ICA, 20 June 2018
Given the political and legal landscape that maintains under-regulated environments and guarantees lower costs for companies, achieving corporate accountability for supply chain abuses remains a challenge. The HRLA and ICA brought together an experienced panel to address this issue and present their strategies to break through these political and legal limitations. Each speaker discussed their ideas of how to move closer towards enforcing workers’ rights and achieving greater accountability. This blog discusses a few of the highlights from the evening.
Ali Enterprises Factory Fire – Augmenting Legal Mechanisms
The discussion began with an introduction of the factory fire at Ali Enterprises. In September 2012, over 250 people lost their lives in a factory fire in Karachi, Pakistan. The fire can be seen as a symptom of a global supply chain whereby manufacturers produce goods in countries where health and safety laws are not enforced and workers lack empowerment.
Christina Varvia, Deputy Director of Forensic Architecture, presented their analysis of the Ali Enterprises factory fire. Their approach to the subject of supply chain abuses put the building and the architecture in the foreground. The analysis explained how the supplier’s failure to comply with Pakistani building regulations allegedly contributed to the high death toll. Their work on this case has been submitted to a court in Germany to support proceedings against the main buyer from the factory – more on this case below. This collaboration showed how working across disciplines can illuminate the risks faced by workers across global supply chains.
The Role of Litigation and Empowering Workers
Krishnendu Mukherjee, who chaired the event, emphasised that the protection of workers has been undermined by the failure of domestic and international law to keep up with globalisation. In the face of this accountability gap, the panel explored new legal tools to secure rights and accountability.
Shanta Martin discussed the cases that Leigh Day has been involved in that seek to overcome the so-called “corporate veil”. This principle means that parent companies in home states are not responsible for the damage caused by subsidiary companies in host states, thereby limiting access to remedies. Leigh Day has successfully argued that a parent company may be directly liable where they have de facto control over the operations of a subsidiary company.
This concept of direct parent company liability is now being tested in the context of supply chains. The European Centre for Constitutional and Human Rights is supporting a case brought by the survivors of the Ali Enterprises fire against the parent company, KiK Textilien GmbH (“KiK”), in Germany. Dr Anil Yilmaz-Vastardis, who wrote the expert opinion, discussed a central argument in the case: that by setting standards, conducting audits and putting pressure on the factory to meet strict deadlines KiK owed the employees of Ali Enterprises a duty of care. The litigation is important as it seeks to ensure that tort law reflects the reality of how work in the global supply chain is now organised.
Amongst the excitement generated around these innovative legal arguments, Jenny Holdcroft, Assistant General Secretary at IndustriALL Global Union, reminded us that ensuring labour rights are fulfilled is a prerequisite to preventing supply chain abuses. She emphasised that the deadly conditions illustrated in Forensic Architecture’s powerful analysis are found across most factories in garment producing countries. Jenny highlighted the importance of initiatives such as the Bangladesh Accord to address these systemic problems. In addition, she discussed her work developing industry-wide collective agreements that ‘ring-fence’ living wages. Ensuring this basic commitment to a living wage can end poverty wages and result in host states having a greater share of the value in the supply chain.
The cases discussed demonstrate that litigation can be a critical tool in securing compensation and providing leverage to those who find themselves at the end of long and complex supply chains. However, a key message that came out of the event was that long-term change and accountability requires empowering workers and raising standards across industries.
A wish List for the Future
Finally, the panellists were asked to share one change they would like to see to improve corporate accountability:
- Dr Anil Yilmaz-Vastardis: For judges to exercise their interpretive discretion to match legal liability with economic realities where risk is outsourced;
- Jenny Holdcroft: A global architecture for industrial relations to deal with transnational corporations so that workers can enforce rights on a global level;
- Shanta Martin: Improving access to civil remedies, for example amending the Modern Slavery Act 2015 to establish a tort for human trafficking or modern slavery;
- Christina Varvia: Increased responsibilities across all levels, including action against the architects, contractors and managers for the failure to comply with regulations.
Geeta Koska is a member of the Young Lawyers Committee of the Human Rights Lawyers Association and is commencing her pupillage at 1MCB in autumn 2018.
*The Government document referred to in the audio recording was an email from a civil servant in the Department for Business, Innovation & Skills in response to questions put to them on the Government’s current policy on tackling supply chain abuses.