Could Rana Plaza Help Make Labor Standards a Corruption Issue?

In recent years, the private sector has been increasingly responsive to supply chain issues. This is a result of two distinct forces – one related to corruption, and the other related to issues such as human trafficking and child and other labor issues. While the focus on corruption has largely resulted from legislation such as the FCPA and UKBA, interest in labor-related supply chain issues has often been spurred by NGOs, public pressure, and the media.

However, investigations resulting from the Rana Plaza garment factory collapse may change that. On April 24, 2013, over 1,130 people were killed in the building collapse while many employees were making clothing for western companies. While the accident and the resulting public outcry drove some companies to sign accords promising to establish fire and building safety programs, other companies did nothing.

In July of this year, the Bangladesh Anti-Corruption Agency filed charges against 18 people in connection with the disaster, finding that they “grossly breached the building code.” Although bribery may have played a role in the accident — municipal workers were held liable for giving Rana permission to build more floors on top of the existing structure, although they had no authority to do so — the commission’s decision makes no mention of bribery or corruption. Instead, they hold private sector actors accountable directly on the basis of violating local building codes.

Historically, many private sector actors have viewed corruption as high profile cash payments for contracts or other benefits, acts that make them subject to costly liability under laws like the FCPA. Meanwhile, the private sector has often viewed local or international labor and worker safety standards as lacking teeth, with violations subjecting companies only to public scrutiny and potential damage to brand reputation.

Holding private sector representatives accountable for labor and safety practices through an anti-corruption lens may drive companies to find synergies between their labor and corruption due diligence. In addition, if anti-corruption commissions continue to enforce standards surrounding labor issues, compliance and anti-corruption actors and those promoting responsible labor practices may find themselves with mutual agendas. In a world where historically labor and business have not often shared goals, the decision of the Bangladesh Anti-Corruption Commission may give us all more common ground.

Jenna Mace was a Program Officer for the Middle East & North Africa at CIPE.