University of Essex School of Law

Academic Year 2021-22 Human Rights Centre

Do NOT write your name on the cover sheet or essay

Role of Power and Influence in Stakeholder Expectation of Corporate Social

Responsibility: Case of Bangladesh Accord and the
Accord on Fire and Building Safety
1. Introduction

For over a century, companies have been involved in reporting social and environmental
information to record and report the environmental and social impacts that they hold1. However,
there seems to be a lack of mandatory regulations that enforce companies to be involved in social
responsibility. The motivations of a company to perform corporate social responsibility (CSR) and
to be involved in the disclosure and reporting usually lie in desires like complying with legal
requirements, economic benefits of doing “the right thing”, complying with borrowing
requirements, etc.2. Furthermore, the stakeholders of a company are also responsible for driving the
pat of corporate, social, and environmental responsibility practices 3. This is due to the fact that these
practices lead the company to bear additional costs and benefits leading to striking the interest of
both internal and external stakeholders of a company. In some cases, the attention to CSR can lead
to a reduction of short-term benefits and can cause conflicts between various types of stakeholders
of a company. Hence, in most cases the stakeholders invest in CSR activities only if they perceive a
private gain3, however, some of the stakeholders may also be interested in the production of long-
term sustainable profits and meeting of high health and safety standards in the company so that
human rights are protected, environmental standards are met, and consumer needs are fulfilled4.

In the case of the outsourcing of production from the western countries to the southern and eastern
states that are comparatively cheaper in terms of labor costs and manufacturing, there have been
numerous neglections of social and environmental sustainability and CSR reporting 5. Ever since

1
Chris Brooks and Ioannis Oikonomou, 'The Effects of Environmental, Social and Governance Disclosures and
Performance on Firm Value: A Review of The Literature in Accounting and Finance' (2018) 50 The British Accounting
Review.
2
Zhihong Wang and Joseph Sarkis, 'Corporate Social Responsibility Governance, Outcomes, And Financial
Performance' (2017) 162 Journal of Cleaner Production.
3
Amina Buallay and others, 'Corporate Social Responsibility Disclosure and Firms' Performance in Mediterranean
Countries: A Stakeholders' Perspective' (2020) 15 EuroMed Journal of Business.
4
Zhi Tang and Jintong Tang, 'Stakeholder Corporate Social Responsibility Orientation Congruence, Entrepreneurial
Orientation and Environmental Performance of Chinese Small and Medium‐Sized Enterprises' (2017) 29 British Journal
of Management.
5
Brian Jacobs and Vinod R. Singhal, 'The Effect of The Rana Plaza Disaster on Shareholder Wealth of Retailers:
Implications for Sourcing Strategies and Supply Chain Governance' [2015] SSRN Electronic Journal.
2013, the serious accidents in ready-made garment businesses in Bangladesh are a cause of scrutiny
and debate as more than 1000 workers lost their lives due to the collapse of the Rana Plaza factory
building leaving thousands seriously injured6. The fact that the company building had been audited
by the brand companies using Rhineland TÜV, an organization that words to test, inspect, audit, and
certify, without any sort of indication in the audit report of issues of the building safety led to
upheaval and debate on the ruthlessness and neglect of the parent companies whose work was
outsourced to the locals in Bangladesh7. As a response to the incident, IndustriALL Global
Union and UNI Global Union reached an agreement on building safety and fire prevention
mechanisms with a number of global brand companies that purchased or outsourced their work in
Bangladesh and a few local companies, to ensure the future safety of the workers.

2. Corporate Social Responsibility and its Legal Aspects

During the past few decades, the interest in experiential and analytical theories of CSR has
increased. CSR activities of companies have become more prominent due to the increased social
expectations from global businesses8. Most of the research addresses these activities as voluntary
actions that are undertaken by organizations and are not carried out due to legal obligations, but
instead are responsible for environmental and societal benefits. CSR is referred to as a set of
activities and efforts of a company to reduce the harmful effects of its processes on society and the
environment9. Furthermore, CSR is a tool for accomplishing business activities, contributing to
social problem resolution, achieving societal commitment, improving resource consumption, and
effective distribution of resources10. Therefore, CSR activities can be seen as an effective means to
increase the competitive advantages of a company. Lately, the CSR activities include have been
extended to include moral and ethical engagement with the consumers and employees, i.e., it is
assumed that companies self-regulate their CSR behaviors and openly communicate these activities
to their employees, consumers, and other stakeholders.

