The Right to Garment: Crisis and Corporate Social Responsibility in the Rana Plaza Factory Collapse ‘13

The Right to Garment: Crisis and Corporate Social Responsibility in the Rana Plaza Factory Collapse ‘13

Gabriela Corbera (The Heller School for Social Policy and Management, USA)
DOI: 10.4018/978-1-7998-1859-5.ch016

Abstract

The Rana Plaza Collapse in 2013 in Dhaka, Bangladesh offers lessons in the garment industry on ethics, corporate leadership, and corporate social responsibility crisis. Given the circumstances of 1,134 workers deceased from its factory collapse in 2013, this chapter aims to inform the response in CSR Crisis in the garment sector of three major fast fashion companies. It also positions the most current labour standards in the ready-made garment industry in Bangladesh. This chapter draws on literature in management and economics on informing the connections in labour and industrial growth. The chapter aims to shed light on other alternatives fashion companies can take in supporting ethical responses and practices in supply chain management. It then offers a variety of business/human rights recommendations in public policy for the Republic of Bangladesh.
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Introduction

On Wednesday, April 2013, the Rana Plaza located in Dhaka, Bangladesh collapsed with over 1.134 garment workers who were instantly killed (Safi and Rushe, 2018). Through poor compliance and building safety, the Rana Plaza building--Savar building--collapsed reflecting the worst crises of the apparel industry (Bain, 2015a). The fall of the Rana Plaza brought wide attention to the corporate world, consumers, and the working lives of garment workers around the world. Some of the major global brands involved in factory ownership in Dhaka, Bangladesh were H&M, Primark, Zara, Benetton Group and Gap. This incident sets important questions in management. Some of the questions Rana Plaza raises are: What are some of the ways corporations/multinational apparel companies can respond to crisis? What intentions do they have in responding to crisis? How do partnerships develop with civil society and the national government in an industrial crisis that requires a multi-stakeholder approach? Furthermore, the Rana Plaza crisis prompts a question on what might be some of the limitations in crisis response?

Throughout this chapter, these questions are explored through three different case studies. A case study methodology is used in this article to understand the different ways in which management and crisis are understood. By comparing and contrasting the different responses of three multinational apparel companies, some understandings can be created on the textile sector. The companies selected are all in fast fashion, and had some production activity in Rana Plaza. All companies in the case studies are part of fast fashion, a rapid market that is low cost and that employs millions of garment workers across the Global South. Figures are presented on the changes in wages in Bangladesh, the collaborative response through the Rana Plaza Fund, and the trajectory of the Bangladesh Accord to its most present architecture in labor rights. Before going into the crisis of Rana Plaza, a description of the movement of CSR and business ethics is discussed for the sake of this paper.

In the apparel industry, global brands have stepped forward in signing onto new standards and compliances towards creating ethical fashion (Bain, 2015b). This chapter aims to illustrate the ethical management and corporate social responsibility (CSR) response of three multinational apparel companies that held manufacturing activities in Dhaka, Bangladesh. Corporate social responsibility is defined by the United Nations Industrial Development Organization on its website as:

“A management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders…. A way through which a company achieves a balance of economic, environmental, and social imperatives.”

This definition was selected for its all-encompassing dimensions to corporate social responsibility. It was also selected in this paper for its support in a triple bottom line approach to industrial growth whereby different dimensions are looked up in management towards tackling societal issues with concern towards the ways in which business interacts with three dimensions discussed1. According to Christopher Avery (2019), the Director of the Business and Human Rights Resource Centre, going beyond the standard definition of CSR can lead to different goals. Avery suggests there to be differences between a human rights approach v. a traditional CSR approach; “it’s about adopting a human rights framework” (Avery, 2019). In this paper, different levels of participation to CSR as discussed among the three case studies. Drawing upon these classic definitions, practices in management and CSR are helpful in comparing the different corporate responses to Rana Plaza.

In “The Right to Garment,” we also position discussions in these companies’ supply chain management. In this chapter, supply chain management is defined as uses the Poole College of Management “the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage” (Supply Chain Resource Collaborative, 2017). According to the Poole College of Management:

“It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective & efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities.” (Supply Chain Resource Collaborative, 2017)

Key Terms in this Chapter

Regenerative Fashion: Refers to the contribution and changes in the fashion industry upon a desire to recycle and use more sustainable fibers and materials.

Subjects of Labor: Refers to the people who are responsible in advancing an industrial means of production or activity. Subject is used to raise attention to the activator of the industrial activity.

Readymade Garment (RMG) Industry: The readymade garment industry refers to the garment sector in Bangladesh. The term is used in Bangladesh government and national development in describing one of the country’s largest export industries and activities.

Garment Supply Chain: The garment supply chain refers to the multi-stakeholder supply chain of the garment industry from factory divisions to packaging to corporate activities in headquarters for apparel companies.

Labor of Production: Refers to Marx and Engels concept of understanding that there is a correlation of interwoven relations between land, capital, enterprise, and labor.

2018 Transition Accord: The accord refers to the transitional agreement that was in-acted in 2018 after the expiration of the five-year agreement of the Bangladesh Accord.

Business Ethics: Referring to the morality and the executive decisions that reflect the culture and beliefs of a company towards its labor force, human capital, and ethical challenges.

Bangladesh Accord on Environment and Workers’ Safety: This accord was the first international binding agreement across apparel companies former after the 2013 factory collapse in the Savar building in Dhaka to bring global apparel companies together for better and safer working conditions.

Rana Plaza Donors Trust Fund: The donors trust fund refers to a fund that was set up after the 2013 factory collapse of the Savar Building in Dhaka to extend remediation to workers.

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