Editor’s note: Abdurrahman is currently working for Doing Business
Right project at the Asser Institute as an intern. He received his LL.M.
International and European Law from Tilburg University and currently he is
a Research Master student at the same university.
After the collapse of Rana Plaza which claimed the
lives of 1,138 mostly garment workers and left thousands more injured, the
global outcry for improved worker safety in the ready-made garment (RMG)
industry of Bangladesh caused by global public interest, media attention and harrowing stories of workers has led to the emergence of various international and
national initiatives to address the issue. Three of these initiatives are the Accord on Fire and Building Safety in Bangladesh (the Accord), the Alliance for Bangladesh Worker Safety (the Alliance) and the National Tripartite Plan of Action on Fire Safety
and Structural Integrity in the Garment Sector of Bangladesh (the National Initiative).
Although on the surface, these initiatives appear to be
quite similar and have the primary objective of improving worker safety in the
RMG sector of Bangladesh through inspections and identification of fire,
structural and electrical remediations for garment factories, they show
considerable differences when looked more carefully. These differences
influence the outcomes of the three initiatives on factory remediation for
fire, structural and electrical safety in the RMG sector in Bangladesh. In this
blog, after a brief description of each initiative (for a broader description,
see here), I will discuss the effectiveness of the remediation
processes introduced by the Accord, the Alliance and the National Tripartite
Plan.
The remediation initiatives in the Bangladeshi RMG sector
The Accord
On 15 May 2013 the Accord, which covers more than 2
million garment workers, was adopted for a period of five years to stop
business-as-usual in Bangladesh’s RMG sector. To date, more than 200 apparel brands, retailers and importers from more
than 20 countries in Asia, Australia, Europe and North America, along with two
global unions and 14 Bangladeshi trade union federations have signed the Accord.
Additionally, four international labour rights NGOs have signed the Accord as
international witnesses. A unique feature of the Accord is that its signatories
have made binding commitments – that is, they can be brought before arbitral
courts for disputes arising from the Accord. It stipulates independent
inspections, disclosures of these inspection reports and corrective action
plans (CAPs) and commitments by the signatory brands to assist the financing of
RMG factory remediation. Under the Accord, as of 2018, more than 2,000 factories have been inspected for
fire, electrical and structural issues and more than 130,000 issues have been
identified in the factory inspections, 83% of which have been verified as
fixed. Although the Accord will expire in May 2018. After this date, the Transition Accord, which is signed by 145 brands already (as of 17 April 2018), will replace it for an
extendable period of three years.
The Alliance
Many North American companies refused to sign the
Accord due to liability concerns[1]
and instead they (currently 29 companies, with all but one from North America) formed the Alliance in July 2013 to be active for a
period of five years. The members do not have legally binding commitments under
the Alliance and are just obliged to pay the annual membership fee. The
Alliance also provides for independent inspections and the disclosure of
inspection reports, the preparation of CAPs and the suspension of factories if they
fail to meet the safety standards of the Alliance. Under the Alliance,
inspections have been carried out in more than 900 factories and 85% of all
remediation proposed in the CAPs has been completed.[2] It
does not seem that the Alliance will be extended after 2018, but there have
been efforts to create a local organization that could build on the legacy of
the Alliance and would be tasked with monitoring new and existing factories
according to the standards of the Alliance concerning fire, electrical and
building safety.[3]
The National Initiative
After
the Tazreen fire, the Bangladeshi Government, in collaboration with employers
and workers organizations started to develop an action plan aimed at ensuring
fire safety in garment factories. Although the plan was formally adopted on 24
March 2013, it was reassessed after the collapse of Rana Plaza and the
structural component was included in the plan. On 25 July 2013 the revised
version was adopted. The plan consists of legislative, administrative and
practical activities to promote fire safety and structural integrity in
Bangladesh’s RMG sector. This government initiative, supported and coordinated
by the ILO, inspected approximately 1,500
factories not covered by the Accord or
the Alliance. However, the reports of these inspections are not publicly
available.
