My column from the June edition of Ethical Corporation on business and human rights and the need for a global fund

1. Columnist: Toby Webb50
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 enforce-
ment 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 difficult 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.
Governance challenges
But we must not lose sight of the big
picture. Not all corporate responsi-
bility 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. I
Toby Webb is founder of Ethical Corporation and
Stakeholder Intelligence.
Business and human rights
Time for a global fund
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
Demand for cheap clothing ain't going away
Health and
safety legal
enforcement is a
neglected area
for development
funding
COLUMNIST:
TOBY WEBB
ISTOCKPHOTO/THINKSTOCK
Ethical Corporation • June 2013