In the wake of the recent Bangladesh factory collapse, there is an opportunity to tackle wide-ranging deficiencies in global corporate culture, says Toby Webb
The tragedy at Rana Plaza in Bangladesh, where more than 1,100 workers perished in a factory collapse, has revealed the harsh reality of globalisation for some. Yes, the garment industry has created millions of jobs in Bangladesh. But equally its sudden growth has led to an almost complete lack of enforcement of building regulations and structural inspections.
I won’t pretend to be an expert on the garment industry, on factory construction or on Bangladesh and its governance. But one thing has become clear: brands are under pressure to “do something”.
The Accord on Fire and Building Safety in Bangladesh has been one result so far. NGOs such as the Clean Clothes Campaign claim it’s a “binding programme of fire and building safety reforms based on independent inspections, worker-led health and safety committees and union access to factories”.
Companies that have signed up so far include H&M, Inditex, C&A, PVH, Tchibo, Tesco, Marks & Spencer, Primark, El Corte Inglés, and many others. Gap and Wal-Mart are attracting the ire of campaigners for refusing to sign up for legal reasons or “going it alone” in Wal-Mart’s case.
This collaborative initiative among clothing brands on a corporate responsibility issue is not the first. The Ethical Trading Initiative and its strong base code and learning mandate go back to 1998. The Sustainable Apparel Coalition has done much to help brands commit to phase out toxic chemicals by 2020. The Fair Labour Association is now into electronics and cocoa, beyond clothes.
All these are admirable attempts at tackling complex problems. But large companies facing challenges in their value chains need to become more ambitious. As professionals in the field have specialised, so have the company working groups and initiatives. This is largely a good thing. Many sustainability issues are technical; others require deeply tailored solutions, and specialisation is necessary.
But we must not lose sight of the big picture. Not all corporate responsibility problems are in R&D or design. Some, like the root causes of the tragic incident at Rana Plaza, are governance challenges. Other severe problems, such as bribery and corruption, are also macro-governance issues that, while they can be tackled locally, require bigger picture solutions too.
Enter the global fund for business and human rights. Or the global fund for responsible business. Call it what you want, it’s sorely needed.
One function of the fund would be to fill a gap and target specific areas where funding is weak. For example, the training of institutions in emerging economies is often an area where expertise is lacking.
Building inspections, health and safety legal enforcement, and customs reform are all neglected areas for aid and development funding, yet vitally important in encouraging better, legal trade.
Companies are now banding together to begin to try to tackle systemic issues in their specific industries. But why not have a fund that is contributed to by large companies that want to solve some of the messy problems that contribute to tragedies such as the Rana Plaza building collapse?
Here’s how it could work.
A fund is set up and governed by an independent board of individuals whose reputations and motivations are beyond question. Part of the fund’s mission would be to run training, capacity building and monitoring programmes for vitally important areas (customs reform, buildings and health and safety inspection) and offer public reporting and monitoring in return for funds from business, development agencies and others.
This structure, open for debate, challenge and discussion, could allow companies to fund important training and capacity-building challenges without having direct decision-making control over which tranches of money go where. This helps eliminate the “corporate colonialist” barrier to taking effective action on institutional capacity issues, which rightly strikes fear in the heart of so many chief executives.
Of course, one key element would be making a difference that development funds have not been able to. There’s plenty of money going to waste already. But in focused areas, such as technical inspections or customs reform, business inputs, carefully managed, can surely make a difference.
The fund would not be easily managed. It would suffer attacks from both business lobby groups and campaigning NGOs. Setting it up may be a job for a brave business association, such as the WBCSD professes to be. I’ll be exploring the idea more in future blog posts at tobywebb.blogspot.com.
Toby Webb is founder of Ethical Corporation and Stakeholder Intelligence.global fund Human rights labour supply chain Toby Webb