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Business and Human Rights - Time for a Global Fund

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

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Business and Human Rights - Time for a Global Fund

  1. 1. Columnist: Toby Webb50The tragedy at Rana Plaza inBangladesh, where more than1,100 workers perished in a factorycollapse, has revealed the harshreality of globalisation for some. Yes,the garment industry has createdmillions of jobs in Bangladesh. Butequally its sudden growth has led toan almost complete lack of enforce-ment of building regulations andstructural inspections.I won’t pretend to be an experton the garment industry, on factoryconstruction or on Bangladesh andits governance. But one thing hasbecome clear: brands are underpressure to “do something”.The Accord on Fire and BuildingSafety in Bangladesh has been oneresult so far. NGOs such as theClean Clothes Campaign claim it’s a“binding programme of fire andbuilding safety reforms based onindependent inspections, worker-ledhealth and safety committees andunion access to factories”.Companies that have signed upso far include H&M, Inditex, C&A,PVH, Tchibo, Tesco, Marks & Spencer,Primark, El Corte Inglés, and manyothers. Gap and Wal-Mart areattracting the ire of campaigners forrefusing to sign up for legal reasonsor “going it alone” in Wal-Mart’s case.This collaborative initiative amongclothing brands on a corporateresponsibility issue is not the first.The Ethical Trading Initiative and itsstrong base code and learningmandate go back to 1998. TheSustainable Apparel Coalition hasdone much to help brands commit tophase out toxic chemicals by 2020. TheFair Labour Association is now intoelectronics and cocoa, beyond clothes.All these are admirable attempts attackling complex problems. But largecompanies facing difficult challengesin their value chains need to becomemore ambitious. As professionals inthe field have specialised, so have thecompany working groups andinitiatives. This is largely a good thing.Many sustainability issues aretechnical; others require deeplytailored solutions, and specialisationis necessary.Governance challengesBut we must not lose sight of the bigpicture. Not all corporate responsi-bility problems are in R&D ordesign. Some, like the root causes ofthe tragic incident at Rana Plaza,are governance challenges. Othersevere problems, such as briberyand corruption, are also macro-governance issues that, while theycan be tackled locally, require biggerpicture solutions too.Enter the global fund for businessand human rights. Or the globalfund for responsible business. Call itwhat you want, it’s sorely needed.One function of the fund wouldbe to fill a gap and target specificareas where funding is weak. Forexample, the training of institutionsin emerging economies is often anarea where expertise is lacking.Building inspections, health andsafety legal enforcement, andcustoms reform are all neglectedareas for aid and developmentfunding, yet vitally important inencouraging better, legal trade.Companies are now bandingtogether to begin to try to tacklesystemic issues in their specificindustries. But why not have a fundthat is contributed to by largecompanies that want to solve someof the messy problems thatcontribute to tragedies such as theRana Plaza building collapse?Here’s how it could work. A fundis set up and governed by anindependent board of individualswhose reputations and motivationsare beyond question. Part of the fund’smission would be to run training,capacity building and monitoringprogrammes for vitally importantareas (customs reform, buildings andhealth and safety inspection) and offerpublic reporting and monitoringin return for funds from business,development agencies and others.This structure, open for debate,challenge and discussion, couldallow companies to fund importanttraining and capacity-buildingchallenges without having directdecision-making control over whichtranches of money go where. Thishelps eliminate the “corporatecolonialist” barrier to taking effectiveaction on institutional capacity issues,which rightly strikes fear in the heartof so many chief executives.Of course, one key elementwould be making a difference thatdevelopment funds have not beenable to. There’s plenty of moneygoing to waste already. But infocused areas, such as technicalinspections or customs reform,business inputs, carefully managed,can surely make a difference.The fund would not be easilymanaged. It would suffer attacksfrom both business lobby groupsand campaigning NGOs. Setting itup may be a job for a brave businessassociation, such as the WBCSDprofesses to be. I’ll be exploring theidea more in future blog posts IToby Webb is founder of Ethical Corporation andStakeholder Intelligence.Business and human rightsTime for a global fundIn the wake of the recent Bangladesh factory collapse, there is anopportunity to tackle wide-ranging deficiencies in global corporateculture, says Toby WebbDemand for cheap clothing aint going awayHealth andsafety legalenforcement is aneglected areafor developmentfundingCOLUMNIST:TOBY WEBBISTOCKPHOTO/THINKSTOCKEthical Corporation • June 2013