6
Jaakko Salminen, 'The Accord on Fire and Building Safety in Bangladesh: A New Paradigm for Limiting Buyers’
Liability in Global Supply Chains?' (2018) 66 The American Journal of Comparative Law.
7
Christian Scheper, 'Labour Networks Under Supply Chain Capitalism: The Politics of The Bangladesh Accord' (2017)
48 Development and Change.
8
Mauricio Andrés Latapí Agudelo, Lára Jóhannsdóttir and Brynhildur Davídsdóttir, 'A Literature Review of The
History and Evolution of Corporate Social Responsibility' (2019) 4 International Journal of Corporate Social
Responsibility.
9
Mallika Tamvada, 'Corporate Social Responsibility and Accountability: A New Theoretical Foundation for Regulating
CSR' (2020) 5 International Journal of Corporate Social Responsibility.
10
Francesco Gangi and others, 'Does Corporate Social Responsibility Help the Survivorship of SMEs and Large Firms?'
(2020) 43 Global Finance Journal.
CSR is a domain of business literature that indicates the impact of business processes on
stakeholders and vice versa. CSR is a strategic tool that responds to the expectations of various
stakeholders involved in a business. Hossain et al. (2016)11 commented that a lack of awareness in
the stakeholder groups involved in a business leads to impacting the embracing of sustainability
development in industry by focusing on the case study of the garment industry in Bangladesh. every
organization has four fundamental responsibilities post office bodies which include economic, legal,
ethical, and philanthropic responsibilities. In the case of the legal front of CSR, a company is
responsible for compliance with its legal obligations. In business law, it is clear that society expects
a business to create profits, all the while abiding by laws and regulations of the government and
authorities of the country or jurisdictions that they are operating under 12. According to various
researchers1314, the social responsibilities of a company are identified in terms of economic,
technical, and legal obligations of the company towards its stakeholders and the surrounding society
and environment. CSR and legality are usually not treated as the same as CSR refers to acts that are
beyond what a company is bound to do by the law15.

3. Stakeholders and CSR

CSR activities are majorly based on stakeholder involvement, as corporate profitability for
stakeholders can be achieved by working towards socially responsible strategies of a company. The
CSR-based managerial systems are balanced by the power and influence of its stakeholders to
create a mix of company interests, conflicts and to create an overall relationship of trust and
commitment between a company and its internal as well as external stakeholders 16. Stakeholders
can be considered to be the shareholders of a company, such as the management and middle
management staff, the state authorities, the local community, national and international society,
humanity as a whole, that are either directly or indirectly affected by the activities of an

11
Md Moazzem Hossain and Manzurul Alam, 'Corporate Social Reporting (CSR) And Stakeholder Accountability in
Bangladesh' (2016) 24 International Journal of Accounting & Information Management.
12
Ann Elizabeth Mayer, 'Human Rights as A Dimension Of CSR: The Blurred Lines Between Legal and Non-Legal
Categories' (2009) 88 Journal of Business Ethics.
13
Franco Rubino and Francesco Napoli, 'What Impact Does Corporate Governance Have on Corporate Environmental
Performances? An Empirical Study of Italian Listed Firms' (2020) 12 Sustainability
14
Franco Ernesto Rubino and others, 'Corporate Governance and Performance: An Analysis of Italian Listed
Companies' (2020) 16 Corporate Board role duties and composition.
15
Lucia Gatti and others, 'Are We Moving Beyond Voluntary CSR? Exploring Theoretical and Managerial Implications
of Mandatory CSR Resulting From The New Indian Companies Act' (2018) 160 Journal of Business Ethics.
16
Josefina Fernández-Guadaño and Jesús Sarria-Pedroza, 'Impact of Corporate Social Responsibility on Value Creation
From A Stakeholder Perspective' (2018) 10 Sustainability.
organization17. Stakeholders can increase their power and influence on a company's CSR activities
if Contractual CSR is used i.e., if some baseline CSR requirements are made part of a contract of
requirements between a stakeholder and the company 18
. Based on the efforts of stakeholders to
reform the corporate and managerial structures, Weisband 19 commented that CSR has the capability
of creating a strong brand identity for a brand by incorporating social values that promote local and
global interests. Jones20 explored the economic and ethical friends of CSR and concluded that the
corporate relations with stakeholders must be established by the use of trust honesty reliability and
ethical behavior as it can lead to high returns and the use of CSR can be directed towards ensuring
that the overall interests of stakeholders are met properly. Moreover, two-way communication is
vital to ensure that the stakeholder expectations are communicated clearly to the organization21.