The Assessment
As regards the remediation process and ensuring worker
safety in the RMG sector in Bangladesh, each of these initiatives has relied on
different levers of influence and displays distinct results regarding the remediation
of factories. These differences can be explained on various grounds but here the
focus will be on their structures, levels of transparency and enforcement processes.
Governance
Structure
The Accord and the Alliance differ fundamentally in
their structures, and thus also in their outcomes. This distinction is made
clear by Donaghey and Reinecke,[4] who
explain the difference between a traditional Corporate Social Responsibility
(CSR) based approach and what they refer to as industrial democracy.[5] Whereas the Alliance qualifies as a
traditional CSR-based approach since it is a voluntary transnational industry
self—regulation mechanism, the Accord is based on principles of industrial
democracy and involves workers in its design and implementation. Traces of this
distinction can be found in the governance structures of the both initiatives.
The Accord’s governance steering committee consists of three brands and three
unions, meaning that workers are represented.
Moreover, four
international labour rights NGOs are signatories of the Accord as witnesses.[6]
However, as regards the Alliance, the board of directors consists of four
brands, three outside experts and an independent chair, and workers do not get
to participate directly in its governance.[7] As
Donaghey and Reinecke point out, these governance structures indicate that
while the Accord employs a pluralist approach, the Alliance is tilted towards
corporate-driven governance.[8]
These governance structures may have an impact on the
remediation works. The Alliance Agreement stipulates that the Committee of
Experts, which is tasked with factory inspections, “operate under the oversight
of the Board of Directors and the Executive Director.”[9]
This means that inspections are not totally independent, and brands retain the
control over factory inspections. This can be considered illustrative of the
CSR-based approach of the Alliance. It resembles a fox-guarding-henhouse-like
situation which threatens the legitimacy of the inspection process. Although
the Alliance claims that almost all of the identified remediation
processes have been completed, the governance structure and the power of the
board of directors on the remediation process may lead to scepticism around whether
the reality on the ground concerning remediation matches the Alliance's claims.[10] However,
if the composition of the board were more homogenous (including members from
brands and worker representatives), this might enhance the credibility of the
inspections.
Transparency
In terms of the transparency and publication of the relevant
information on the ongoing remediation processes, these three initiatives adopt
different approaches. Firstly, access to information regarding remediation in
the factories under the National Initiative is extremely difficult to obtain. The
Department of Inspection for Factories and Establishments (DIFE) of Bangladesh is the local organization tasked with
inspections and monitoring remediations. However, although the organization
completed its initial inspections years ago, it did not publish the inspection reports, CAPs or
any updates about the progress of factory remediation. It is reported that about 31% of the factories under the National
Initiative have completely failed to complete remediation processes and 36% have
made progress of less than 30% towards full remediation. Yet, the lack of
publicly available information makes it nearly impossible to verify or falsify
these reports.
Similar, though milder, concerns can be expressed
about the Alliance. The Alliance publishes the inspection reports, indicating fire, electrical
and structural issues, and CAPs for each inspected factory. However, concerning
the status of the ongoing remediations and specifically mandated renovations,
no updates have been made public and the only information the Alliance
distributes is a general update, stating that the factory is “On Track”, “Needs
Intervention” or is “Critical”. At this point, one might question what exactly
these designations mean and tell us about the status of the remediation process.
Some NGOs point out that these designations are not always accurate and can lead
to mislabelling of the remediation process in some factories.[11]
They rightly claim that more detailed disclosures on the status of remediation
would incentivize the brands to accelerate the process and help improving the
working conditions in the RMG sector.[12]
The Accord attaches great importance to transparency and relevant
provisions can be found in both the 2013[13]
and 2018[14] Accords. Along with the
inspection reports and CAPs for each factory, the Accord also makes the status of each prescribed remediation for every factory public and only then labels the
factory as “On Track” or “Behind Schedule”. Moreover, it shows the percentage
of completed remediation processes for each factory and issues detailed quarterly aggregate reports. The Accord’s commitment to transparency makes it significantly
easier to access information on the remediation process compared to the
Alliance and the National Initiative and to observe its impacts on the ground.
