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In the article “’We Can’t Compete on Human Rights’: Creating Market-Protected Spaces to Institutionalize the Emerging Logic of Responsible Management“, which has just come out at the Academy of Management Journal, Nora Lohmeyer, Sarah Ashwin and myself argue that the protection of labor and environmental standards in the global economy relies on the construction of “market-protected spaces”, institutionally bound spaces that suspend the dominance of the market logic on selected issues based on a binding regulatory infrastructure that allows prioritizing responsible management practices. This conclusion is based on years-long research on the consequences of the deadly Rana Plaza accident in Bangladesh in which thousands of garment workers were killed or injured. Our research shows that voluntary corporate social responsibility (CSR) initiatives are not enough to address systemic, complex social or environmental problems in the global economy. We agree with De Bakker, Matten, Spence, and Wickert (2020), who
Read the rest of this entry »see an urgent need to address an “elephant in the room” of corporate social responsibility (CSR) research: the systemic constraints exerted by the current economic paradigm that might not be reconcilable with responsible business conduct.
The Garment Supply Chain Governance Project, which ended in June 2019, has recently published its final stakeholder report. After three years of collecting data from 79 lead firms from four countries, 152 factory managers in Bangladesh, 1.500 Bangladeshi garment workers and multiple stakeholders, we see a relatively coherent picture more than six years after the fatal Rana Plaza factory collapse: “Rana Plaza and the resulting public attention to building safety and worker standards in global garment supply chains has led to an enhanced climate for compliance, manifested in a range of new governance models – most importantly the Accord and Alliance initiatives – and more longer-term, stable buyer-supplier relationships that have contributed to improved worker outcomes in some respects. These developments are direct responses to an unprecedented human disaster in the global garment industry which has triggered a positive collective response but not a systemic change towards more sustainable garment production. In fact, our results indicate the fragility of these gains, shedding light on the continued systemic challenges to sustainable labour standards faced by lead firms and suppliers alike.”
These results echo previous findings, not least those reported on this blog, regarding the continued challenge of raising the wages of garment workers and the need for further stakeholder pressure on garment brands and policy makers. In addition, our results provide nuanced insights regarding the current state of buyer-supplier relations and working conditions. For instance, we observe a form of “asymmetrical cooperation” between buyers and suppliers that is marked by increased power asymmetries between lead firms and suppliers on the one hand, but longer-term relations, mutual understanding, trust and continuity of orders on the other. The main problem in these relationships is the continued pressure on production prices, which undermines suppliers’ capacities for improving labor standards. Rather than sweatshops, we argue that many of the larger garment factories in Bangladesh constitute “hardship workplaces”, maked by improvements in workers’ outcome standards
(mainly better health and safety conditions, relative job security and improved social benefits) and process rights (mainly representation in worker participation committees), but continued problems regarding wages, working hours, abuse and management rejection of unions and collective bargaining.
Many of these developments can be tied to the Accord and Alliance initiatives whose presence has clearly created a stricter “climate for compliance” that ensures that basic standards are met. Yet, these initiatives have also further consolidated lead firms’ power and has mixed impacts at best for local labor actors. Overall, we fear that with the fading out or transitioning of these initiatives and a continued lack of stricter regulation of labor standards and human rights in global supply chains – on national and transnational levels – the improvements garment workers gained might be instable. Thus, we conclude: “As Rana Plaza starkly revealed, the safety and wellbeing of millions of workers and their families depend on the development of effective governance
solutions on multiple levels. Our research indicates that despite the progress made in recent years, further efforts will be necessary to help the millions of workers who depend on the garment industry for their livelihoods.”
On the 24th of April 2018, many people around the world commemorated the over 1000 lives lost and the 1800 people injured during the collapse of the Rana Plaza factory in Savar, Dhaka, Bangladesh. The Global Garment Supply Chain Governance Project, together with King’s College London, took this date as an opportunity to bring together the community of international scholars investigating the consequences of this disaster for the governance of labor standards in the global garment industry. Given the high and immediate policy relevance of this topic, the conference was not just purely academic: several representatives from lead firms, supplier factories, policy makers and civil society actively participated in debating and interpreting the research results, and also constituted the strong opening panel. So what are the news for global governance?
