A coalition of civil society groups has filed a complaint against Amazon, Ikea and Tom Tailor for what it calls a “failure” of corporate due diligence under Germany’s Supply Chain Act, which requires large companies to identify, address and mitigate social and environmental abuses within their own and direct suppliers’ operations. It’s the first case of its kind since the law passed last June and went into effect in January.
The African Women’s Development and Communication Network—better known as FEMNET—the European Center for Constitutional and Human Rights (ECCHR) and the National Garment Workers Federation (NGWF) announced the move exactly 10 years after the Rana Plaza multi-factory building collapsed just outside the Bangladeshi capital of Dhaka, killing 1,134 garment workers and maiming and injuring scores more.
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“Now is the time to use the German law to finally oblige such companies that do not want to voluntarily take responsibility for the people in their supply chains to do so,” said Gisela Burckhardt, chair of the board at FEMNET.
The complaint hinges on safety shortcomings such as lack of inspections, along with labor rights violations such as a lack of freedom of association, that the organizations said they identified during recent research. It faults Amazon, Ikea and Tom Tailor for failing to sign the binding Accord for Fire and Building Safety in Bangladesh, now known as the International Accord for Health and Safety in the Textile and Garment Industry, which could have provided them with an “effective mechanism for improving workplace safety.”
“Ten years after Rana Plaza, there are still factories in Bangladesh producing clothes for international corporations like Amazon, Ikea or Tom Tailor, where there are hardly any safety checks,” said Amirul Haque Amin, president and co-founder of the NGWF. “We can no longer accept this.”
Amazon and Tom Tailor did not immediately return emails requesting comment. Amazon has been dinged for selling clothing from factories in Bangladesh that have been blacklisted for dangerous workplace conditions. Ikea said it wasn’t able to comment because it hasn’t received any information from the German authorities. The furniture giant previously said that it prefers its own safety audit program, which it dubs the Ikea Way, or IWAY.
Miriam Saage-Maaß, lawyer and legal director at ECCHR, said that she’s convinced that the companies’ reticence to sign the Accord in all its iterations is a “violation of corporate due diligence.”
“It is now up to the competent German authority, the Federal Office of Economics and Export Control, to consider the complaint,” she said. “We very much hope that the authority will ensure that German companies’ business practices will not contribute to deadly disasters like Rana Plaza in the future.”
The filing comes as more than 190 investors representing $1.3 trillion in assets under management called on brands sourcing from Bangladesh and Pakistan to “strengthen their implementation of human rights due diligence to effectively embed their corporate responsibility to respect human rights” by signing both the International Accord and its Pakistan spinoff.
“The days of voluntary CSR are fading, now replaced by a combination of mandatory human rights due diligence laws and regulations,” said David Schilling, senior advisor, at the Interfaith Center on Corporate Responsibility. “For 10 years, the Bangladesh Accord has proven that legally binding agreements anchored to a governance structure comprising trade unions and companies with authentic worker engagement and effective grievance mechanisms are the best recipe for meaningful, long-term change.”
There’s also the fact that legislators worldwide are increasingly casting a gimlet eye on supply chains worldwide, said Matthias Narr, head of international engagement at Ethos. Germany aside, the broader European Union plans to require companies to demonstrate the actions they are taking to uphold human rights and environmental standards. In New York State, a bill that seeks to hold brands accountable for the same is also gaining ground.
“In the current policy environment, companies are increasingly required to show how they effectively implement human rights due diligence to address salient human rights issues across their operations and value chains,” he said. “Companies need to prepare and ensure compliance with current and upcoming regulation. If not already a signatory, the best way to ensure due diligence on health and safety issues is to join the International Accord and the Pakistan Accord.”
Investors are also urging brands to join the Employment Injury Scheme pilot, an International Labour Organization-backed tripartite initiative happening in Bangladesh’s garment industry aimed at bolstering compensation for medical treatment, rehabilitation services and income loss stemming from occupational injuries and disease.
“As a legally binding system designed to protect more than two million garment workers and give them a mechanism for redress, the Accord has been absolutely transformative in the apparel industry over the past ten 10 years,” said Lauren Compere, head of stewardship and engagement at Boston Common Asset Management. “At the same time, investor expectations of portfolio companies with regard to human rights implementation have also risen, and today we call on apparel brands to go further, and put human rights at the core of their business models and worker health and safety as a top priority in their supply chain management.”