Alliance to broker $35m fund for garment sector safety

A north American retailers' group has pledged to set up a fund to help garment factories fix their safety problems.
 "Our goal is to create a credit facility of $20-35 million via five local banks. The facility would be in US dollar denominated currency, enabling lower interest rates," the Alliance for Bangladesh Worker Safety said in a statement issued Monday.
To encourage the banks to extend loans to the Alliance-linked factories-especially small and medium enterprises-the grouping will provide technical assistance to the financing organisations on remediation progress.
The Alliance will also cover administrative and startup costs and up to $2.0 million in a first-loss guarantee, it added.
"The fund is additional to the loan provided by individual brands like VF Corporation," Alliance Managing Director M Rabin told the FE.
He expressed his hope that the Alliance loan facility will be launched by next month.
The VF Corporation, an American apparel giant, teamed up with International Finance Corporation (IFC) in September last year to provide US$10 million for financing fire and building safety improvements in the readymade garment (RMG) sector of Bangladesh.
Three local apparel makers have already got fund under the move.
Regarding the post-inspection activities, the statement added that initial assessment of fire, electrical and structural integrity conducted in all its listed 647 factories while some 300 corrective plans have been approved.
The official review panel closed down five factories while 12 were partially closed and two are operating reducing their load.
The Alliance has also announced its plan to conduct its final assessment in at least 60 units by July next following its verification programme in line with the corrective action plans in more than 100 units.
"Once Alliance engineers have verified that a factory has completed all remediation requirements, an independent qualified assessment firm will conduct a final inspection," the statement said.
"By July 2015, we fully expect 10 per cent of all factories to have undergone a final inspection. By 2017-year four of the Alliance-our goal is to have 100 per cent of factories complete their final assessments," it said.  
"The Alliance is concerned that our efforts have been slowed during the current violence, turmoil and uncertainty in Bangladesh. We call upon all parties who are committed to a vibrant and successful Bangladesh to resolve differences through dialogue rather than violence," independent chair Ellen O. Tauscher said in the statement.
     munni_fe@yahoo.com