Human rights disasters, corporate accountability and the state

Abstract

Purpose – The purpose of this paper is to examine the state-business nexus in responses to human rights violations in businesses and questions the efficacy of the UN guiding principles on human rights in businesses, in particular in the ready-made garments (RMG) industry in Bangladesh. Drawing on Cohen’s notion of “denial” and Black’s (2008) legitimacy and accountability relationships of state and non-state actors, the study seeks to explain why such “soft” global regulations remain inadequate. Design/methodology/approach – The empirical work for this paper is based on the authors’ participation in two multiple-stakeholder advisory consultation meetings for the RMG sector in Bangladesh and 11 follow-up interviews. This is supplemented by documentary evidence on human rights disasters, responses of the state and non-state actors and human rights reports published in national and international newspapers. Findings – The paper provides clear evidence that the state-business nexus perpetuates human rights disasters. The study also shows that the Bangladeshi state, ruled by family-led political parties, is more inclined to protect businesses that cause human rights disasters than to ensure human rights in businesses. The economic conditions of the RMG industry and accountability and legitimacy relationships between state and non-state actors have provided the necessary background for RMG owners to continue to violate the safety and security of the workplace and maintain inhumane working conditions. Research limitations/implications – Complex state politics, including family, kinship and wealthy supporters, and economic circumstances have serious implications for the efficacy of the UN guiding principle on human rights for business. This paper calls for broader political and economic changes, nationally and internationally. Originality/value – The study highlights the perpetuation of corporate human rights abuses by the state-business nexus, and indicates that human rights issues continue to be ignored through a discourse of denial. This is explained in terms of legitimacy and accountability relationships between state and non-state actors, bounded by complex political and economic conditions.

Stakeholder interactions and corporate social responsibility (CSR) practices

“…Most importantly perhaps arising from such an institutional context, are stark power asymmetries existing between the state anxious to attract FDI and MNCs (e.g. Siddiqui and Uddin, 2016). The resultant alliance between the state and MNCs, is such that it is not only the general population which finds itself excluded, but also their representatives in the form of civil society organisations.…”

“…Alternatively, organisations may use legitimation techniques, such as linking themselves to other institutions, in order to develop moral and cognitive legitimacy. Siddiqui and Uddin (2016) give the example of the Bangladeshi state which depends on businesses, not only for economic reasons, such as investment and employment, but also because of businessmen's influence over state politics in the particular context of Bangladesh.…”

“…These power asymmetries, for example, manifest themselves at the very outset in terms of the negotiation of mineral development agreements between the host state and MNCs, so leading to a governance gap (Hilson, 2012), such that the state can see its capacity to enforce regulations promoting corporate accountability as being significantly compromised (Lauwo et al, 2016). Similarly, Siddiqui and Uddin (2016) acknowledge the state's inability and/or unwillingness to stop human rights abuses, especially those committed by MNCs. They cite clear evidence of what they term the "state-business nexus" in perpetuating human rights disasters, with "this nature of the state creat[ing] the necessary conditions for businesses to disregard human rights in businesses" (Siddiqui and Uddin, 2016, p. 696).…”

“…Here, following Siddiqui and Uddin (2016), the state-business nexus manifests itself again, with the state perhaps being a dependent stakeholder (Mitchell et al, 1997), acting as advocate for the MNCs which, it claims, deliver development to discretionary stakeholders, the local communities. This complex relationship between the MNCs and the state is complicated further by one non-human factor, also commented upon by Hamann and Kapelus (2004):…”

International advocacy NGOs, counter accounting, accountability and engagement

“…However, these dialogic characteristics cannot be assumed to be part of all counter accounting, particularly when dealing with structural issues such as the negative impact of globalization or sustainable development, or in long standing controversial arenas (Belal et al, 2015;Cooper et al, 2011;Dey and Gibbon, 2014;Lauwo and Otusanya, 2015;Sikka, 2006Sikka, , 2011Siddiqui and Uddin, 2016;Spence, 2009).…”