4. Corporate governance and CSR in Bangladesh

Unlike Western society, the corporate governance structures in eastern countries like Bangladesh
are mostly insider oriented. Ownership control is mostly in the hands of the board of directors and
core investors instead of being divided among the various stakeholders of a company. Moreover,
the founding families have a strong ownership concentration in the business domains, similar to the
political governance structures in the country22. The financing sector in the country, as opposed to
the Anglo-American “market-based” system and is known as the “bank-centred” or “relationship-
based” system23. In the “market-based” system, there is a diffused ownership, and financing is also
carried out by a large number of dispersed investors, making the shareholders the primary owners of
a company. However, in the bank-centred structures of financing, the institutional investors are the
dominant owners, and the financer is usually not involved in any of the company’s activities as a

17
Knut Sinding and others, 'Stakeholder Pressures, CSR Practices, And Business Outcomes In Denmark, Germany And
The Netherlands' (2018) 12 European J. of International Management.
18
Isabel‐María García‐Sánchez, 'Drivers Of The CSR Report Assurance Quality: Credibility And Consistency For
Stakeholder Engagement' (2020) 27 Corporate Social Responsibility and Environmental Management.
19
Edward Weisband, 'The Virtues of Virtue' (2009) 52 American Behavioral Scientist.
20
Thomas M. Jones, Jeffrey S. Harrison and Will Felps, 'How Applying Instrumental Stakeholder Theory Can Provide
Sustainable Competitive Advantage' (2018) 43 Academy of Management Review.
21
Daniela Salvioni and Alex Almici, 'Circular Economy And Stakeholder Engagement Strategy' [2020] Symphonya.
Emerging Issues in Management.
22
Uddin M, Khan M, and Hosen M, 'Does Corporate Governance Influence Leverage Structure In Bangladesh?' (2019)
7 International Journal of Financial Studies
23
Md. Harun Ur Rashid and others, 'Corporate Governance And Banks’ Productivity: Evidence From The Banking
Industry In Bangladesh' (2020) 13 Business Research.
partner, leading to a structure of concentrated ownership2425. The economic activities in the firms of
Bangladesh are mostly based on relationship-based capitalism instead of “rule-based” governance 26.
Moreover, there is a lack of cooperative stakeholder loops in countries like Bangladesh i.e.,
cooperate finance is mostly dependent on financial institutions and banks. Hence, the corporate debt
in these countries is mostly private. This leads to a centralized corporate governance structure in
these countries27. These centralized structures lead to increased power and influence of stakeholders
on the activities of a firm. However, instead of distributed power between various stakeholders as in
Eastern business environments, the companies in Bangladesh are more in control of a select few
more powerful stakeholders.

5. Case Analysis
5.1 What is the Accord on Fire and Building Safety in Bangladesh?

The Accord on Fire and Building Safety in Bangladesh, simply known as the Bangladesh Accord,
was signed on 15 May 20135. Initially, it was signed as a five-year independent plan that was signed
by the trade unions, retailers, global brands, etc., in Bangladesh. This plan was a global framework
work agreement that bound the signees to work towards building a safe and healthy government and
readymade apparel industry in Bangladesh28. This agreement was made in response to the collapse
of Rana Plaza in 2013 that resulted in the death of over 1000 people and injury of over 2000 (see
the next section for further details on the incident). In October 2013, during a conference of the
Bangladesh Accord Foundation in the Netherlands, an implementation plan for the accord was
readied and a final agreement was made29. This agreement can be classified as project-oriented
multistakeholder governance. The major components of this agreement were as followed:

1. It was a five-year legally binding agreement that was held between trade unions and the global
and national brands to ensure a safe working environment in the Bangladeshi readymade
apparel and garment industry.

