Thursday, August 15, 2013

Bangladesh: Will Good Corporate Deeds Go Unpunished?

Garments workers, union activists protest unsafe workplace in front of garments owners association in Bangladesh capital

In the aftermath of horrific tragedy, you’d think any efforts to lessen the chance of recurrence would be welcome, especially efforts fueled by significant corporate resources.

No doubt the U.S.-based retailers,  including Walmart, Target, and Sears, that signed on to the Alliance for Bangladesh Worker Safety were realistic enough to expect some criticism of  their binding, five-year undertaking to improve labor conditions after April’s Rana Plaza building collapse in which 1,100 people died. (A fire in another factory killed 112 Bangladeshis in November.)

What they may not have expected, or even currently understand, is that by signing on, these companies have provided their adversaries, spearheaded by organized labor, with a potent weapon to advance a multifaceted anti-corporate strategy of which the situation in Bangladesh is just one part.

Indeed, labor groups like the UNI Global Union went on immediate counterattack, excoriating the agreement as essentially toothless and, for want of third-party monitoring, a “sham.” Meanwhile, in early July, 80 retail companies (only three of them American) signed the Accord on Fire and Building Safety in Bangladesh to fund substantial safety improvements. The refusal of American companies to join the Accord was likewise excoriated, when, for instance, UNI spokespeople claimed that the provisions would only add two or three pennies to the cost of a tee-shirt.

I am persuaded that both labor and management share a heartfelt concern for the victims at Rana Plaza, and that both sides sincerely hope for effective remediation of the unsafe conditions that led to the tragedy. But that is where the comity ends. Labor seeks a united front to attack virtually all human rights issues across the board and around the world. By their lights, that purpose is disserved when Corporate Social Responsibility (CSR) programs reassure the world that global corporations can be powerful agents of humane systemic change.

Post Rana Plaza, unions like UNI – a global federation launched in 2000 with more than 900 affiliated unions and 20 million members in 140 countries – have already achieved two fundamental strategic advantages. First, they have gotten the companies to compete in labor’s ballpark, to acknowledge responsibility, to play defense.

But second, they’ve set up the game so that CSR can be used against the corporations themselves. The signatories to the Alliance for Bangladesh Worker Safety would do well to reread Saul Alinsky, who wrote the book on how to make corporations choke on their own good intentions. As Alinsky says in Rules for Radicals, “Make the enemy live up to its own book of rules. You can kill them with this, for they can no more obey their own rules than the Christian church can live up to Christianity.”

By this code, no specific CSR provision will be good enough because the implicit strategy is to define CSR programs as self-serving, and as mere band aids. At the same time, if corporations do not join initiatives like the Accord on Fire and Building Safety in Bangladesh, it only proves their indifference.

Either way a company like Walmart loses as the balance of power continues to shift. Walmart, for one, has already felt some pain as a result of the unions’ focus on CSR, at least enough to encourage the opposition that they’re on the right track.

In July, two large European pension funds, PGGM and Mn Services, announced they’re no longer investing in Walmart because the company does not adhere to international labor conventions. The operative word is “international.” That’s how Walmart is growing and that’s how unions are growing.

It’s instructive that the funds were reportedly rebuffed by Walmart in their efforts to get the company to adopt International Labour Organizationconventions. Walmart may have left a communications void that union messaging ably filled. Of course global conventions are written for countries, not companies. One pension fund readily acknowledged that fact, but so what? “We only want to invest in companies with those standards,” said the firm’s head of responsible investment.

It’s hard to imagine these pullouts occurring without the union campaigns to create an environment in which companies like Walmart are constantly vulnerable. A May 2013 document by UNI’s Commerce Sector that’s come into our possession sheds further light on the strategic motives driving the Walmart campaign. It underscores Walmart’s plans “to increase its workforce to 3 million over the next five years, which represents a 36 percent increase from the current figure of 2.2 million workers.

The opportunities these numbers suggest are not lost on a labor movement that for years read about nothing except its own attrition. But it is not a kneejerk reaction to just one corporate spreadsheet. Globalization is organized labor’s strategic driver simply because that’s where the headcounts are.

