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Business News/ Opinion / Online Views/  Rana Plaza and the remedial wagon
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Rana Plaza and the remedial wagon

While Rana Plaza doesn’t yet have the same resonance as Bhopal, aftershocks will affect India as well

The Rana Plaza building containing garment export sweatshops in Dhaka’s Savar locality collapsed on 24 April, killing more than 1,100 people. Photo: Andrew Biraj/Reuters (Andrew Biraj/Reuters)Premium
The Rana Plaza building containing garment export sweatshops in Dhaka’s Savar locality collapsed on 24 April, killing more than 1,100 people. Photo: Andrew Biraj/Reuters
(Andrew Biraj/Reuters)

The aftershocks at Rana Plaza—the dead now in excess of 1,110—continue to redefine the labour and human rights landscape in Bangladesh and, by extension, the corporate social responsibility (CSR) and liability universe. The collapse of a factory building containing garment export sweatshops in Dhaka’s Savar locality on 24 April is fast becoming another benchmark of villainy and slim, overdue virtue.

While Rana Plaza doesn’t yet have the same resonance as Bhopal, aftershocks will affect India as well. India follows Bangladesh both in the absolute value of garment exports and the sector’s share in total exports. Garment exports account for an overwhelming 80% of Bangladesh’s basket. For India, garment and textile exports together account for about 10% of the total. But the existence of sweatshop environments in India in the garment and textile business, besides several other labour-intensive export industries away from the perceived glamour of information technology-related exports, has for long been an ugly truth in this country.

Corporate, watchdog and legal scrutiny now being applied to Bangladesh will inevitably domino across to India and the other South-Asian sweatshop countries of Pakistan, Nepal and Sri Lanka. This will likely spill over to areas beyond garments and textiles to decide go-to countries from the perspective of ethics and CSR, besides minimizing legal and fiscal liabilities. Walt Disney Co., which had a minimal sourcing presence in Bangladesh, has pulled out while urging the application of international labour standards. (Some critics say businesses shouldn’t cut and run after benefiting from outsourcing. They should instead help improve local working conditions as part of its supply chain CSR). In South Asia, India, Sri Lanka, Bhutan and the Maldives currently make Disney’s list of permitted sourcing countries. Along with Bangladesh, Pakistan and Nepal do not.

The government of Bangladesh has scrambled for damage control to bolster worker safety. Among other things, earlier this week the cabinet took a decision to permit the formation of labour unions without waiting for approval of employers. The move, with a stress on safety measures, now awaits parliamentary approval.

Meanwhile, there appears to be some movement for several apparel sourcing companies to sign what European garment industry watchdog Clean Clothes Campaign (CCC) terms a “legally binding, enforceable and transparent" accord on fire and building safety in Bangladesh. The agreement is to be signed by such sourcing companies, IndustriALL Global Union, a relatively new global worker solidarity platform, its colleagues at UNI Global Union, and Bangladeshi unions. CCC will sign as a witness.

Labour and watchdog organizations claim several businesses have agreed to sign up. These include top names: among others, Mango, Primark, Abercrombie & Fitch, Benetton, PVH Corp. (which owns Calvin Klein and Tommy Hilfiger), Carrefour, Esprit, Marks & Spencer, KIK, Tchibo, Tesco, H&M, El Corte Inglés and the Inditex Group, which runs Zara. The accord calls for signatories to work a five-year programme for monitoring safety norms in Bangladeshi factories engaged in garment exports with which such businesses have varying degrees of engagement and also undertake remedial and training activities. A steering committee comprising representatives of unions and businesses is to be chaired by a nominee of the International Labour Organization.

Such initiatives will ride the remedial wagon alongside some individual initiatives of responsibility. As I mentioned in my previous column, while some businesses continue to distance themselves from direct and indirect responsibility for the Dhaka disaster, other organizations such as Primark, in a rare instance of admitting a relationship with Bangladeshi businesses located in Rana Plaza, have undertaken to compensate families of the dead and injured. Others such as Benetton claim they had discontinued an outsourcing relationship with a garment business at the building before the collapse, in this case sub-contracted by one of Benetton’s Indian suppliers. But even though the outsourcing partner “no longer met the stringent standards that would have made it eligible to even potentially work for us," as Benetton chief executive officer Biagio Chiarolanza said in a statement, the company has stepped forward. “We will contribute to providing support to the families of the victims of this tragic event, as we feel that everyone in our industry is morally obligated to do so as this is an issue that touches the entire sector," said Chiarolanza, in a near-echo of Primark’s contrition. “We will do so either by contributing to an existing initiative, or by constituting a fund of our own."

Such demeanour couldn’t come too soon. There are already calls for class-action lawsuits against some businesses linked to Bangladesh’s newest over-the-top tragedy.

Sudeep Chakravarti is the author of Red Sun: Travels in Naxalite Country and Highway 39: Journeys through a Fractured Land. This column, which focuses on conflict situations in South Asia that directly affect business, runs on Fridays.

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Published: 16 May 2013, 11:45 PM IST
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