The Necessary Demise of Corporate Social Responsibility (and the rise of accountability)

Abstract

As we know, efforts by global brands to maximise productivity and reduce costs, including labour, and taxation in their supply chains has put considerable pressure on wages and working conditions in their supply chains, particularly in labour-intensive sectors. Cost pressures mean that supply-chain related employment often involves poor working conditions and frequent rights violations. Brands in some cases are also able to source goods and services easily from another manufacturer in the same country or from even less costly and less regulated countries, putting further pressure on manufacturers and service providers to cut costs to the bone. Fast production schedules at cut rates remain the norm, making labour violations inevitable. Of course, governments have been reluctant or unwilling to enforce labour laws for fear of losing investors. Though some companies have made public commitments to establish long term relationships with core suppliers, to pay an adequate price for the products that will allow the payment of living wages, long-term contracts, and investment in safe and secure workplace, this is by no means the norm. In June 2016, decades overdue, the tripartite constituents of the International Labour Organsiation (ILO) held its first general discussion on the question of decent work in global supply chains at the annual International Labour Conference. The discussion was forced onto the agenda in the aftermath of the industrial disaster in Bangladesh in 2013, when over 1100 workers died as the shabbily built Rana Plaza building predictably collapsed. Indeed, workers had warned management about the cracks weakening the building’s foundation but were forced back to work. The factories operating in that building were at the time producing garments for several major global garment brands which had long taken advantage of the near total absence of trade unions and collective bargaining agreements in the garment sector and a government all too willing to ignore violations of the labour law in order to attract and maintain foreign investment. And these brands also touted codes of conduct including protections for workers’ rights. Several brands souring from Bangladesh, and indeed from around the world, proudly tout corporate codes of conduct which purportedly commit them to respect fundamental labour rights in their supply chains. Some brands also participate in multi-stakeholder monitoring and auditing initiatives. These private governance initiatives have repeatedly failed to safeguard workers’ rights, with the disasters at Rana Plaza and Ali Enterprises in Pakistan being only the most visible. Indeed, the official report prepared by the ILO for the general discussion on global supply chains noted in several paragraphs the failure of private CSR initiatives to protect the fundamental rights of workers. First, the ILO raised concerns with regard to training and monitoring methodology, finding: ‘While corporate social responsibility (CSR) could promote the principles of freedom of association and collective bargaining in global supply chains, there have been significant flaws in social monitoring. Social auditors are generally not adequately trained on this technical area, nor can the quality of industrial relations be measured by purely quantitative indicators ‘.1 The report went on to state: ‘[E]ven when enabling rights are clearly included in codes, they are difficult to measure and monitor, and private social audits often fail to detect violations of non-discrimination or freedom of association and the right to collective bargaining ‘.2 The ILO also raised concerns with the lack of accountability that are common in private initiatives, finding that: ‘Another concern is that private initiatives lack accountability, since they often do not contain inclusive processes which encourage worker participation or public disclosure of information. Frequently, workers are not involved in the design of the PCI, and may lack an opportunity to validate or comment on reports, or influence decision-making processes. When audits take place, non-standard and contract workers are often not consulted, or they are reluctant to raise concerns for fear of losing their jobs ‘.3 These observations have been made repeatedly by trade unions, NGOs and academics over several years - namely that private initiatives are often simply not fit for purpose and should certainly not stand in for or distract from effective public governance4. It is important that these critical observations now have the imprimatur of the ILO. At...