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Article

8 Oct 2020

Author:
Zobaida Khan

Commentary: Restructuring MSIs to Improve Social Compliance in Supply Industries

After the devastating and avoidable collapse of the Rana Plaza in 2013 in Bangladesh, two innovative multi-stakeholder initiatives (MSIs) emerged: the Alliance for Bangladesh Worker Safety (“Alliance”) and the Bangladesh Accord on Building and Fire Safety (“Accord”)...

Moving beyond voluntary codes of conduct and “Do No Harm” policies, these MSIs introduced significant institutional changes in corporate responsibility. They included stronger sourcing policy, improved safety of factory premises, and public reporting of corporate compliance. Indeed, unlike traditional international standard-setting MSIs, the Accord’s terms were legally binding between brands and trade unions. This is the first time an MSI allowed legal enforcement of its provisions and obligations in a transnational labor regulatory setting. Although the terms of both programs have ended, these MSIs attempted to address the regulatory deficiencies created or overlooked by the national government and the supplier factories...

[A]cademic and policy debates are focusing on MSIs’ structural and functional effectiveness and the possibility of restructuring these to deliver social justice oriented results:

  1. How could MSIs be more inclusive in their formation?
  2. How could MSIs lead to long-lasting influence on corporate sourcing policies and improvement of work conditions and entitlements?

Although these issues appear separate, I argue that to properly address diverse compliance challenges in supply chains, there needs to be a coherent and connected restructuring of MSIs that both strengthens their participatory mechanisms and influences the transformation of our liberal market system’s dominant business model...

MSIs regulating supply chains need to focus on transitioning towards a better business model (by participating brands of MSIs) and a better employment model (at producer/supplier companies)...

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