Buyer Engagement and Labour Conditions in Global Supply Chains: The Bangladesh Accord and Beyond
Key Insights for Managers
Buyers engage in auditing, capacity building, and pressuring government as their three primary approaches to improve the labor standards of their global suppliers, according to a study by Chikako Oka, Niklas Egels-Zandén and Rachel Alexander who conducted 130 interviews with 64 European firms who are part of the Accord on Fire and Building Safety in Bangladesh ("Accord"). The most common approach is auditing, whereby buyer firms audit their suppliers against codes of conduct. While this approach can give buyers insight into the prevailing labor conditions of their suppliers’ factories, audits can be unreliable and the process often does not result in effective changes at the factory level. Collective application of an auditing approach, as applied by the Accord, can have more impact than individual buyers’ actions. Capacity building can be more effective at creating change but is resource intensive and often applied at a small scale. Advocacy can address nation-wide issues but can be a slow and complex process.