Avainsana: Bangladesh

Julkaistu

Supplier and auditor subcontracting should be more effectively controlled to ensure reliability of CSR

Corporate social responsibility initiatives should look closely at Wal-Mart’s new supplier policies, announced earlier this week. To get subcontracting under control is essential if they are to retain their credibility. Otherwise one can ask with much justification whether social audits, certifications or other reports are always really reliable.

When a supplier that has been audited and approved by a brand or retailer moves production to another site without even notifying the buyer, we are dealing with deception which also pulls the rug from under any social audits or certifications. This happened in Bangladesh when orders were moved without authorisation by a supplier to the Tazreen garment factory. A devastating fire at this workplace took over 110 lives last November.

Wal-Mart’s new instructions to suppliers should put an end to this kind of wild subcontracting. If a supplier gets caught, the game is over and the business relationship ends.

Problems will of course remain even if subcontracting comes under control. Supply chains can be long, from commodities to product components, before work reaches audited plants and factories. Tracing is difficult, but new RFID technologies should make it easier. Swiss specialist retailer Switcher, a leader in corporate responsibility, already enables consumers to trace the history of the garment which they buy by entering its label number on the company’s website.

Wal-Mart’s new rules are a major step in the right direction.

In Pakistan, where fire devastated the Ali Enterprises plant in September, leaving well over 200 garment workers dead, a private auditing firm had granted the factory an SA8000 Certification only weeks earlier. Neither SAI nor the controlling agency SAAS knew this. Also here, subcontracting was involved. The large Italian company had outsourced the social audit to a local contractor.

In both cases the system did not function and control was lost. Wal-Mart has acted swiftly, will the CSR schemes and initiatives and the social auditing community follow suit?

Auditing companies subcontracting out their social audits is reportedly common in the industry. In most cases this would probably not cause problems, and the audits be professional and correct. Still, there is the question of lacking controls, oversight and responsibility. The tragic catastrophes in Pakistan and Bangladesh should be reason enough for even radical action.

Schemes and initiatives should consider whether not also subcontractors would have to be authorised by the control structures that have been set in place. This also means that auditor training and competence would be better secured. There may also be countries where conditions are such that reliable auditing and this also certification is impossible.

Through my engagement in SAI, I have suggested  that the importance and status of theSA8000 certificates should be raised. The certificates should be securely printed and individually numbered, and the numbers should be registered centrally first when an empty certificate is given to a certification agnecy and then again when it issues the certificate to a supplier workplace.  This would tighten controls, define where responsibilities for certifications are,  and protect the system agains fraud and abuse.

I have also suggested that social auditing systems should consider learning from financial auditing, where auditors are both qualified and prepared to follow a company even between the audits. This would also mean that management would have a discussion partner when taking corrective action and launching other remediation activities.

Yes there could be conflict of interest issues at times, but it would still be better than letting situations deteriorate between the snapshots that are taken during the days of audit. It would of course add to costs, but in many cases this investment would be necessary. On the other hand it will be supported by the ongoing work within GSCP to drive convergence of these schemes and initiatives and cut the number of audits through a built-in mutual recognition of reports and certificates.

All this does not mean that brands and retailers would be able to give up a direct involvement and monitoring of conditions. Already the UN Guiding Principles expect them to apply due diligence in their supply chains which not even the most reliable audit schemes can compensate.

The most important thing would still be to involve workers themselves and empower them to participate in making sure that conditions are correct. How this is done when there is no trade union in place requires careful consideration, to ensure that it does not become an alternative to workers’ right to regular social dialogue and collective bargaining.

Julkaistu

Wal-Mart’s harder line on supplier subcontractors could help open way for concrete improvements in Bangladesh factory fire safety

Wal-Mart’s harder line on suppliers that use subcontractors without the retailer’s approval is an important step in the right direction.

“Our message of zero tolerance is meant to get people’s attention,” Wal-Mart’s Vice President for Ethical Sourcing Rajan Kamalanathan says in today’s Wall Street Journal.

Of course, especially suppliers are supposed to listen carefully. Without informing the US retail multinational, one of them had placed part of an order at the now infamous Tazreen garment factory in Bangladesh, where over 110 workers perished in a devastating fire late last year.

Subcontracting arrangements are indeed one of the biggest problems for corporate social responsibility schemes and social auditing. A supplier factory may be in proper shape, but the conditions at subcontractors could then be completely different. Getting subcontracting under control is an important task.

The factories which produce for Wal-Mart will have to undergo obligatory fire safety control and comply with certain requirements before they are allowed to supply the US-based retailer. They will also be required to have secondary exits from all floors, and their electrical systems have to be safe. There will also be regular follow up checks, and closer monitoring.

