Legally binding obligations subject to binding arbitration are common in international trade, and the Bangladesh Accord is a major breakthrough as it is the first initiative involving several leading companies in which companies have made detailed and legally binding commitments to implement the protection provisions of international labour law.57 The Standard Arbitration Clauses for Settlement disputes under binding trademark agreements, promote simplified arbitration with a timely timeline that protects impartiality and due process, while avoiding excessive litigation, promoting transparency, reducing cost-burdens, and ensuring final and binding enforcement. Led by international and labour law specialists Lance Compa and Katerina Yiannibas, the clauses are based on key international arbitration rules and existing supply chain agreements negotiated by trade unions, workers` rights NGOs and brands. The agreements are the result of a CMR investigation into Nien Hsing`s factories in Lesotho, which revealed widespread and severe sexual harassment and coercion at the supplier. Off-site interviews with dozens of Nien Hsing workers revealed that managers and supervisors forced many workers to have sex and frequently exposed women to sexual harassment. One worker told the WRC: “Many supervisors demand sexual favours and bribes from potential employees. They promise jobs to workers who still have a trial contract. […] All the women in my department slept with the supervisor. For women, it`s a matter of survival and nothing else. If you say no, you will not get the position or your contract will not be renewed. The WRC recommended that trade unions and women`s groups join forces and conclude binding agreements with brands strong enough to combat this scourge of sexual abuse in the workplace. We called on the brands to enter into negotiations to this effect, which they accepted in their honour. Enforceable brand agreements, or “EBAs,” are initiatives to increase labor rights in the supply chain.
[2] Corporate social responsibility initiatives in the supply chain could hardly solve the problem of labour rights because they did not affect any other actor and were based solely on the will of the brand. EBA replaces them and proposes multi-stakeholder mechanisms. In addition, EBA imposes legally enforceable obligations with which suppliers and brands must comply. Examples of EBA aiming to increase workers` rights in the supply chain include the “Bangladesh Accord on Fire and Building Safety”, signed by 200 brands and Bangladeshi trade unions, which carries out factory inspections and resolves safety and justice complaints; “Arrangements for monitoring between trade unions and employers in supply chain systems”, the objective of which is to provide for binding arbitration for disputes under supply chain agreements; and “Agreements to Combat Gender-Based Violence and Harassment”, which establish a grievance mechanism to prevent gender-based violence and sexual harassment for workers at five major factories in Lesotho. As a first step, we ask for binding agreements that are signed by brands and that apply in the workplaces of their suppliers. The Bangladesh Accord differs from the other two agreements in its legal applicability, which, as Juliane Reinecke and Jimmy Donaghey note, represents “a very important new beginning in the governance of global supply chain labour.” 62 Although unique, it is important to remember that the applicability of the agreement remains new, largely new; There are no precedents, and so many details remain unclear and untested. For example, the 2013 agreement did not specify how the parties concerned should choose an arbitrator, choose the applicable jurisdiction or law, or what should happen if they could not agree. This led to procedural delays in activating the mechanism and led to arbitration under the agreement, which required a lot of time, resources and energy, while remaining relatively opaque.63 And although the scope of the initial arbitration clauses was never fully tested, it already offered options on how to further streamline Agreement-type arbitration, as evidenced by the successor agreement to the 2018 Agreement.A recent publication also provides model clauses to make such dispute settlement more efficient, transparent and cost-conscious, in a manner that respects the rights and interests of different parties.64 Business and Human Rights Resource Centre, Bangladesh: Agreement to continue operations for 281 working days if a transitional agreement is concluded, www.business-humanrights.org/en/latest-news/bangladesh-accord-to-continue-operations-for-281-working-days-as-transition-agreement-is-reached/ (last accessed August 30, 2020). Three of the five factories covered by the “Washington Accord” have collective agreements (CBA) with Fruit of the Loom. Among all the possible policy options to prevent such tragedies from happening again, the Bangladesh Accord on Fire and Building Safety is an example of a tool to achieve such a goal. Recent calls for a similar deal in Pakistan and even for a wage deal show the inspiration the Bangladesh deal provides to workers` rights groups for worker-focused alternatives. Under the agreement, signed by the ILO, lead company KiK, IndustriALL Global Union and the Clean Clothes Campaign, KiK agreed to contribute $5.15 million to finance the compensation scheme, in addition to the one million US dollars it had already provided in emergency funding in December 2012. The Pakistan Sindh Employee Social Security Institution (SESSI), which had also previously given funds to employees for loss of income and medical care, would be a key player in the implementation of the fund and pledged to provide an additional $0.7 million under the deal. These funds, totalling $6.6 million, were deemed sufficient to meet the requirements for loss of income and medical care for fire victims and relatives of the deceased under ILO Convention 121, using a “living wage” proposed by the ILO in the absence of direct records of wage rates?80 How far can enforceable agreements really go, radically change purchasing practices and fully adapt them to human rights? Uneasiness? On the one hand, they have so far done much more than other private initiatives. On the other hand, however, it is also fair to argue that they have only partially succeeded in resolving the supply bottleneck that underlies many of the violations in the globalized clothing supply chains they seek to resolve. Although all the agreements discussed in this chapter have led to specific changes in the behaviour of leading companies that would not have happened otherwise and therefore change (sometimes significantly) conditions in supply chains, it may be easier to involve large companies in more targeted agreements focused on gender-based violence or workplace safety. Security renovations, funded by Article 22 of the Bangladesh Accord and other supply chain compensation fund agreements, make it clear that these agreements can force large companies to hold redistributive events. However, it remains to be seen to what extent enforceable agreements between workers` organizations and leading companies can lead to greater structural and economic changes, such as permanent wage increases.
Similarly negotiated supply chain agreements have been reached between leading workers` organizations and brands in other sectors, such as the Fair Food Program Agreement between the Coalition of Immokalee Workers (CIW) and Florida food retailers and farmers, and the Milk With Dignity Agreement between the Migrant Justice group and dairy retailers and farmers in Vermont and New York. Anner et al. trace the evolution of this strategy in the apparel sector back to the multi-party collective agreements of the early twentieth century, in which large companies agreed to enter into contracts only with suppliers who had entered into an agreement with the union. These so-called “jobber agreements” were negotiated in the mid-twentieth century by the International Ladies Garment Workers Union (ILGWU) with the predecessors of today`s clothing brands in New York, when clothing supply chains still had a national character.25 However, this strategy of entering into contractual agreements between workers` organizations and brands on one or more issues in a supply chain is also common in the contemporary globalized world. Clothing sector. . . .
