G7 leaders come to agreement for new insurance fund for garment industry

International Insurance fund news

This new program is meant to help to prevent a recurrence of anything like the Rana Plaza disaster of 2013.

In Bavaria, G7 leaders have agreed to put a new insurance fund into place in order to create meaningful improvements to the garment industry supply chain and to ensure that there will never again be a repeat of the disaster at Rana Plaza in Bangladesh in 2013, in which a building collapsed and killed 1,137 workers.

Beyond prevention, this fund will also help to provide compensation to victims of disasters in the future.

On the prevention side, the insurance fund is meant to help to ensure that proper building safety regulations and fire inspections checks take place. 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 also intends to take this effort further by making sure that consumers in the west will be able to use apps that help them to learn about the production history of the clothes that they are considering for purchase. This will help consumers to ensure that workers making the clothing will be working under satisfactory conditions.

The insurance fund would also help to prevent the compensation delays that were seen by Rana Plaza victims.

International Insurance fund newsVictims and relatives of victims of that 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 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.

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