The observations made by Turkish fire safety expert Dundar Sahin when he visited a range of Pakistani garment factories last autumn on behalf of Social Accountability International SAI ( SA8000 ) confirmed that there is indeed much to do to ensure worker safety in these plants.

To just dismiss the measures by the world’s largest retailer like some campaigners have done in their first comments is not constructive. Cartainly, both Wal-Mart and other buyers from the Bangladeshi garment industry will have to be prepared to carry part of the costs for making workplaces safer. The Wall Street Journal that the retailer is looking at creating a fund or a revolving line of credit to support these necessary investments. This should act as an example also for other large buyers to follow

The basic reasons for poor conditions for garment workers in countries like Bangladesh and Pakistan are bedded into the global supply chain system itself. Low prices in consumer countries are too often based on poor working conditions in the producing regions. This will not change overnight, but the reactions to the recent fire catastrophes in Pakistan and Bangladesh can perhaps launch a general development in a positive direction.

Also, we should not forget that these industries are essentially important for the producing regions and countries to develop their own economies and  offer livelihoods for their people. This cannot be done at the cost of safe workplaces, decent working conditions and human dignity. It is clear that whatever differences there may be, this is now generally accepted by both the global business community and other stakeholders. Now is the time to work effectively to promote these principles without compromising the task by letting other considerations override it. This concerns equally the business sector as it does trade unions, campaigners and others.

Finally, once again some campaigners are calling for making social audit reports public. This would effectively destroy all workplace auditing. Confidentiality of all audits and reports is a condition for workers and others to be able to speak out about workplace problems, and a necessity to protect those that do it. Campaigner mistrust against business should not lead to destroying what may often be the only existing instrument to monitor the reality in these vulnerable supply chains, and thus create a basis for a concrete improvement of working conditions.

It will be both interesting and important to follow how the Wal-Mart initiative will transform into a broad action and to a changing reality on the ground in countries like Bangladesh.

Julkaistu

Bangladesh fire safety: Instead of only attacking multinationals the EU Parliament should seek their engagement and support

Not well chosen words by the British Member of the European Parliament Richard Howitt when he spoke at the Plenary yesterday on fire safety in Bangladesh factories:

“So in this debate we should condemn companies, including Walmart, Gap and Sweden’s H&M, who have so far refused to sign Bangladesh’s fire and building safety agreement to upgrade factories.”

It should be remembered that this is only one of many proposed projects and that also others are in the makings.

To start by condemning huge and resourceful companies who should instead be welcomed to be part of the efforts to improve supply chain conditions is not particularly smart.We can have our own views on how they are operating, but if change is to come about they must be angaged. All three of them have committed to this, and rather than pushing them away they should of course be invited to participate.

It is also fair to acknowledge that much has already been done by these three multinational retailers to address fire safety and other issues in their supply chains. Perhaps not enough, and perhaps purchasing practices still need to be changed to bring about real advances, but this is not the way to do it. It just seems that much of the criticism stems from the campaigners who own the project which Howitt referred to.

In Bangladesh itself a tripartite cooperation has been established, supported by the ILO. Why can this not be the the EU approach as well?

That Howitt spoke as the Parliament’s rapporteur on corporate social responsibility would have made his words even more difficult to understand if the debate had really been only about fire safety and Bangladesh. Now Howitt turned his presentation into a general call for stricter regulation of brands and retailers in supply chains, through the UN Guiding Principles and the OECD Guidelines for multinationals.

I can agree with much of what he said about the need for buyer companies to get more responsible for and involved in supply chain conditions. What is sad though is that once again, already disadvantaged supply chain workers are made into instruments for promoting political objectives, however good these objectives might be.

It was also not well advised by the rapporteur to single out one of the planned factory fire safety projects for this part of Asia. The campaigner-driven project that he referred to should be supported, as of now only two companies have signed up, but there are others as well which can have a similar or perhaps even a bigger impact. It is time for coalition building, not infighting in the consumer countries.

I hope that this less fortunate presentation and formulation of the resolution will not weaken efforts to come to grips with global supply chain problems. MEP Howitt is widely appreciated for his strong support for social and economic justice, but this time things just seemed to go less well.

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Julkaistu

Tripartite cooperation in Bangladeshi textile industry to address fire safety problems

The fire safety problems in the Bangladeshi textile industry are to be addressed locally, through a tripartite cooperation. The government, the manufacturers and employers associations, and the trade unions signed a joint commitment yesterday. A National Action Plan on Fire Safety will be developed before the end of February.

This is good news for everyone, particularly for the country’s garment workers who will hopefully see a fast improvement of their conditions. A broad cooperation in the countries which consume these products becomes even more urgent now, to support the action of the local partners and to work alongside with them.