24
Abdus Sobhan, 'Where Institutional Logics Of Corporate Governance Collide: Overstatement Of Compliance In A
Developing Country, Bangladesh' (2016) 24 Corporate Governance: An International Review.
25
Donald JS Brean, 'Corporate Governance: International Perspectives' (2019) 29 Routledge.
26
Afzalur Rashid, 'The Influence Of Stakeholder Power On Corporate Social Responsibility: Evidence From A
Relationship-Based Economy' (2015) 11 Social Responsibility Journal.
27
Sobhan A, 'Where Institutional Logics Of Corporate Governance Collide: Overstatement Of Compliance In A
Developing Country, Bangladesh' (2016) 24 Corporate Governance: An International Review
28
Richard Croucher and others, 'Legal Sanction, International Organisations and The Bangladesh Accord' [2019]
Industrial Law Journal.
29
Jimmy Donaghey and Juliane Reinecke, 'When Industrial Democracy Meets Corporate Social Responsibility - A
Comparison Of The Bangladesh Accord And Alliance As Responses To The Rana Plaza Disaster' (2017) 56 British
Journal of Industrial Relations.
2. An independent inspection program was formed under this accord for the inspection of working
conditions in the industry which made unions and workers
3. Public disclosure those required by the participant factories which included corrective action
plans and inspection reports
4. Under this accord, a commitment was made by signing companies and brands to make sure that
sufficient funds are available for the maintenance of supply chain and sourcing relationships
5. Another component of the code was that all the signing companies would form democratically
elected committees for health and safety insurance within their companies so that health and
safety risks could be avoided
6. Extensive training programs, refusal towards the unsafe working environment, and all proper
complaint mechanisms would be ensured by all the companies participating to ensure worker
empowerment

All the above components but included in the initial implementation phases of the Accord.

5.2 Garment Industry in Bangladesh and the Need for the Bangladesh Accord

Bangladesh became a part of the global economy as an exporter in the Ready-Made Garments
Industry in the early 1980s and there was an increase in industrial parks or specialized EPZs (Export
Processing Zones). By observing the increase in foreign direct investment in the department, new
and separate laws were formulated to encourage the smooth running of investments and capital in
the industry under the Bangladesh Export Processing Zones Act, 1980 30. According to the records
and reports in the past 20 years, there have been numerous fires and incidents in the apparel
factories in the Eastern countries, especially in Bangladesh31. Various incidents of industrial
accidents started to occur in the 1990s. The major blow to the industry was faced in the case of the
Rana Plaza building collapse on April 24, 2013 32. This incident is one of the worst industrial
accidents globally and was the major cause of the formation of the Accord on Fire and Building
Safety and the Alliance for Bangladesh Worker Safety 33. These two are the key monitoring
mechanism for keeping the activities of the ready-made garment industry companies under check
for sustainability. Fires after fires have been reported to have claimed the lives of workers,
especially young women, and children, and thousands have been left injured, disabled, or affected

30
Export Processing Zones Act 2022.

31
Fahreen Alamgir and Subhabrata Bobby Banerjee, 'Contested Compliance Regimes In Global Production Networks:
Insights From The Bangladesh Garment Industry' (2018) 72 Human Relations.
32
Rashedur Chowdhury, 'The Rana Plaza Disaster And The Complicit Behavior Of Elite Ngos' (2017) 24 Organization.

33
. Jennifer Bair, Mark Anner and Jeremy Blasi, 'The Political Economy Of Private And Public Regulation In Post-
Rana Plaza Bangladesh' (2020) 73 ILR Review.
mentally for life34. When the five-year Bangladesh Accord on fire and building safety was signed in
2013, it was perceived that Bangladesh would eventually become one of the safest havens for
garments and Apparel workplaces globally35.

