24/04: Revisiting the CSR landscape
Deaths from the factory building collapse in Dhaka underscore the need to address matters of corporate liability
As deaths from the factory building collapse in Dhaka crossed a staggering 900 with several dozen bodies pulled out from the rubble on 9 May, it underscored not only the urgent need for local infrastructure and worker safety in Bangladesh—the builder allegedly constructed three floors illegally—but the equally urgent matter of corporate liability and corporate social responsibility (CSR). As government, multilateral organizations, businesses and NGOs jostle to work out a solution, the outcomes of the 24 April disaster will likely play across India’s export supply chain and CSR landscapes too.
add_main_imageThings haven’t been quite the same since labels for the Spanish brand Mango, and Primark, which operates stores in the UK, Ireland and Spain, were found in the rubble of Rana Plaza. Alongside outrage there have been calls for accountability and to ensure such incidents do not recur in Bangladesh and elsewhere.
Some globalization gurus like Columbia University professor Jagdish Bhagwati have called for Bangladesh to “buckle down and fix the acute governance shortfall that is at the heart of the fires and collapsed buildings”. In a column in The New York Times in early May, Bhagwati also insisted that “blame must be assigned to Bangladesh and not to the brands. Since the factories were locally owned and operated, the blame surely belonged to their owners and managers, not to their clients any more than to those of us who purchased the garments at home or abroad”.NextMAds
While Bangladesh government and businessmen clearly need to fix things, as the owner of a Gap jacket made in Bangladesh and purchased in New York City, I am delighted that several businesses appear to be moving ahead of such strident opinion. With hits to the jaw, businesses learn they have real money to lose from damaged supply chains and damaged reputations that can and do accrue from the Bangladesh-like disasters. If trade economics—whether blissfully theoretical or brutally real-world—supply chain management, human rights and CSR increasingly visit the same page, it can only be to the greater good.
The responses since 24/04 have ranged from avoidance to acceptance of responsibility. In a statement this past week, Mango, the brand owned by Punto Fa, SL clarified that at the time of the building collapse in Dhaka, it “was planning to produce some samples for various company lines, samples that still had not been started”. Mango insisted it “always conducts external social audits on all suppliers it works with in order to verify the working conditions of its employees: non-use of child labour, safety of workplace, remuneration, working hours, etc”.
Clean Clothes Campaign (CCC), a major European watchdog association was less coy about this last point. In a statement on the day of the Rana Plaza collapse, it maintained: “On their website, factories list well known brands as customers including C&A, KIK and Wal-Mart. These brands were also involved”—CCC’s way of saying the suppliers to such brands were based at the location—“in the fire at the Tazreen factory, not far from Savar”—the location of Rana Plaza—“where 112 workers died in a fire exactly five months ago.” Similarly, German “cost-cutter” KIK was also “involved in the Ali Enterprises fire in Pakistan, where nearly 300 workers burned to death last September”.
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First Published:9 May 2013, 06:26 PM IST
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