Partnerships at Work: Systemic Reform in Bangladesh’s Apparel Sector
By Rev. David Schilling
From the Winter 2013 Edition of Values
This column highlights selected groups and organizations working to promote social and economic justice, environmental leadership, or corporate accountability. Walden often supports the work of featured groups and partners in research and advocacy initiatives.
Rev. David Schilling is a senior program director at the Interfaith Center on Corporate Responsibility (ICCR). ICCR is the pioneer coalition of active shareowners who view the management of their investments as a catalyst to promote justice and sustainability globally (www.iccr.org).
For years the Bangladeshi government has failed to enforce safety laws, overlooked human rights violations, and kept minimum wages at a poverty level. The 1,131 workplace deaths at Rana Plaza on April 24, 2013 galvanized trade unions, non-governmental organizations (NGOs), governments, companies, and investors to enact systemic reforms to ensure worker safety and welfare, and to fix the broken social compliance system that has failed to prevent violations of workplace human rights.
In response, the Interfaith Center on Corporate Responsibility (ICCR) formed a global investor initiative of more than 200 investors representing $3.1 trillion in assets under management. Together these investors are calling on industry leaders to make sure that the Bangladeshi garment industry does not go back to business as usual. Specifically, ICCR’s investor initiative is pressing companies to:
- Join the Accord on Fire and Building Safety, which includes global and local trade unions, NGOs, and the International Labour Organization (ILO), to implement plans with measureable goals to address all aspects of fire and building safety in a timely manner.
- Commit to strengthening local trade unions and to ensuring a sustainable living wage for all workers.
- Publicly disclose all suppliers (including those from Bangladesh); the programs they have in place to ensure the safety and health of all their workers; and their performance against stated goals, including any corrective action.
- Ensure that appropriate grievance mechanisms and remedies are in place for affected workers and families, including compensation.
ICCR’s Bangladesh Investor Initiative sees the Accord on Fire and Building Safety (www.bangladeshaccord.org
) as the best vehicle to make the systemic reforms needed to protect workers’ lives. The Accord requires a binding commitment of brands and retailers to stay in Bangladesh and make changes to ensure worker safety; involves a multi-stakeholder group with 110 companies cooperating with trade unions to build a sustainable safety system; and creates an oversight committee made up of companies, trade unions, and an independent chair from the ILO.
The Initiative identified 24 apparel companies that have yet to join either the Accord or the Alliance for Worker Safety (a weaker, U.S. initiative of 26 companies). These publicly traded companies were sent a letter signed by institutional investors from 12 countries—faith-based investors, public pension funds, union pension funds, and asset management firms, including Walden Asset Management—urging them to join the Accord. Investors are engaging the companies and regularly reporting on the results of the engagement. Adidas responded to the letter coordinated by Boston Common Asset Management by signing the Accord in October, a tangible outcome of collective investor leverage.
Recent positive developments on the ground in Bangladesh include the Accord and the Alliance agreeing to use common standards for factory inspections; the establishment of an international trust fund for the families of workers killed or injured in the Rana Plaza collapse; a proposal to raise the garment industry’s minimum wage to $68 a month from the current $38 (well below the $100 advocated by workers); the ILO working with the Bangladesh government to inspect up to 1,200 factories not covered by the Accord or the Alliance; and the introduction of the ILO/IFC’s Better Work Program in Bangladesh to improve compliance with core international labor standards.
ICCR views this work as urgent, necessary, and not optional for any global company’s responsibility to respect human rights by showing what they are doing to make sure workers and communities are not hurt by corporate behavior. The way forward is through multi-stakeholder initiatives rooted in workers and communities and guaranteeing the fundamental human rights of workers.
One participant in the investor initiative, Helena Vines Fiestas, senior SRI analyst, BNP Paribas Asset Management in Paris, summed up the role of investors: “Companies need to hear the same message from investors of all sizes—that systemic reform is necessary to address worker safety and business risk.”