The Garment Industry in Bangladesh, Corporate Social Responsibility of Multinational Corporations, and The Impact of COVID-19

This article investigates the Bangladeshi garment industry that supplies ready-made garments for global brands and the corporate social responsibilities (CSRs) of the brands/multinational corporations (MNCs) towards their supply chains. Although outsourcing and global trade have boosted the living s...

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Published in:	Asian journal of law and society Vol. 9; no. 2; pp. 255 - 285
Main Authors:	Reza, Ninia, Du Plessis, Jean Jacques
Format:	Journal Article
Language:	English
Published:	Cambridge, UK Cambridge University Press 01.06.2022
Subjects:	Brand names Brands Business logistics Clothing industry Clothing trade Companies Coronaviruses COVID-19 COVID-19 (Disease) Developing countries Factories Financial reporting GDP Governance Gross Domestic Product Human rights International business enterprises International trade Law LDCs Legality Meta-analysis Multinational corporations Outsourcing Pandemics Research methodology Social responsibility Social responsibility of business Standard of living Supply Supply chains Work environment Working conditions BANGLADESH United States > US Bangladesh non-financial reporting Bangladeshi garment industry corporate governance corporate social responsibility global supply chains force majeure clauses impact of COVID-19
ISSN:	2052-9015, 2052-9023
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Abstract	This article investigates the Bangladeshi garment industry that supplies ready-made garments for global brands and the corporate social responsibilities (CSRs) of the brands/multinational corporations (MNCs) towards their supply chains. Although outsourcing and global trade have boosted the living standards of many people in the Bangladeshi garment industry, there are some significant concerns regarding the working conditions and treatment of workers in these supply chains. This, in turn, cannot, and should not, be detached from the legal relationship between the Bangladeshi supply chains and the MNCs contracting with them. This article examines the impact of COVID-19, which has exposed the fragility and the pre-existing flaws in the relationship between the MNCs and their suppliers more clearly than at any other time in history. There is a huge governance gap between MNCs and supply chains that needs to be addressed urgently. This article assesses the legality of the cancellation of orders by the brands that invoked the force majeure clause. In doing so, this paper briefly deals with the responses of three American retail companies, namely Sears, Kohl’s, and the Arcadia Group, in the wake of the COVID-19 pandemic. It illustrates that the power asymmetry between the MNCs and their suppliers has put the supply chains in an unreasonably disadvantageous position, creating unfair and even unconscionable conduct by several MNCs. This article also looks at solutions for the existing problems, focusing, inter alia, on non-financial reporting requirements in the US and the EU to implement CSR in supply chains. However, disappointingly, the authors had to conclude that MNCs typically have the propensity to disregard CSR, whenever it is convenient for them and use CSR for mere “greenwashing” purposes for their strategic benefit only. It is a problem that requires constant attention and continuing research to find long-term solutions. The article employs doctrinal methodology and, by conducting a meta-analysis of literature and case-studies, it provides a comprehensive understanding of how the industry works.