However, there were many challenges faced in the path of the full implementation of the Accord
including poverty in the country and lack of resources, corrupt and notorious government and
accountability structure, harsh working environment in factories, and a case of “buyer’s remorse”
imposed in the consumers of ready-made garments in the aftermath of the Rana Plaza building
collapse. All the stakeholders of the industry are aware of over 1600 deaths of garment workers in
the past decade.

In addition to structural integrity issues, as the ones that caused the Rana Plaza collapse, numerous
other causes of fires and incidents can also be pointed out including the improper storage of
flammable raw material, unprotected sources of ignition, damaged and overloaded electrical
circuits, electric equipment that is left unchecked and are not serviced for long periods of time, a
lack of accurate fire suppression systems, insufficient exits from buildings in case of emergency,
locking practice of metal gates leading to exits and staircases to keep the workers in during work
hours, and most importantly, a lack of proper employee training, practice drills, and emergency
evacuation plans36. Most of the factories in Bangladesh that have been victims of incidents of
collapse or fire had been inspected either by in-house auditors of the retailers sourcing from the
companies or the international clothing brands that were ordering and outsourcing work to them.
The same is the case with the Rana Plaza incident; it was inspected and audited a few months before
the collapse. Furthermore, reports of structural flaws were made by the workers to the management
days and weeks before the collapse, but instead of addressing these issues, the workers were
threatened to return to work or face severe consequences like being fired or having their salaries
held back. In other cases, as well, most of the time, despite the low scores of CSR audits, the
garment factories, which were death traps for the workers, continued to receive ever-growing orders
from the international clothing brands. In case of any hazards found in audits, proposals of
rededication steps were made to the company owners, but they were not made public information
and no major changes were made to make the workplaces safe and secure for the labor class. After

34
Samira Manzur and Elizabeth Remick, 'After Rana Plaza: From Building Safety To Social Dialogue' [2017] SSRN
Electronic Journal.
35
Juliane Reinecke and Jimmy Donaghey, 'After Rana Plaza: Building Coalitional Power For Labour Rights Between
Unions And (Consumption-Based) Social Movement Organisations' (2015) 22 Organization.

36
Md. Morshadul Hasan, 'Deadly Incidents In Bangladeshi Apparel Industry And Illustrating The Causes
And Effects Of These Incidents' (2017) 5 Journal of Finance and Accounting.
every small incident or major industrial disaster, the clothing brands and retailers have known to
make promises, none of which were implemented, until the formation of the Accord in 2013.

5.3 The Power and Influence of Stakeholders in Context of the Bangladesh Accord

As already discussed, the Accord is a legally binding agreement that was made between various
global brands and retailers, IndustriALL Global Union, UNI Global Union, and the affiliated unions
of these companies and international unions working in Bangladesh5,28. Over 220 companies signed
the initial 5-year Accord, and the power and influence of stakeholders for controlling the CSR
activities of concerned companies are evident in the significant progress that the Accord has
achieved in making the workplaces for Bangladeshi garment workers safer and healthier. To
maintain and expand the progress that was achieved by the 2013 Accord, further 190 clothing
brands and retailers, along with several global unions, signed a new agreement, the 2018 Transition
Accord, a renewed agreement that became effective on the 1st of June 201833.

Several stakeholder groups have played their respective roles in improving the conditions of the
garment industry in Bangladesh and materializing the goals and aims of the Accord. international
organizations and campaign groups of human rights33. Global activists foresaw that the Accord had
the capability to improve labor and employee safety conditions in the factories. Many stakeholders
believed that the Accord would provide an opportunity for collaboration between both international
and national human rights groups, labor rights organizations, labor unions, and other organizations
that could enforce the retailers and brands to make legally binding laws and regulations for
conducting a regular fire and building inspection regime in Bangladeshi garment factories. Human
rights organizations and activist groups had been demanding to work towards a legally binding
agreement between trade unions in Bangladesh and the foreign brands outsourcing their work to the
country so that the shady practices in the subcontracting forms could be controlled. for these
international organizations and activist groups, the Accord was a developmental step towards the
formation of contractual laws and collaborative governance work models that could be implemented
in Bangladesh. The accord was a multi-stakeholder agreement since the start that had scope for
participation of local national and international activists and civil society, in addition to the internal
stakeholders of the concerned companies.