A focal point of the debate was the Accord for Fire and Building Safety in Bangladesh, a five-year multi-stakeholder, transnational collective agreement co-signed by over 200 brands and the UNI and IndustriaALL global unions that not only commits brands to pay into a centrally organized safety inspection regime and to ensure continuity of orders for a limited period, but also demands the introduction of worker participation into safety committees in garment factories and provides for legally binding arbitration mechanisms if complaints are unresolved. While Mark Anner, Jennifer Bair and Jeremy Blasi argue that the Accord is not unprecedented, pointing to the “jobbers agreements” drafted between workers, contractors, and lead firms in the US apparel supply chain to ensure fair prices and stable orders in the earlier 20th century, most would agree that the Accord’s governance model is unique in a global supply chain context. Thus, it is often hailed as a solution to the industry’s ongoing and pressing problems regarding labour standards. The Accord departs most from previous initiatives in that it is a collective approach for addressing the “race to the bottom” dynamic of competing on the lowest possible labour standards characterizing the garmen industry since decade – an issue which lead firms only now begin to see as a collective action problem. In analyzing the history of the Accord, Juliane Reinecke and Jimmy Donaghey point out, however, that the Accord was not crafted as a reaction to the Rana Plaza disaster. In fact, it existed previously as a memorandum of understanding on building and worker safety by two lead firms following earlier factory accidents – but other lead firms were not interested in signing it before the fatal factory collapse occurred. Does the Accord stand up to these hopes?
As argued by Miriam Neele, on the panel as Head of Signatory Engagement of the Accord, the Accord program has now covered approximately over 2 million workers in the Bangladesh garment industry and has ensured the remediation of about 85% of the factories covered by the Accord. Data on over 1000 garment workers collected by Naila Kabeer, London School of Economics, likewise indicates that there has been positive change on those issues that Western lead firms can influence, such as building safety and working time, at least in those factories covered by the Accord and by the US-driven Alliance for Bangladesh Worker Safety. Both Frank Hoffer (on the panel as representative of the new Action Collaboration Transformation initiative) and Giesela Burckhardt from the German NGO Femnet, however, stress that wages still need to go up – an issue that is simply not covered by the Accord. Additionally, there is some scepticism as to the actual scalability of the Accord model to other issues and other countries. The renewal of the Accord in Bangladesh has resulted in a rather slow process of getting brands to sign up to the agreement again, and the initiative has faced intense critique from various Bangladeshi stakeholders who think that the Accord has lost its purpose in Bangladesh. In a study conducted by Steve Frenkel (UNSW) and Chris Wright (University of Sydney) and myself shortly after the Rana Plaza disaster we found that intense stakeholder pressure was a main driver behind firms’ willingness to sign the Accord. In the absence of such immediate pressure, it seems that the majority of firms is only reluctantly willing to engage in stricter forms of labour standards regulation, such as those embraced by the Accord.
At least four additional problems must be noted. First, as argued by Kabeer, certain worker-related issues cannot be influenced by Western brands. Most importantly, these are the (mis-)behaviour of supervisors and the still very low level of unionization and worker representation in Bangladesh. Here local stakeholders are called upon to bring forward changes. Second, as repeatedly noted by Dorothee Baumann-Pauly and her colleagues from the NYU Stern school of business, the current safety schemes has at best created “islands of compliance” in which some of the best, most well-financed factories are getting better, while the smaller, already struggling factories remain off the radar – and have notoriously poor standards. Third, the Accord remains an auditing tool – and audits can easily turn into mere reputational devices for lead firms rather than creating actual accountability and liability for brands and their auditors, as Carolijn Terwind, lawyer at the European Center for Constitutional and Human Rights (ECCHR), highlighted on our panel. Fourth, evidence from a survey on 150 factory managers in Bangladesh conduced by Shahidur Rahman (BRAC University) and Kazi Mahmudur Rahman (ULAB) suggests that lead firms rarely support factory’s remediation efforts financially. Thus, while suppliers value continuity of orders, they feel heavily squeezed between ongoing price pressure exerted by lead firms and increased demands regarding infrastructure and working conditions.
