The Bangladesh Accord: Is Corporatist CSR a Blueprint for Transnational Hybrid Regulation of Apparel Production?

Saturday, 4 July 2015: 10:15 AM-11:45 AM
TW2.3.01 (Tower Two)
Angela Kalyta, McGill University, Montreal, QC, Canada
Working conditions in global apparel supply chains have been notoriously difficult to improve. Regulatory arbitrage and union evasion that is made possible by global capital mobility and labor intensive industries certainly play a role (Esbenshade, 2008; Esbenshade, 2012). As a buyer-driven and labor intensive industry that relies primarily on contracted suppliers and sub-contractors rather than vertically integrated manufacturing, brands can easily hop around the globe to ever cheaper and less regulated labor markets creating strong downward pressure on wages, regulation, and working conditions in the industry (Esbenshade, 2008, pp. 455–458; Gereffi & Korzeniewicz, 1994). In this industry structure, suppliers and workers have little power to contest the terms of contracts, and need to be pliable to the preferences of the lead brands that organize the supply chains they need access to.

In addition, the way that apparel brands compete with each other in product markets makes them resistant to commit themselves to deep changes in their supplying practices. Flexible supply chain management has become the major source of competitive advantage in retail markets, generally (Hamilton, Misha, & Benjamin, 2011): changes proposed by activists are often considered too restrictive to be competitively viable. In apparel, this is about more than just stiff price competition. Apparel brands increasingly compete on their ability to fill stores with lots of different ever-changing styles and respond promptly to local consumer demand. This is the specific aspect of the apparel industry that has been diagnosed as the root cause of most labor violations (Clean Clothes Campaign, 2008; Locke, 2013 chp 6; Oxfam International, 2004; Raworth & Kidder, 2009). The consistently abhorrent sweatshop exposes since the 1990s have inspired substantial activism and consumer concern (Bair & Palpacuer, 2012; Esbenshade, 2008; Seidman, 2007), but the question remains: how can such an industry be effectively regulated across borders? Despite much creative experimentation in program building, the industry has yet to solve the social problems and inequalities produced as a consequence of its sourcing strategies.

In service of this question, scholars of governance and transnational regulation are increasingly studying the hybridity (Oude Vrielink, van Montford, & Bokhorst, 2011), layering (Bartley, 2011), and complementarity (Amengual, 2010) of private codes with other public and private rules. Locke (2013) asserts that public and private forms of regulation will have to combine in novel ways to solve the labor problems of globalization. What precise combinations of public and private institutions will work and how? And who will experiment to create them? In this paper I will consider a recent example of hybridity: the Bangladesh Accord on Fire and Building Safety. I argue that the Accord is a hybrid between a corporatist union contract and more typical forms of transnational private regulation, such as codes of conduct and monitoring. Drawing on research from transnational private governance, global value chains, corporate social responsibility (CSR), and comparative political economy, I elucidate where we can expect successes and failures in the Accord, comparing it to the more typical design of its rival program, the Alliance for Bangladesh Worker Safety. I argue that the Bangladesh Accord is a promising specimen of transnational hybrid regulation. There is good reason to suspect that its use of a legally enforceable union contract that stipulates considerable financial liability for brands, and stabilization of contracts can not only improve factory safety, but also broader working conditions in Bangladesh’s export garment industry. This is because it puts unprecedented pressure on brands – the organizers of global apparel production – to find a competitive strategy and market organization that pushes fewer risks onto their supplying factories. As such, it may prove to be a viable blue-print for addressing the substantial labor problems in transnational garment production. However, these same literatures posit important ways that it may not turn out to be the hybrid that scholars and activists have been looking for, which I also discuss. I finish with a discussion of the broader practical and academic questions that this case raises about the possibly different ‘institutional footprints’ of Varieties of Corporate Social Responsibility.