The major aim of the Accord had always been to ensure that an inspection program is established
that can be used to eradicate the fear of fires, collapses of buildings, and any other preventable
incidents and to ensure the health and safety measures for the workers in the Ready-Made garments
industry. However, these inspections have been limited to factories that are the major source of
signatory brands instead of covering the entire industry in Bangladesh. As the major affected
stakeholder in the previous incidents had been the employees and labor force, the Accord provided
them with a significant amount of power and influence over CSR activities of the signatory brands
in terms of increased empowerment and training programs that aimed towards increasing
sustainability of overall garments industry.

The initiatives such as the Accord can be seen as examples of private initiatives that are loosely in
contact with the local governments as well. The government of Bangladesh took various steps to
improve the inspection regimes by increasing the visit of the Department of Inspection for Factories
and Establishments (DIFE) to the signatory factories in order to increase the impact of the Accord.
Similarly, an arrangement was made with the government of Bangladesh by the Accord and the
Alliance (a similar organization working to improve CSR activities of companies in Bangladesh
from America) so that the country's over 5000 garment factories could be monitored altogether 37.
As the stakeholders and the government of Bangladesh were hands in hand for implementation of
the inspections and better fire and building conditions in the industry, the Accord was more
successful in assessing the supplier conduct and overall supply chain sustainability as compared to
the private government mechanisms that had been used previously in the country. This could be due
to the fact that the Accord was not solely a private regulation but instead was more powerful due to
the involvement of stakeholders like the global union federations, foreign brands, and the local
government. furthermore, the potential to challenge the relations of power and influence of the
Labor force on the employers increased the effectiveness of the Accord and its interventions.

The power and influence of international organizations are very strongly evident in this case. a
critical overview of the. Following the Rana Plaza disaster uncovers the fact that the Bangladeshi
government responded to the demands of the international forces such as the European Union and
US consulates as there was a lot of pressure to improve the local labor laws, provide freedom to the
worker association and unions in the country and to ease the rules on the EPZs so that the labor and
worker rights could be protected and fought for. The garment industry brought in a significant
amount of revenue, the government had no choice but to comply with the demands of these
international stakeholders, leading to evident amendments in the labor laws of Bangladesh in 2013.
The government documents revealed that the amendments were mainly in the areas of worker
welfare, worker safety, human rights, trade union freedom, trade promotions, and collective
bargaining. The power of stakeholders led the government to adopt policies like the National
Occupational Health and Safety Policy38 in 2013 and the amendment of the overall 76 sections in
the labor law. Relaxations were also introduced for unionization at production sites to increase the
health and safety assurance of workers.
37
Javed Siddiqui, Kenneth McPhail and Sharmin Shabnam Rahman, 'Private Governance Responsibilisation In Global
Supply Chains: The Case Of Rana Plaza' (2020) 33 Accounting, Auditing & Accountability Journal.

38
Hossain J, Akter A and Raisul Islam Khan M, Occupational Safety and Health in Bangladesh: National Profile (2015)
However, while on one hand, the power of international stakeholders improved the labor conditions
in hindsight of the Accord in Bangladesh, the national stakeholders such as the Bangladesh Garment
Manufacturers and Exporters Association ( BGMEA) reduced the overall effectiveness and success of
the Accord. BGMEA made sure that it was evident that the owners and trading bodies did not
welcome the changes that were being brought about in the industry by the interference of the
Accord and its initiatives39. Written mediums and discussion forums were organized by factory
owners and their representatives to portray the disapproval against actions of the accord.