AbstractList	This article investigates the Bangladeshi garment industry that supplies ready-made garments for global brands and the corporate social responsibilities (CSRs) of the brands/multinational corporations (MNCs) towards their supply chains. Although outsourcing and global trade have boosted the living standards of many people in the Bangladeshi garment industry, there are some significant concerns regarding the working conditions and treatment of workers in these supply chains. This, in turn, cannot, and should not, be detached from the legal relationship between the Bangladeshi supply chains and the MNCs contracting with them. This article examines the impact of COVID-19, which has exposed the fragility and the pre-existing flaws in the relationship between the MNCs and their suppliers more clearly than at any other time in history. There is a huge governance gap between MNCs and supply chains that needs to be addressed urgently. This article assesses the legality of the cancellation of orders by the brands that invoked the force majeure clause. In doing so, this paper briefly deals with the responses of three American retail companies, namely Sears, Kohl’s, and the Arcadia Group, in the wake of the COVID-19 pandemic. It illustrates that the power asymmetry between the MNCs and their suppliers has put the supply chains in an unreasonably disadvantageous position, creating unfair and even unconscionable conduct by several MNCs. This article also looks at solutions for the existing problems, focusing, inter alia, on non-financial reporting requirements in the US and the EU to implement CSR in supply chains. However, disappointingly, the authors had to conclude that MNCs typically have the propensity to disregard CSR, whenever it is convenient for them and use CSR for mere “greenwashing” purposes for their strategic benefit only. It is a problem that requires constant attention and continuing research to find long-term solutions. The article employs doctrinal methodology and, by conducting a meta-analysis of literature and case-studies, it provides a comprehensive understanding of how the industry works. This article investigates the Bangladeshi garment industry that supplies ready-made garments for global brands and the corporate social responsibilities (CSRs) of the brands/multinational corporations (MNCs) towards their supply chains. Although outsourcing and global trade have boosted the living standards of many people in the Bangladeshi garment industry, there are some significant concerns regarding the working conditions and treatment of workers in these supply chains. This, in turn, cannot, and should not, be detached from the legal relationship between the Bangladeshi supply chains and the MNCs contracting with them. This article examines the impact of COVID-19, which has exposed the fragility and the pre-existing flaws in the relationship between the MNCs and their suppliers more clearly than at any other time in history. There is a huge governance gap between MNCs and supply chains that needs to be addressed urgently. This article assesses the legality of the cancellation of orders by the brands that invoked the force majeure clause. In doing so, this paper briefly deals with the responses of three American retail companies, namely Sears, Kohl’s, and the Arcadia Group, in the wake of the COVID-19 pandemic. It illustrates that the power asymmetry between the MNCs and their suppliers has put the supply chains in an unreasonably disadvantageous position, creating unfair and even unconscionable conduct by several MNCs. This article also looks at solutions for the existing problems, focusing, inter alia , on non-financial reporting requirements in the US and the EU to implement CSR in supply chains. However, disappointingly, the authors had to conclude that MNCs typically have the propensity to disregard CSR, whenever it is convenient for them and use CSR for mere “greenwashing” purposes for their strategic benefit only. It is a problem that requires constant attention and continuing research to find long-term solutions. The article employs doctrinal methodology and, by conducting a meta-analysis of literature and case-studies, it provides a comprehensive understanding of how the industry works.
Author	Du Plessis, Jean Jacques Reza, Ninia
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Cites_doi	10.1350/clwr.2011.40.2.0220 10.2139/ssrn.2237437 10.1108/09513579610116358 10.1177/0018726718760150 10.2307/1342499 10.1163/221190012X621535 10.1177/1350508415585028 10.1080/10599231.2013.741417 10.1350/clwr.2012.41.2.0233 10.1016/S0361-3682(01)00019-8 10.1080/13642987.2015.1039318 10.1007/s10551-016-3131-9 10.1093/pubmed/fdaa126 10.21153/dlr2012vol17no1art70 10.1016/0007-6813(91)90005-G 10.1007/s10551-014-2373-7 10.1111/j.1467-8683.2007.00657.x 10.1177/0019793918771360 10.1007/s10551-005-3415-y 10.1177/000765039903800303 10.1080/1323238X.2005.11910793 10.1177/2043820620933851 10.1080/00014788.1998.9729564 10.1080/10192557.2016.1245385 10.1108/17422041111103840 10.1080/1323238X.2018.1441610 10.1016/j.cpa.2011.07.003
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Copyright	The Author(s), 2022. Published by Cambridge University Press The Author(s), 2022. Published by Cambridge University Press. This work is licensed under the Creative Commons Attribution License This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited. (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License.
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Keywords	non-financial reporting Bangladeshi garment industry corporate governance corporate social responsibility global supply chains force majeure clauses impact of COVID-19
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SubjectTerms	Brand names Brands Business logistics Clothing industry Clothing trade Companies Coronaviruses COVID-19 COVID-19 (Disease) Developing countries Factories Financial reporting GDP Governance Gross Domestic Product Human rights International business enterprises International trade Law LDCs Legality Meta-analysis Multinational corporations Outsourcing Pandemics Research methodology Social responsibility Social responsibility of business Standard of living Supply Supply chains Work environment Working conditions
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Title	The Garment Industry in Bangladesh, Corporate Social Responsibility of Multinational Corporations, and The Impact of COVID-19
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