CSR Responses in Bangladesh after Rana Plaza

Juliane Reinecke
Session Organizers:
Angela Kalyta and Jette Steen Steen Knudsen
Friday, June 24, 2016: 4:15 PM-5:45 PM
639 Evans (Evans Hall)
The 2013 Rana Plaza collapse in Bangladesh’s garment industry was a stark reminder of the human cost of the cheap fashionable clothes that we enjoy. Over 1100 people died, and many more were injured. Rana Plaza had failed public and private inspection, but was not forced to repair or close. This event renewed global attention to our urgent need to develop effective regulation for working conditions in transnational apparel supply-chains. All of our existing policy tools simply fail to work in transnational ‘fast fashion’. State-based policies may be enforced but are easily evaded with highly mobile contracts, and Less Developed Countries who are willing to regulate labor standards do not necessarily have the autonomy or capacity to effectively do so (Evans, 1995). On the other hand, private Corporate Social Responsibility (CSR) policies are widely adopted but unenforced, most often resulting in an uncoordinated patchwork of voluntary initiatives that rarely includes the input of the stakeholders they are meant to protect. When companies are more punitive vis-à-vis their suppliers, they continue to constantly face labor violations, and factories merely cycle in and out of compliance (Esbenshade, 2012; Locke, 2013).

This is because the industry structure is fundamentally incompatible with the improvements aspired to in codes of conduct. In buyer-driven consumer good supply chains (Gereffi & Korzeniewicz, 1994), like apparel, labor standards violations are a result of the ordering practices of lead firms, for it is lead firms, not factory managers, who determine the terms of production that effect working conditions most: speed and price. Even the most benevolent of industry leaders in responsibility rarely change their ordering practices to be consistent with the codes of conduct that their compliance departments try to enforce in their supply chains (Locke, Amengual, & Mangla, 2009). Some firms have independently committed to strict changes to their practices, but these have remained the minority in the apparel industry (Bartley, 2007). Legal scholars in the area have been increasingly focusing on hybridity, layering, complementarity, etc. between CSR and different sets of rules (Bartley, 2011), but we still know little about how CSR interacts with its institutional environment in developing countries. Locke (2013) argues that some hybrid form of regulation is needed to address labor violations in international supply chains, which can leverage the strengths and avoid the weaknesses of enforced/public, and voluntary/private regulatory models, but it is not at all clear what such a hybrid could look like.

Amidst the tragedy, Rana Plaza led to an unprecedented endeavor: the Bangladesh Accord on Fire and Building Safety, a hybrid between national corporatist union contracts and transnational voluntary codes of conduct. Chaired by the ILO, it is a transnational union contract that requires the signatory apparel companies to fund factory repairs for their Bangladeshi suppliers, which they cannot evade: it binds them to keep steady their ordering volumes in at least 65% of their Bangladeshi suppliers and Bangladesh, over all. The agreement is enforced via legally-binding arbitration in their home country. Apparel companies have been resisting much of the Accord for decades, and yet, over 200 companies from over 30 countries have signed it. The widespread adoption of the Accord is especially puzzling because a more typical voluntary program, the Alliance for Worker Safety, was established around the same time, but only 27 companies have joined it. Together, they cover over half of the apparel factories in Bangladesh, and despite their differences, they coordinate together and with the Bangladeshi government to inspect and oversee factory inspections and repair.

The safety initiatives in Bangladesh have become critical cases for scholars interested in labor issues and CSR in transnational supply chains (especially apparel), both in terms of outcomes and program design/adoption. There has been much hope that the Accord could serve as a watershed moment for the industry, maybe even a blueprint for effective transnational labor policy. For Bangladesh, there is hope that the widespread coalition of brands and unions can build policy networks that are capable of building lasting solutions to labor issues in apparel, possibly even empowering the union movement. This interdisciplinary session will showcase the diverse perspectives being taken by researchers to consider the origins, development, and outcomes of these programs: What can we learn from the Accord’s unusual genesis? Are these programs effective? How do these programs interact with Bangladeshi institutions to help workers (or not)?

Bartley, T. (2007). Institutional Emergence in an Era of Globalization: The Rise of Transnational Private Regulation of Labor and Environmental Conditions. American Journal of Sociology, 113(2), 297–351.

Bartley, T. (2011). Transnational Governance as the Layering of Rules : Intersections of Public and Private Standards Transnational Governance as the Layering of Rules : Intersections of Public and Private Standards. Theoretical Inquiries in Law, 12(2), 517–542.

Esbenshade, J. (2008). Going Up Against the Global Economy: New Developments in the Anti-Sweatshops Movement. Critical Sociology, 34(3), 453–470. 

Esbenshade, J. (2012). A Review of Private Regulation: Codes and Monitoring in the Apparel Industry. Sociology Compass, 6(7), 541–556. 

Evans, P. (1995). Embedded Autonomy: States and Industrial Transformation. Princeton: Princeton University Press.

Gereffi, G., & Korzeniewicz, M. (Eds.). (1994). Commodity Chains and Global Capitalism. Westport: Praeger.

Locke, R. (2013). The Promise and Limits of Private Power: Promoting Labor Standards in a Global Economy. Cambridge University Press.

Locke, R., Amengual, M., & Mangla, A. (2009). Virtue out of Necessity? Compliance, Commitment, and the Improvement of Labor Conditions in Global Supply Chains. Politics & Society, 37(3), 319–351.

Neoliberal Sufferings of Garments Workers in Bangladesh
Shahadat Hossain, University of Dhaka
Business Interests in Post-Rana Plaza Bangladesh: Understanding Brands As CSR Actors
Jimmy Donaghey, University of Warwick; Juliane Reinecke, University of Warwick