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Clothing companies must explain production choices in own foreign policy

Interview in the Dutch Financial Times (het Financieel Dagblad)

I'm in Dhaka, Bangladesh, for a development project about liveable wages in the textile sector. Besides fire prevention and the safety of buildings, this is another important subject where progress needs to be made. The official minimum wage in Bangladesh is 37 euros a month - the lowest in all the low wage countries. This is working at poverty level, but the labourers really need their jobs to be able to survive at all.

In recent weeks, there have been many reports about the desperate situation in Bengalese factories after the collapse of the Rana Plaza building and the previous factory fires. The Dutch textile sector, supported by Minister Lilianne Ploumen, is now taking serious steps to help the Bengalese government and suppliers improve their working conditions. Even the activist Schone Kleren Campagne [Clean Clothes Campaign] 'applauds the fast response of the clothing sector' (Financieele Dagblad, 17 May 2013).
Whether this has been a ‘fast response' is debatable. For many years, Dutch companies have been engaged in all kinds of partnerships aimed at improving working conditions in cheap production countries. Through the Fair Wear Foundation, the Business Social Compliance Initiative of Social Accountability International, for example. Some of the affected factories have been visited by auditors from these organisations and received adequate reports.
Despite their good intentions, it is obvious that the work of these organisations is not sufficient. What do the clothing companies themselves do to minimise and mitigate these human rights risks in their supply chain? Most of them have a policy related to corporate social responsibility (CSR), publish an annual CSR report and outsource tricky work in the supply countries to the organisations mentioned above.
CSR is a strong communicative catch-all term that gives the company a friendly image and a CSR manager a busy job. The problem is that the normative endeavour is selectively applied. An example: the CSR manager sends the Bengalese factory manager a list of demands relating to the required safe working conditions with which he must comply. The next day, however, a colleague from the purchase department travels to the same partner to negotiate a minimum price of 5 dollars per pair of jeans.
This example does not represent an integrated approach that a director or executive board of a clothing company has properly considered. Yet the normative, 'soft' side of business is still safely tucked away in a company's communications department and CSR. Why? A reputation can easily be damaged in countries where the risks are high, such as in Bangladesh, where any layman looking at a local factory can see that there's a problem waiting to happen. The same applies to factories in Cambodia, Pakistan, Vietnam and Indonesia.
Why don't the boards of Dutch companies formulate a foreign and human rights policy for the various (developing) countries in which they operate? They have relations with the country, don't they? The bonus of a 'corporate foreign policy', as the World Bank calls this trading form, is that normative and social subjects are integrated in the business strategy and that they are no longer separate from the ‘hard' sides of business.
This doesn't mean that no more buildings will collapse in Bangladesh, but it will hopefully be the prelude to proper consideration at board level of potentially conflicting business interests (bigger profit versus greater chance of violations of human rights). Subsequent measures will be based on that consideration and will better reflect the expectations of all business units, including the partners in international chains. Globalisation demands an integrated approach to the private sector in countries where governments are badly lacking, also due on account of their development phase, in formulating and enforcing laws to protect their citizens.

Irina van der Sluijs is a business and human rights consultant. She is an associate consultant at Berenschot.

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berenschot_fd_kledingbedrijven_buitenlands_beleid

Author
Irina van der Sluijs

Title
Kledingbedrijven moeten in eigen buitenlands beleid keuzen omtrent productie uitleggen. Winst is dat normatieve en maatschappelijke onderwerpen geïntegreerd worden in de bedijfsstrategie.

Source
Het Financieele Dagblad, 23-05-2013

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