G7 to set up new insurance fund for garment industry

15 Jun '15
2 min read
G7 heads of state and government
G7 heads of state and government

There is some good news for garment factory workers. 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 in 2013 in which 1,137 people died when a building housing garment workers collapsed.

According to media reports, the fund would help provide compensation in the event of further similar disasters and provide cash to improve fire inspection and building safety regulations. This can help to make sure that garments are manufactured in facilities that are structurally sound and that they have proper fire safety measures in place.

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.

The insurance fund is also designed to cut compensation delays that were seen by Rana Plaza victims.

Victims and relatives of victims of the Rana Plaza disaster have had to wait over 2 years to see a compensation fund to be able to reach its target of £20 million (approximately $30 million). German Chancellor Angela Merkel added the issue of the working conditions in the textile industry to the agenda for the G7.

The communiqué for the G7 leaders has now called for a “vision zero fund”, which would work as a kind of insurance policy that would be able to provide victims of future disasters with appropriate and timely compensation, and would help to better the working conditions in the first place.

The administration of the insurance fund would be aligned with the International Labor Organization (ILO) and would mean that trade associations in developed nations with representation at the G7 would be required to contribute. This insurance system would protect firms that have made a commitment to taking on adequate disaster prevention measures and that assist in the implementation of social, labor, environmental, and safety standards. (SH)

Fibre2fashion News Desk – India

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