The discord between the BGMEA and the Accord was not able to deteriorate the path that the
Accord was on indicating that, unlike past private and corporate self-governance regimes, the
Accord was much stronger, stable, and not easy to flout. The industry owners and leaders in
Bangladesh have shown detestation and discomfort towards the newly installed mechanisms in the
Bangladeshi garments industry. On several occasions, owners of factories that had important
positions in BGMEA commented that owners must be provided with an option of “self-governance”
instead of the imposed external and decentralized governance by the Accord. The relationship
between the Accord and the BGMEA went on a decline during the implementation years of the
initiates of the Accord. Furthermore, the government in Bangladesh also followed suit of the
BGMEA later, and on several occasions, government representatives were seen to dub these new
governance regimes as interference with the internal affairs of the state. in 2018 a member of the
Ministry of Labor and Employment was found commenting that they were willing to eradicate the
provisions of the Accord and the Alliances in Bangladesh for good as they were irrationally
interfering with internal labor laws. Several other occasions also revealed the unhappiness of the
government and BGMEA in terms of the international pressure that fell upon them after the
collapse of the Rana Plaza building40. Despite these negative relationships with stakeholders, the
Accord’s second agreement was signed on the 21 st of June 2017. the signatories of the second
agreement also agreed to carry on with the fire and building safety programs that were upheld in the
first agreement up until the 31st of May 31, 2021. However, to reach a middle ground it was agreed
that by the end of the second term of this agreement, the work of the Accord will be handed over to
a national regulatory body instead of international ones, even though the International Labor
Organization will still support it.

However, in actuality, a different direction was adopted. In January 2020, a deal was made between
the Accord and the BGMEA to transition the Accord into RMG Sustainability Council (RSC). RCS,
39
Shahidur Rahman and Kazi Mahmudur Rahman, 'Multi‐Actor Initiatives After Rana Plaza: Factory Managers’ Views'
(2020) 51 Development and Change.
40
Humayun Kabir and others, 'The Current Health And Wellbeing Of The Survivors Of The Rana Plaza Building
Collapse In Bangladesh: A Qualitative Study' (2019) 16 International Journal of Environmental Research and Public
Health.
according to this plan would be operating within the laws and regulatory control of Bangladesh 41,
based on similar protocols and systems as were used by the Accord. The transition from
international to local operation was centred on the wish of the stakeholders to find a common
ground to move ahead together to ensure the continuation of the Accord, however, the new national
initiative was not defined by an enforceable agreement 42. The move was aimed to provide an
opportunity to develop a local independent accountability mechanism to make sure that the RSC
was fulfilling its basic mission of conducting periodic inspections, remediating improvements that
are required, and terminating factories that have continuously failed to make the remediated
changes for improving the lives of the workers by providing them life safety 42. However, the Labor
Laws in Bangladesh, according to the Bangladesh Labor Act, 2006 43 and its recent amendments, are
not clear and legally binding the factories to carry out CSR activities. The focus of this statute is
mainly on the perseverance of employee satisfaction under domains like working hours, leaves, pay
rate, etc., and does not majorly focus on accidents and impunity. In March 2021, in a statement by
the investors of the Accord42, it was indicated that the Accord would expire in less than two months,
on May 31, 2021. It was mentioned that if the global unions and brands fail to strike a new
agreement and extension of the Accord by this time, there would be a lack of an enforcing body that
would be working to ensure that the RSC is functioning properly and there would be no
independent organization that would be presenting any reports on its performance 42. No enforceable
brand commitments would remain if a new agreement were not signed, as per the accounts in the
investor statement. In the case of the class-action lawsuit that was appealed in Canada by survivors
of the Rana Plaza in 2017 against a major company, Loblaws, it was witnessed that due to a lack of
authority, the Supreme Court of Canada refused to hear the case 44. The court dismissed the case
because the plaintiffs' claims were time-barred under the law held to apply in the case, Bangladesh's
Limitation Act 190845. It is therefore critical to have a legally binding agreement like the Accord to
safeguard the workers’ safety and rights under circumstances like these. In addition to the historical
evidence, the Investor Statement further expanded on the fact that the garment workers in
Bangladesh are currently in a very vulnerable state due to the COVID-19 pandemic as many
workers have lost their jobs, rights to healthcare, and the difficulty of social distancing has exposed
many to the virus42. All these reasons were presented as a wake-up call to all the involved

41
Youbin KANG, 'The Rise, Demise And Replacement Of The Bangladesh Experiment In Transnational Labour
Regulation' (2021) 160 International Labour Review.