An important structural condition must be noted though, which in my view is a core boundary condition for seeing continued improvements in labour standards in Bangladeshi garment factories: unless digitalization is able to replace manual labour in this industry, large volumes of garment production will remain in Bangladesh because, as China continues to reduce its capacities, no other country is to date able to absorb the high demand for garment production. In this sense, the race to the bottom is currently on hold – an unforeseen opportunity for stakeholders in the West as well as in Bangladesh to continue pressing for stricter regulations and better labour standards in this industry.
On June the 9th 2016, More than 12,000 workers from different Yangon factories were protesting in Hlaing Tharyar township against low wages, forced and unpaid overtime, and the firing of organized workers. They were also protesting against the employers’ ignorance against the decisions made by the Dispute Settlement Arbitration Council.
With the introduction of the new labour law and the democratic opening in Myanmar since 2011, workers increasingly articulate inhumane working conditions and labour disputes are rising. Trade unions play a crucial role in helping workers formulating and articulating their complaints. Claiming rights is an important driver for democratic change in a political environment which was characterized by brutal repression of trade unions and labour rights under the military regime for over 50 years. This article discusses the link between trade union’s role in the interpretation, spread, and application of the labour law and the current model of worker organizing. Unions are important vehicles combining legal institution building and democratization trough worker participation. This is important in a context where the labour law, a key pillar in Myanmar’s transition to democracy, is not coherent and the same concepts and words have different meanings to different actors. Today, a multitude of actors, including lawyers, firms, international organizations, the bureaucracy, global and local trade unions, as well as social movements are involved in shaping the meaning of law. Thereby they contribute to the process of its codification.
This contribution shows that law and trade union building are tightly intertwined in Myanmar: Labour disputes have become a key driver for trade union organizing. I point out three ways through which trade union building is linked to labour disputes, shaping the meaning of law in due course: solving disputes through workplace negotiations, supporting dispute settlements through arbitration, and more fundamentally though the involvement of labour in the labour law reform process.
Overall, while trade unions are important for turning law into a social reality, considerable barriers remain leaving employers often disregarding decisions made by the arbitration council and other legal innovations. Read the rest of this entry »
It is assumed that the rise of CSR and the private regulation of labor rights in global supply chains help to improve working conditions in supplying factories. Incidences such as factory burning in Bangladeshis garment industry (one of which killed more than 1100 people) or suicides in China’s electronic industry seem to contradict such assumptions. But also scientific research portrays mixed results on how monitoring and certification impacts working conditions inside factories. This article takes a slightly different approach by asking on how the rise of CSR influences the development of domestic labor rights organizations in the People’s Republic of China. Read the rest of this entry »
It is a sad occasion which currently reminds us of questions about large-distance solidarity, transnational communities and commitment – topics which the workshop Mobility and Civil Society: How Social Commitment Takes Place addresses at the University Freiburg, Germany, in December.
During the last weeks, the second largest industrial tragedy in history has raised public awareness and debate about global inequality of international labor protection once again. The Rana Plaza complex close to Dhaka, Bangladesh, collapsed on April 24. As the rescue work around the former Tung Hai garment factory is still not completed, the reported death toll moves up to around a thousand people. Yesterday, eight people died in another fire in a garment factory in Dhaka.
At this year’s Annual Meeting of the American Sociological Association from 16 – 22 August in Denver/Colorado, the Section on Global and Transnational Sociology featured a number of highly interesting panels and pre-conference activities. Panel topics included Global Governance (co-sponsored with Sociology of Law), Transnational Processes and Institutions, Gender, Globalization and Transnationalism, and Transnational Networks. In addition, a pre-conference meeting, organized by Peggy Levitt and Liz Boyle, discussed new ways of seeing and knowing in transnational and global research. At the Denver meeting the outgoing chair Sarah Babb concluded her highly successful term of office and welcomed the new chair Julia Adams (see interview). Read the rest of this entry »
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