From a historical standpoint, the targeting of Walmart feeds into a five-year plan formalized at UNI’s 2010 World Congress in Nagasaki. This time frame coincides tellingly with the accelerated controversy surrounding Walmart’s labor practices as well as the series of workplace tragedies of which Rana Plaza will sadly not be the last.

The anti-Walmart activities typify how the Nagasaki principles are being carried out in action. Among the interminable highlights in the UNI Commerce document: the 2012 launch of the UNI Walmart Global Union Alliance; the first-ever cross-union strike in Brazil; extremely aggressive use of “Twinning” via phone and skype for Walmart employees to communicate around the world; and a concerted use of social media with new communities like the Walmart Alliance Facebook Page.

Beyond tactics, the UNI Commerce document provides three crucial strategic takeaways for any company that is or will be intensively targeted.

First, the unions aren’t fighting guerilla war. They’re waging sustainable combat. If corporations want to fight back, they too must think long-term even while extinguishing whatever brush fires flare up on a daily basis. What, for example, is the long-term viability of a CSR plan? How do companies advance and build on the plan even as they fully anticipate that the unions will use whatever they do against them?

Second, the campaigns go well beyond specific labor issues. CSR is an open invitation to be judged by multiple tribunals focused on everything under the sun from antitrust to environmental. If a company wants to subsidize green construction projects, the union might want to know where it stands on Ecuadorian rainforests.

Accordingly, the UNI Commerce actions points include, for example, research into corruption. (Earlier this year, the union held a public hearing in El Salvador on the Foreign Corrupt Practices Act, specifically to encourage whistleblowers to come forward.) Everything is at play. In a document for a campaign targeting the leading global hotel chains, the union even wants to know revenue figures on in-room pay-per-view pornography.

Third, the unions have taken the fight inside the corporation. Their strategy plays out at shareholder meetings in the now-familiar form of investor activism. No wonder the UNI Commerce document specifically calls for “international delegations to attend annual shareholder meetings.”

An earlier (2004) UNI planning document that also came into our possession discloses the breadth of the campaign to influence both corporate governance and CSR at public companies. According to this document, the corporate governance “crisis takes unions closer into corporate power issues than ever before. It also sharpens ongoing CSR opportunities…. It makes possible…influential linkages between shareholders and other stakeholders – primarily workers and their unions. It widens “the agenda of workers’ participation in management…taking the unions’ public voice on environmental and broad social issues closer to the doors of corporate power” [both emphases added].

Rainforests, corruption, pornography – we’re a long way from Bangladesh and worker safety. Yet it’s been the genius of the labor movement to gather its diverse allies and spin just such a comprehensively interwoven net in which every knot is a potential focal point. They had to, in order to survive as an organized antagonist in the ongoing war of labor and management – a survival they see as essential for both humanitarian and business reasons.
In turn, corporations must be equally holistic, looking around and beyond every corner to identify issues that will shadow their brands and reputations in the years ahead. They cannot just build a fortress on the labor/employment front. In this global confrontation, not a single social, political, or legal issue is unimportant.

Their intent of the Alliance for Bangladesh Worker Safety and the Accord on Fire and Building Safety in Bangladesh is noble, and the efforts they make will likely directly benefit those for whom they’re intended. If so, there is all the more reason for these corporations to carefully think through the unintended consequences – and the real possibility that every conversation about social problems will turn into a shouting match only the enemy can win.

First appeared in Forbes, August 12, 2013

Richard Levick, Esq., Chairman and CEO of LEVICK, provides public relations and communications counsel to corporations and countries on multiple labor and human rights issues. Mr. Levick was honored for the past four years on NACD Directorship’s list of “The 100 Most Influential People in the Boardroom,” and has been named to multiple professional Halls of Fame for lifetime achievement. He is the co-author of three books, including The Communicators: Leadership in the Age of Crisis, and is a regular commentator on television, in print, and on the most widely read business blogs.