative, said seamstresses in Vietnam or Bangladesh who worked on jeans that could be sold in Berlin for €100 a pair worked at an hourly rate of 15 cents.
