San Francisco, CA – October 2, 2012 – Gap Inc. (NYSE: GPS) announced today a significant initiative to improve building and fire safety standards across the company’s approved third-party garment manufacturing factories in Bangladesh. Underscoring the tangible steps taken in the country over the last two years—including humanitarian aid, fire safety training and education, and fire safety audits—Gap Inc.’s program is a critical step forward to address fire and building safety issues in Bangladesh’s apparel industry.
As part of its approach, Gap Inc. will implement a four-part initiative. The company will:
- Engage a Chief Fire Safety Inspector to conduct fire safety inspections with formal remediation plans and accountability
- Launch a Worker Support Program, providing up to US$2 million to ensure that factory employees at Gap Inc.’s long-standing, high-volume third-party apparel manufacturers who are displaced from work because of fire safety remediation receive payment for work days missed
- Provide vendors accelerated access of up to US$20 million in capital for safety improvements
- Continue to engage with the Bangladesh government, U.S. government and the International Labor Organization (ILO) to promote comprehensive change
The announcement comes after the company engaged in months of constructive dialogue with international labor organizations, Bangladeshi vendors, and other engaged stakeholders in an attempt to find an acceptable framework for an industry-wide solution on improving fire safety.
“Gap Inc. is deeply committed to Bangladesh. We share the same goal with other stakeholders to make tangible change as quickly as possible,” said Bobbi Silten, Senior Vice President of Global Responsibility for Gap Inc. “We believe the time has come to take action, and hope others in our industry will step forward with similar plans that will significantly improve fire safety in the apparel factories in Bangladesh.”
“Gap Inc. has a proven and long-standing commitment to workers’ rights and safety,” said Colin Funnell, Gap Inc. Executive Vice President of Global Supply Chain. “Our company is determined to see that the people working at various points along our supply chain are treated with fairness, dignity and respect.”
Fire Safety Inspections, Remediation and Accountability
The cornerstone of Gap Inc.’s plan centers on fire safety inspections by a qualified and independent inspector. Gap Inc. will appoint a Chief Fire Safety Inspector who will oversee fire and building safety inspections of garment factories producing for our brands in Bangladesh. This fire safety inspection will be based on national laws, internationally recognized workplace safety standards, and existing best practices in Bangladesh.
After the inspection, the Chief Fire Safety Inspector will then outline remediation steps with a specific action plan and regular check-ins to help ensure that these facilities are in full compliance with building, fire and electrical safety standards.
The company will also work with these facilities to ensure that the necessary fire safety training is done and that management systems are in place to ensure remediation. Progress and results will be transparently shared with the Bangladesh and US government agencies, as well as with the ILO.
Gap Inc.’s long-standing vendors with the highest production volume in Bangladesh will be inspected first. The remaining vendors will be prioritized accordingly. While termination of a vendor relationship is a last resort, the company will end production in the event that a factory is found to have failed to remediate a severe and imminent safety risk in a timely manner, is persistently delinquent in remediating other significant safety risks and/or has failed to cooperate with the inspection process.
As part of Gap Inc.’s commitment, the company will launch a Worker Support Program to ensure that factory employees displaced from work because of remediation of significant fire safety risks receive payment of up to one month’s wages for work days missed. Gap Inc. will make available up to US$2 million to its long-standing vendors who have the highest production volume in Bangladesh to help support these payments as necessary.
Access to Capital
Gap Inc. is committed to assisting factory owners in Bangladesh in making the necessary fire and building safety upgrades. Recognizing the expensive cost of capital in Bangladesh, Gap Inc. will provide accelerated access to capital of up to US$20 million as necessary to support the implementation of the required safety improvements.
To create comprehensive change, the company will transparently share with appropriate Bangladesh and U.S. government agencies and the ILO the fire inspection learnings, the plans for vendor remediation and progress against those plans.
About Gap Inc.
Gap Inc. is a leading global specialty retailer offering clothing, accessories, and personal care products for men, women, children, and babies under the Gap, Banana Republic, Old Navy, Piperlime, and Athleta brands. Fiscal year 2011 net sales were $14.5 billion. Gap Inc. products are available for purchase in about 90 countries worldwide through about 3,000 company-operated stores, about 250 franchise stores, and e-commerce sites. For more information, please visit www.gapinc.com/socialresponsibility