The Unique Political and Economic Opportunities for Negotiating the Bangladesh Accord

Friday, June 24, 2016: 4:15 PM-5:45 PM
639 Evans (Evans Hall)
Angela Kalyta, McGill University, Montreal, QC, Canada
This paper aims to explain the unlikely emergence and wide spread adoption of the Bangladesh Accord on Fire and Building Safety: why in Bangladesh? Why after Rana Plaza and not some other record breaking apparel disaster? Is something changing in how apparel companies are doing business or CSR, can we expect to see this again? Or did Bangladesh present a unique opportunity?

Research focused squarely on the design process of international private regulation regimes is sparse, relatively recent, and has generated few theoretical models (Bartley, 2007; Conzelmann, 2012; Sneyd, 2014). Bartley (2007) is most helpful in that he draws on institutional theory to develop concepts for studying this process. He distinguishes between market collective action theories and political negotiation theories of institution building, and shows that many scholars of transnational private governance have often assumed the former in their study of private codes of conduct, certification, and monitoring programs. That is, they study them as instances of collective action among businesses seeking to create collective goods. These draw on institutional economics, inspired much by works such as Ostrom (1990). In CSR research, these have often been called ‘club theories’ (Prakash & Potoski, 2007). Essentially, in this tradition, activist and consumer pressure in response to perceived corporate malfeasance create threats to firms and even whole industries, making voluntary collective action a rational response of firms (Campbell, 1989; Conzelmann, 2012). Wetterberg (2007) finds that activist targeting is associated with adoption of stronger codes of conduct among apparel firms around the world. Bartley and Child find that thanks to news-making routines of journalists, large global brands are most likely to be targeted (Bartley & Child, 2014). Apparel firms who are not directly targeted by campaigns are merely likely to adopt any standard, not the strongest standards (Wetterberg, 2007). Adoption of codes of conduct in the apparel industry is driven by reputational concerns, but this does not universally drive firms to the strongest codes. The builders of the Accord (globally recognized brands who were directly targeted by highly visible campaigns) can be explained by the club theories, but the large coalition of over 200 companies now includes mostly companies without global name recognition. As such, this approach cannot explain why so many firms who were not the direct target of global activist campaigning joined the Accord instead of the less demanding Alliance. Furthermore, NGOs had been pressuring their target firms about Bangladesh for almost a decade: alone, club theories cannot explain why apparel firms gave in to demands when they did.

On the other hand, Bartley argues program design is the result of ‘embedded bargaining’, and thus needs to be explained, at least partially, by reference to the political institutions that shape political struggle between firms and activists in any given context (2007). After all, social movement scholars have long acknowledged the importance of political opportunities structures in shaping the success and failures of activist campaigns (McAdam, 1982; Tilly, 1978; etc). This paper offers an ‘embedded bargaining’ explanation for the Accord’s widespread adoption, based on findings from newspaper/ archival research and 4 months of field work in Bangladesh. I argue that the consolidation of production in the post-MFA (Multi-Fiber Agreement) period (Gereffi & Frederick, 2010; Gereffi, 2014) provides new economic incentives for brands to invest in their suppliers via strong CSR programs. However, these incentives are limited by political opportunities in countries that receive consolidation. Bangladesh also provided a very unique set of long term political opportunities for activists, and especially unions, to develop what would become the Accord long before Rana Plaza occurred. Together Bangladesh had 3 unique characteristics that are not likely to co-occur again soon: widely seen as ‘the next China’ (especially for European buyers, due to trade agreements), open enough for international unions to have been involved in developing safety standards in the country for almost a decade, and finally, the fatal luck of having 2 record breaking disasters within 6 months of each other. Alone, none of these factors would have been sufficient, they were all necessary to provide the motive, means, and opportunity for stakeholders to sufficiently pressure enough major brands to adopt the Accord to produce a tipping point for smaller companies to feel safe joining. As such, I argue that we will likely not see the Accord spread.

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