Bangladesh: Will Good Corporate Deeds Go Unpunished?

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

RICHARD LEVICK

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.

After Bangladesh, labor unions can save lives

LANCE COMPA

The factory collapse in Bangladesh that killed more than 1,100 workers should be a pivot point for the global apparel industry, moving consumers to demand more accountability from brand-name companies that subcontract production to supply-chain factories around the world. Sadly, the history of workplace tragedies in so many of these factories suggests that after consumers in rich countries express horror and call for reforms, the demands for better worker protections die down and the marketplace for cheap apparel abides. But this cycle can finally be broken if demands for change start to focus on workers’ right to form trade unions.

In the wake of labor abuses and workplace tragedies exposed in the 1990s, many apparel brands created in-house social compliance functions and joined “multi-stakeholder groups” with detailed monitoring and certification programs. But the one-day visits and checklist-style monitoring routine in such efforts have not worked.

This is where workers’ organizing comes in. Social compliance monitors might visit once a year. Government inspectors might come once in 10 years from understaffed and underfunded labor ministries common to most developing countries. But a real trade union can provide the vigilance and voice that workers need for sustained decency at their place of employment, including a workplace that is not a death trap.

In Bangladesh and many other countries, the challenge is getting real unions. Factory managers routinely fire and blacklist workers thought to be union sympathizers. And sometimes worse: In April 2012, apparel union organizer Aminul Islam was found tortured and killed after meeting with workers near a garment manufacturing center outside Dhaka. The crime remains unsolved.

In China and Vietnam, the official labor movement is a branch of government. Unions exist, but the plant personnel director is often the union president, and the unions’ role is to boost production, not to defend workers. Widespread phony unions in Mexico insulate factory owners against the few authentic unions that manage to survive. In many countries, owners often shut down newly organized factories to warn workers away from unions.

Despite these challenges, apparel unions have a toehold in Central America and in other regions and countries, including Bangladesh. But a toehold is not enough to shift the balance of power. Without effective unions, trying to tackle fire safety, living wages, child labor and other problems is a Sisyphean job.

To change the balance of power, consumer pressure, government policies, international labor solidarity, new management policies and other support mechanisms must focus on workers’ organizing and bargaining rights.

One model is taking shape in Honduras. In 2009, responding to U.S. student protests of the closure of newly organized plant, allegedly for anti-union reasons, Fruit of the Loom’s top management committed to honoring workers’ organizing rights. The Kentucky-based company reopened the factory where the union dispute arose, rehired all employees, recognized the union and entered into good-faith bargaining. Now the renamed “New Day” facility has a collective bargaining agreement with higher wages, better conditions, and a strong health and safety committee. Workers have maintained high productivity levels, and the company has added employees.

Fruit of the Loom management told workers in other Honduran factories that they too have a right to organize and that the company will respect their choices. An innovative nonprofit oversight committee coordinated by the nonprofit Global Works Foundation — which asked me to join as ombudsman — is helping nurture positive labor relations in plants. The committee, whose members are chosen by management and the union, provides training programs on freedom of association and collective bargaining. It also helps mediate workplace grievances.

Since the oversight committee established its program, workers have formed genuine unions with the General Confederation of Labour — known as CGT — in other Fruit of the Loom factories with almost 5,000 employees overall. It is the world’s first sustained, companywide independent union organizing in the apparel manufacturing sector.

A stereotype holds that young workers desperate for jobs at any salary will never turn to unions. Some also peddle the “sweatshops are good” argument, saying that they are better than any alternative and that unions would only make factories uncompetitive. But workers belie such typecasting. In China and Vietnam, shop-floor leaders organize strikes and other actions by going around clueless official unions. Given a fair chance, independent unions in Mexico supplant “protection unions” previously chosen by management. The CGT’s success in Fruit of the Loom plants has led to a coordinating group of unions throughout Central America aiming to persuade more firms to respect their organizing rights.

Another stereotype — in many cases all too accurate — has apparel factory owners and managers demonizing unions and taking unbridled reprisals when workers try to organize. The Fruit of the Loom-CGT model in Honduras sends a strong signal to apparel brands and factory owners that companies and real unions can not just coexist but thrive in a globally competitive environment. More important, in light of the recent tragedies in Bangladesh, real unions defending employees inside the workplace can save lives.

First appeared in The Washington Post, May 27, 2013

Lance Compa teaches international labor law at Cornell University’s School of Industrial and Labor Relations