CSR (Esp. In the Garment Sector)

In recent years, a number of garment factory fires and building collapses have taken place in countries where the statutory provision of workers’ compensation for death and injury at work is weak or non-existent. In response to these disasters, industry stakeholders have developed innovative new schemes to award compensation to injured workers and the families of those killed, consistent with international standards for compensating occupational death or injury. This report compares three major compensation schemes of this kind: the Rana Plaza Arrangement, the Tazreen Claims Administration Trust, and the Ali Enterprises compensation arrangement. It draws out guiding principles, lessons learned, and best practices for workers’ compensation for death or injury in global supply chains in the absence of a reliable, rights-based national employment injury insurance system in the producer country. With the commitment and cooperation of industry, government, and civil society, survivors of...

In recent years, a number of garment factory fires and building collapses have taken place in countries where the statutory provision of workers’ compensation for death and injury at work is weak or non-existent. In response to these disasters, industry stakeholders have developed innovative new schemes to award compensation to injured workers and the families of those killed, consistent with international standards for compensating occupational death or injury. This report compares three major compensation schemes of this kind: the Rana Plaza Arrangement, the Tazreen Claims Administration Trust, and the Ali Enterprises compensation arrangement. It draws out guiding principles, lessons learned, and best practices for workers’ compensation for death or injury in global supply chains in the absence of a reliable, rights-based national employment injury insurance system in the producer country. With the commitment and cooperation of industry, government, and civil society, survivors of garment factory disasters can be compensated to internationally recognised standards, even in the absence of a national employment injury insurance system. However, these kinds of post facto compensation schemes should not interfere with the establishment of national employment injury insurance systems in garment-producing countries, and indeed can be used as an opportunity to help develop technical capacity, administrative infrastructure, and political will for such national-level systems.

Despite criticisms of their derivation and implementation, corporate codes of conduct (CoCs) continue to dominate debates on Corporate Social Responsibility and the informal regulation of worker exploitation and abuse by ‘sweatshops’ supplying Northern multinational corporations (MNCs). Through analytical interrogation of existing literature and empirical evidence from Vietnamese case studies, two propositions are made to clarify the poor performance of CoCs. It is argued, firstly, that the extent of the control of MNCs over their subcontracting suppliers is misconceived and overestimated because supply chains function more like networks than the hierarchies assumed by ‘principal-agent’ preconceptions. Conceptualizing such relationships instead as networks of conflicting political and economic imperatives amongst various sets of actors generates a second proposition derived from our case studies. The factory workers, their subcontractor employers, intermediary vendors and even the MNCs seeking CoC commitments, have convergent interests in violating key aspects of the codes and deceiving their auditors. The analysis evaluates the residual value of CoCs in light of these constraints and the options for improving labour regulation, with particular reference to the plight of disadvantaged women workers.

Over the past decades, there has been a growing number of corporate Codes of Conduct (CoC) being developed and introduced by multinational corporations (MNCs) to promote international labour standards in supply chains. This paper examines the implementation of CoC by suppliers in developing countries. A study was carried out at three garment factories in Vietnam that supply products to a number of well-known international
brands. Findings of the research show that there are different levels of compliance with CoC although the three factories are requested to implement the same sets of CoC from similar buyers. The foreign owned factory, which has direct relationships with buyers, complies with most of the standards required in buyers’ CoC while the other two factories, which are
subcontracted by intermediaries, violate the codes and deceive auditors to pass buyers’ audits. Nevertheless, workers working in the factory with high level of compliance do not seem to enjoy better working conditions and benefits than those who work at the non-complying factories. The study also found that in the non-complying factories, there is a high level of
willingness of workers to collaborate with employers to deceive the auditors. The findings of the study raise the question whether CoC imposed by the MNCs practically help workers in developing countries.

Ethical oaths for bankers, economists and managers are increasingly seen as successful instruments to ensure more responsible behaviour. In this article, we reflect on the nature of ethical oaths. Based on John Austin's speech act theory and the work of Emmanuel Levinas, we introduce a performative concept of ethical oaths that is characterised by (1) the existential self-performative of the one I want to be, which is (2) demanded by the public context. Because ethical oaths are (3) structurally threatened by the possibility of infelicity or failure, we stress (4) the behavioural aspect of ethical oaths in economics and business. We conclude that a performative concept of ethical oaths can contribute to more ethical behaviour in economics and business, because the performative involves action and behaviour. At the same time, it becomes clear that a radical new perspective on the nature, function and limitation of oaths is needed.