Who Signs up for Workers Safety? Private Governance and Firm Strategies in Interna=onal Supply Chains

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Ruby Fleming
5 years ago
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1 Who Signs up for Workers Safety? Private Governance and Firm Strategies in Interna=onal Supply Chains John S. Ahlquist UCSD Layna Mosley UNC

2 Global Supply Chains (tex=les)

3 Private Governance A means of improving labor standards in supplier and subcontractor firms? Lead firms link compliance with access to contracts Lead firm incen=ves to avoid reputa=onal risk vis-a-vis consumers and shareholders Perhaps in conjunc=on with local labor unions, local employers and IGOs (e.g. ILO/World Bank BeUer Work Program) But private governance may work best in conjunc=on with public sector pressures Role of host country governments (Locke 2013) Need for involvement of government labor inspectors (Amengual and Chirot 2016)

4 Bangladesh in the Global RMG Sector $US millions percent of exports percent of GDP Bangladeshi textile exports MFA expires Rana Plaza BGD second largest tex=le exporter in the world (2011; McKinsey) RMG accounts for >85% of export earnings (UNCTAD) BDG RMG sector employs over 4 million people, mostly young women

5 Tazreen fire 2012 Tazreen Fashion factory producing for numerous Western brands including WalMart 24 November 2012 fire 117 dead, 200 injured No fire escapes; windows inadequate and exits padlocked from the outside

Rana Plaza 2013 24 April 2013 8-story factory collapses 1129 dead, ~2500 injured Cracks no=ced in building but workers told to return to work or lose a month s pay Worst garment

6 Rana Plaza April story factory collapses 1129 dead, ~2500 injured Cracks no=ced in building but workers told to return to work or lose a month s pay Worst garment factory accident ever. Worst structural failure in recent memory. Construc=on well beyond permiued capacity, etc. Owner has =es to ruling party. Factories producing for BeneUon, WalMart, etc.

7 Private Governance to the rescue? Interna=onal brands auempt to develop private remedia=on plan for safety improvements in Bangladeshi RMG factories Unique among private efforts: focused on one country and one sector. Brands unable to coordinate on a single plan. Accord Largely supported by European brands and retailers Developed in conjunc=on with ILO and local labor groups Alliance Largely supported by major American brands and retailers Worries about legal liability implied by Accord Both Accord and Alliance conduct mul=ple factory inspec=ons and reports; many factories have been blackballed from both for noncompliance and substandard fire and building safety

8 Our project Why do firms compe=ng in the same industry react differently to these challenges? Iden=fy predictors of signing on to the Accord, Alliance, or neither. How does sourcing behavior change, if at all, aler Rana Plaza and/or Accord & Alliance? Can we iden=fy the universe of firms impor=ng from BGD into the USA?

9 Our strategy US customs data to iden=fy shipments of apparel and tex=les Bills of lading indicate produc=on site, contents, weight, US recipient Caveats Some US recipients are logis=cs firms, retailers Shippers have op=on of keeping bill of lading info confiden=al Iden=fy all shipments from BGD, Import Genius data

10 Search terms Apparel Bathing short Bathing suit Baby cloth* Bedspread Bikini Blazer Blouse Bodyshaper Bra Breeches Briefs Cardigan Clothing Clothe* Coat CoUon Sheet CuloUe Denim Dress Duvet Fabric Glove Handkerchief Hosiery Jacket Jean* Jumper Jumpsuit Knit Leisurewear Lingerie Loungewear Man-made fib* Manmade fib* MiUen Neckwear xnightwear Outerwear Pajama Pants Pantyhose Pillowcase PJ Playsuit Polo Pullover Pyjama Quilt Robe Sheets Shirt Shorts Skort Silk Sleepwear Sleeved Sportswear Sock Stocking Sunsuit Sweater Sweatshirt Swimsuit Swimwear Suit T-shirt T shirt Tex=le Ties Towel Tracksuit Trouser Underwear Uniform Workwear Woven Yarns

11 Some preliminary results (i.e. we do have some data) USA monthly apparel import volume from Bangladesh Kg (millions) Rana Plaza

12 Some preliminary results (i.e. we do have some data) USA monthly apparel import volume from Bangladesh Rana Plaza Kg (millions) Neither known Alliance known Accord Mar 13 Jul 13 Nov 13 Mar 14 Jul 14 Nov 14 Mar 15 Jul 15

13 Which firms sign on? (many grains of salt here)

14 Conclusions Appears to be some promise to using BoL data. No obvious, immediate effect of RP disaster/accord/ Alliance on BGD >USA tex=le shipment volume A lot of tex=le orders appear to be from nonsignatories to either Accord or Alliance Serious limits to private governance response (?) Preliminary findings: companies with direct consumer/brand exposure or public financial exposure more likely to sign on to at least one remedia=on program Importers with American HQ more interested in Alliance than Accord.

CONTACT : COMPANY INTRODUCTION

CONTACT : COMPANY INTRODUCTION =========================================================== BONAMI BD. Global Fashion is the renowned garments Exporter, Manufacturer & Global sourcing company based in Bangladesh. CONTACT : Phone : +8801874-535340,Whats'app:+8801716-331122,E-mail:info@bonamibd.com/bonamibd@gmail.com