Also leading multinational brands and retailers are clearly prepared to participate in bringing real improvements about. Now is the time to transform this commitment into concrete action, in cooperation with governments, trade unions and civil society organisations. The work does not need to start from scratch, much has already been done through various projects, particularly with regard to awareness raising and training.

What is new now is the realisation that also such things as the factory premises themselves, fire safety equipment, safety inspections, firefighting capacity and other structures and procedures have to be brought up to acceptable standards. This will be expensive, and buying brands and retailers as well as the end consumers have to be prepared to participate substantially.

Let’s hope that the ILO-supported tripartite initiative in Bangladesh will lead to similar cooperation in other countries concerned, particularly Pakistan.

Julkaistu

European Parliament members call for more brand and retailer responsibility – but new labelling standard for global supply chains may be unrealistic

Today’s European Parliament discussion about factory fire safety in Bangladesh and other supplier countries is significant for the whole concept of corporate social responsibility. For the first time there is a serious attempt at this level to force multinational brands and retailers to require their suppliers to respect ILO Labour Conventions. The resolution has been put forward by a broad coalition of political groups which should mean that it becomes the opinion of the Parliament.

Even if the way to European legislation will still be long, this is an important initiative. It should lead to an active and constructive exchange about the best ways of ensuring the human rights and proper working conditions for supply chain workers.

The EU parliamentarians propose a new labeling standard to ensure that the labeled product has been produced in accordance with the core ILO labour standards. Whether this is useful can be discussed. Those of us who have worked actively with these issues know how difficult it is to develop a reliable social labeling system, if not outright impossible. Who would interpret whether conditions have been right. What about countries where freedom of association is not fully respected? How would the controls be built up? Would labels be required for all products and all producing countries, including the EU Member States, Switzerland, Norway, United States, Australia – just to mention a few.

I also doubt whether still another social standard would make sense. The problem today is rather that there are too many of them. This is a main reason for the Global Social Compliance Initiative GSCP driving an upward convergence and mutual recognition. If the EU starts to work for still another code, and establishes a labeling system, it will once again move resources away from improving workers’ conditions, to multiple auditing and added bureaucracy.

Still, the initiative itself is good and commendable. Also when it comes to fire safety, this should contribute to real improvements of today’s situation in many countries, particularly in Asia. The European countries need to make it clear to governments in some of the supplier countries that they have to improve their act considerably if they want their industries to enjoy a continued access to the EU markets.

Also private initiatives are continuing and evolving, initiated both by the corporate world itself or launched by civil society organisations. All those who are involved have to show the maturity and responsibility to cooperate rather than engage in attacking and questioning the seriousness or justification of what others are trying to do.

If something good is to come from the recent tragedies, it could perhaps be a more general acceptance that human rights are universal, that they have to be actively supported also in global supply chains, and that decent working conditions cannot be denied whatever competitive interests companies believe that they have.

Julkaistu

Bangladesh and Pakistan factory fire safety must be supported by broad coalition that lays aside other conflicts

Companies, unions and campaigners must set aside their differences and work together on supply chain fire safety.

If we really want to help improve factory fire safety in Bangladesh and Pakistan we need to move from talking to doing. There is one effective working week left for the global economy and supply chains in 2012. This is not much, but should be enough for concrete commitments to be made and plans of action agreed. This allows for the all-important work on the ground to begin early next year.

Already before the tragic factory fire in Bangladesh, I took the initiative to raise fire safety issues urgently also within the Global Social Compliance Programme GSCP. This was a reaction to the disastrous fire that struck the Ali Enterprises garment factory in Karachi in Pakistan in early September, and was readily agreed to by both the executive and advisory boards.

Nobody would of course have wanted to see that when the boards met for a joint meeting in Switzerland at the end of November, there was a second disaster to prove that urgent action is needed to protect the safety of workers in these as well as many other countries, where the present situation is bad beyond belief.

When I asked GSCP to take this up as an urgent issue on the joint agenda of the executive and advisory boards it was because of the unique convening power that this programme has among buyer brands and retailers.

GSCP itself is not really adapted to deal itself with the immediate needs for correcting the safety situation on the ground. It is more of a platform for encouraging and advising buyers and retailers on integrating high social and environmental standards into their supply chain behaviour. Driving upward convergence of individual codes, standards and other tools to achieve this, GSCP can help to move resources from social and environmental auditing to the all-important capacity building and remediation at supplier workplaces.

Leading global brands and retailers are already working together within GSCP on many aspects of supply chain responsibility, both on central levels and in regions where their buyers are active. When it comes to social and environmental conditions, the approach is non-competitive. I am convinced that we will very soon see this culture of working together forming a realistic and solid basis for their concrete and substantial contributions to making supplier factories safer for the workers.