Binding
Enforcement
Another difference among these initiatives which
affects the remediation process concerns the enforceability of the agreements. The
National Initiative is not a contract in the first place. It is an action plan
containing legislative, administrative and practical measures to address the
issue of worker safety. Although it identifies bodies tasked with particular missions
and deadlines, there are no accountability mechanisms to ensure that the deadlines
are met in the plan. Therefore, the National Initiative can hardly be
considered as legally binding. Indeed, Kahn and Wichterich have found that many of the commitments in the action
plans have not been realised, including commitments relating to factory
remediation.[15] Similarly, the Alliance
Agreement does not require its signatories to give binding commitments, but
requires only the payment of membership fees. The members of the Alliance are
not obliged to demand that their suppliers complete all remediation steps. This
characteristic of the Alliance stems also from its traditional voluntary
CSR-based approach, as emphasized by Donaghey and Reinecke.
On the other hand, the Accord members engage in
binding commitments such as ensuring that their suppliers accept inspections,
implement remediation and respect worker rights.[16]
Failure to meet these commitments can result in the initiation of the complaint
procedure which can lead to a final and binding arbitration process.[17] In
two instances, such binding arbitration procedures have already
resulted in settlements with global unions in which brands are accepted to pay
a sum of money. An important commitment given by the Accord brands regarding
factory remediation is that they have to ensure that substantial financial
assistance is available for the funding of remediation in the factories they
supply from, if it is needed.[18] This
is a distinctive feature of the Accord which cannot be found in the Alliance or
the National Initiative. Indeed, the ambiguities about the remediation
financing in the factories under the National Initiative are stressed by Khan
and Wichterich in their working paper.[19]
These ambiguities can be a cause for the low levels of remediation completion
in the factories under the National Initiative. Thus, it is fair to say that
the binding commitments given by the Accord signatory brands have a significant
positive impact on the remediation process.
Conclusion
Since the Rana Plaza disaster, there have been many
local and transnational initiatives to address labour rights issues in the RMG
sector of Bangladesh. Among them, the Accord, the Alliance and the National
Initiative have endeavoured to ensure worker safety. Yet, the extent of success
that they have each achieved in terms of factory remediation is not the same.
Some characteristics of the Accord have put it ahead of its counterparts. The
level of transparency of the Accord facilitates the access to information
regarding ongoing remediation, while independent inspections and legally
enforceable commitments of the brands are powerful drivers of change in the RMG
sector of Bangladesh. In turn, key aspects of the Alliance and the National
Initiative such as the lack of binding commitments and clear accountability
mechanisms in case of non-compliance threaten the effectiveness of both
initiatives. Moreover, the Accord illustrates the potential of an inclusive approach
in the form of greater industrial democracy in enhancing the enjoyment of the
labour rights. The traditional voluntary CSR-based approach, often labelled as
‘hypocrisy’, adopted by the Alliance has had varying and limited impacts
in creating an environment in which workers can easily enjoy their rights. The outcomes
of the Accord in terms of factory remediation support the need for different
approaches outside of the traditional CSR toolbox.
Although the Accord may have had significantly better
results in terms of factory remediation, it is by no means flawless. Some of
the flaws of the 2013 Accord will be addressed with the Transition Accord such
as the expansion of its scope from just the RMG factories to home textiles, fabric
and knit accessories and potentially to other related industries. Furthermore, ensuring
that adequate funds are available for factory remediation, particularly for
more costly remediation processes, is still a pressing problem.[20]
Yet, the Accord will continue doing its work at least for a period of three
years, and if local bodies are not ready to take up its work by the end of this
period, we can expect that it will remain operational even after that.