42
Investor Statement in Support of the Maintenance and Expansion of the Bangladesh Accord (2021)
43
Bangladesh Labour Act, 2006

44
Perkel C, ‘Loblaws off the hook for Rana Plaza disaster; Bangladeshi lawsuit fails’
<https://www.cbc.ca/news/politics/rana-plaza-disaster-loblaws-supreme-court-1.5240493>
45
The Limitation Act, 1908
stakeholders. A call to action was demanded by the investors to expand the Accord to safeguard the
basic human rights and ensure that the companies that they are investing in are following the main
protocols of the Accord such as; assessments of any underlying salient issues i.e. regular audits,
assurance of integration of the findings in the future business to ensure business reliability,
monitoring of workplace issues by external parties and by the employees to ensure the identification
of workplace issues, transparency in processes, etc. The investors proposed that the global brands
sourcing in Bangladesh should sign a new legally binding agreement with global unions. The new
agreement was proposed to include enforceable obligations for ensuring CSR practices in the
companies to make sure that the worker health and safety is protected, maintenance of “the role of
the Accord secretariat as an independent mechanism of accountability for the RMG Sustainability
Council” and ensuring that the agreement is international in scope to provide increasing jurisdiction
over the Accord’s lifesaving inspection and remediation programs.

6. Conclusion

This essay aimed to analyze the role of power and influence of stakeholder expectation over the
corporate social responsibility of a company. For this purpose, the undertaken case was of the
Accord in Bangladesh following the collapse of Rana Plaza in 2013. It can be easily observed from
the above discussion and case analysis that the stakeholders, especially the employees and the
investors, were powerful and significant drivers of the improvement of the CSR activities in the
country’s Readymade garments industry, especially during the first tenure of the Accord. Even
though the local government and the BGMEA were working to nullify the actions and initiatives of
the Accord by claiming it to be an interference of international bodies in the local community and
jurisdiction of Bangladesh, they were not successful in curbing its aims and objectives.

A perfect example of the power difference of stakeholders can be observed from the fact that
despite reaching an agreement between BGMEA and the Accord in January 2020 in which it was
finalized that the Accord will not be renewed, and its duties will be handed over to the RMG
Sustainability Council (RSC), the investor statement and petition in March 202160 led to enforcing
the investors and the other stakeholders to renew the Accord in Bangladesh. In a meeting in Geneva
in August 2021, negotiations were carried out between a set of representatives of international
textile retailers and the global trade union signatories. They reached a conclusion to expand the
prior Accord on Fire and Building Safety in Bangladesh so that the legally binding commitment for
the workplace safety in Bangladesh are continued and, to increase the impact that the Accord has on
the trade union and employee health benefits, it was also decided to expand the program to other
domains in the industry as well as to other countries. This new agreement is titled “International
Accord for Health and Safety in the Textile and Garment Industry” and came into effect on the 1st of
September 2021 and is set to expire on 31 October 202346. This new agreement is also legally
binding, just like its predecessor with some key new features like a commitment towards building of
a credible industry-wide system for compliance and accountability in Bangladesh, in addition to the
focus on the health and safety of the Workers, expansion of the work of the Accord in other
domains and other countries on basis of feasibility studies, expansion to include the addressing of
the human rights due diligence by member companies and an arbitration process that will enforce
the terms of the Accord.

In summary, it can be stated that the stakeholder interests in Bangladesh were very high and
diverse. While a group of strong stakeholders was interested in making profits, despite whatever
conditions the workers are working in (the local government, the BGMEA, and other local bodies),
the second group, international investors, sourcing companies, international and global human
rights organizations, etc., were able to exert more influence to overcome the issues of labor
exploitations in the garments industry under the provisions of the Accord by manifolds since it was
put into action in 2013.

46
International Accord for Health and Safety in the Textile and Garment Industry (2021)
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