This will further underline the important role that GSCP plays, but also that of individual corporate responsibility schemes and initiatives. They are not there as a substitute for obligatory rules or collective bargaining between employers and trade unions, but a tool to promote the same aims in circumstances where this would often not be possible without them.

During the last weeks we have seen an intensive discussion activity about the social dimensions of these global supply chains. Once again, we have been reminded of the bad and dangerous conditions of many workers who produce apparel and other goods for the world markets and consumers.  This public discussion with all its excesses has been useful and important for raising awareness among both those directly concerned and the general public.

And yes, there have also been excesses and ill-advised attacks, which have not necessarily contributed to build confidence for joint work to support concrete changes and improvements. We should still understand the frustration that drives also those who rightly feel that many safety risks should have been addressed much earlier. Clearly, there is scepticism also about the real preparedness of large buyers to participate, and to accept that their purchasing prices may be affected.

Now is the time to move on from this discussion. Positions have been established and opinions registered. Unless all focus on concrete action now, the supply chain workers and their families will not see improvements in their conditions. All who want to engage themselves in real ways  must now talk and work together, however differently they see the larger picture.

Brands and retailers, corporate social responsibility schemes or initiatives, global or national trade unions, non-governmental organisations, public sector authorities and institutions, suppliers and traders – they and others must now come together. Concrete projects and other action is needed.  Only a broad and powerful coalition can make a real difference for the workers who are concerned.

There are already things that have been done, which are useful when developing a comprehensive programme. Buyer companies have developed awareness raising and training materials, and already engaged in important capacity building efforts, such as French multinational Carrefour and Swedish apparel giant H&M. Others have developed their own projects and budgeted important funds for them, one of the public examples being the US based garment company GAP. All these companies have longstanding commitments to social supply chain responsibility and much experience of dealing with these issues.

An important part should also be that of the initiative which campaigner and advocacy organisations –  the Clean Clothes Campaign, the International Labor Rights Forum ILRF, the Workers Rights Consortium WRC and the Maquila Solidarity Network –  have launched last year in Bangladesh. With union and NGO support and commitment to participate by two large companies that also have solid social responsibility track records – US-based PVH and German Tchibo – they have developed a concept that is really worth a close look when developing any approaches also on a broader basis.

If a broader coalition can come together very soon – as I think it will – care should be taken that it can provide also a platform for a multitude of individual projects which are well aligned with all other activities. This civil society driven project should be one of these, and it should be in common interest to ensure that it then gets the necessary backing to be launched. The owners of this project should also see the benefit in this and be prepared to work as a part of a larger effort to ensure real and significant results.

Some key considerations when building a broad and common approach should be :

  1. Governments in the countries concerned must act to secure and effectively enforce safety regulations in all workplaces, not only those that work for the export sector.  There is also much work needed to combat corruption, which has a big negative influence both on fire safety conditions and on dealing with catastrophes when they happen.
  2. Individual suppliers and their industry federations must understand that demands on securing worker safety are serious and have to be acted on if they want to continue their business relations and role in global supply chains. They cannot only hide behind allegations that pressure on prices and supply conditions by international buyers push them to ignore safety considerations when building and operating factories. Even if this indeed is an important factor, it is far from the only reason for unacceptable conditions.
  3. Brands and retailers, traders and others who are engaged in global supply chains and who benefit from the work done in these factories and other workplaces have to carry their part of the responsibility, also when it comes to economic issues. Prices and other supply conditions must be on a level that allows for safe working conditions to be established and upheld, and respects the human right of supply chain workers and their families to live their lives in dignity. Here, buyers cannot hide behind anti-trust regulations and the authorities in the developed world have to accept that a level playing field may be one of the necessary conditions for dealing with this issue. This time, the economic dimension will be important, the fire safety situation will require also many structural and construction changes that will cost a lot of money. Part of this has to be carried by international buyers and the end consumers in the developed world.
  4. Campaigners and trade unions must take care that they do not use these issues as a vehicle for promoting other aims and objectives, however urgent they may be seen. They have to be prepared and able to work side by side also with companies whom they may have fundamental differences with when it comes to other parts of labour relations or their conceived social and environmental behaviour.  There is a job to be done here, and if the business sector is now prepared to act strongly and concretely, campaigners and unions should support rather than question it, and accept that everyone will have to make compromises along the road to secure that the main aim is achieved.

At the end of the day, successes and failures will be measured on how effectively changes are put in place locally. This means that relations between employers and workers have to be developed as well. Without a worker empowerment which normally takes place through trade union organising and social dialogue, credible workplace action and controls can become impossible. In addition to employers and unions themselves, the corporate social responsibility schemes and initiatives must consider taking a step further from a passive recognition of freedom of association and the right to collective bargaining and work for active worker empowerment to be included as part of their codes and standards, in addition to being raised in capacity building and remediation.