Rana Plaza: Private Governance and Corporate Power in Global Supply Chains

Tandiwe Gross

With a death toll of over 1,120 people and more than 2,500 people injured, the collapse of the Rana Plaza building in Bangladesh on 24 April 2013 is one of the worst industrial accidents in world history. The 11-storey building accommodated shops and a bank on the ground floor and five textile factories with more than 3,000 workers on the upper floors. A day prior to the accident, workers identified major cracks in the building, which prompted the issuing of an evacuation order by the police. Despite this, on 24 April 2013 the workers were forced by the management to enter the building. The textile factories in Rana Plaza were suppliers to a number of popular international brands, including Primark, Bon Marche, Joe Fresh, El Corte Ingles, KiK and Mango. The building had been authorised by local authorities to be 8-storeys high. However, three additional storeys were illegally constructed. The reasons for the collapse are similar to those for the 2005 collapse of the Spectrum factory in Bangladesh which left 64 garment workers dead. There has been a series of fatal accidents in the country’s garment industry ever since. The last major factory fire, which resulted in 112 deaths in the Tazreen Fashion factory, occurred only a few months before the Rana Plaza building collapsed. In total, more than 700 workers have died in the industry since 2005, not including the victims of the Rana Plaza tragedy.[i] More than 8 years after the Spectrum factory collapse, the collapse of Rana Plaza shows that the structural causes of unsafe working conditions in Bangladesh’s garment industry have not changed.

Modelling a Global Union Strategy. The Arena of Global Production Networks, Global Framework Agreements and Trade Union Networks

Michael Fichter

For the past decades of economic globalisation, unions around the world have been on the defensive; their role as voices of the political and economic interests of working people has been marginalised. In a climate of outsourcing, offshoring, flexibilisation and casualisation of work, the loss of union power and the deregulation of labour markets has flourished and opened the way for increasing precariousness and agency work - the "triangular trap"[1].

While continuing to fight to protect their hard-won regulatory instruments within their national domains, trade unions have also begun to look for transnational approaches to combat unfettered international competition that is fed by a race to the bottom over labour costs. The challenge is in developing a strategy that will serve as a political and organisational answer to the dilemma they face – namely, how to bring the power of unions, as locally or nationally organised entities, to bear on the transnational regulation gap in labour relations.

What role do big corporations play in the economic well-being of the European Union? A non-standard view of Eastern Europe

Ognian N. Hishow

The global economic crisis caused demand in the European Union (EU) to drop to low levels. In order to mitigate the effects of the crisis, stimulus packages were hastily put up in the old member states (OMS). A considerable part of the spending was directed to the financial and banking sectors as it was concluded that these were systemically important. In addition, the core sector of Europe’s industry, car production, also received significant financial support.

Both the banking sector and the automotive industry play a crucial role in the new member states (NMS) of the EU. Hence one would expect that spending on banks and automotive firms in Western Europe, where the OMS are located, is what would have kept Eastern Europe’s economy, where most of the NMS are located, afloat during the crisis. Yet that assumption is wrong; the money that has gone to the big international European corporations has largely benefited them alone. To see why, it is important to consider how the economic integration of the NMS was conducted.

Economic Democracy: An Idea whose Time has come, again?

Richard Hyman

“There can be no return to business as usual”: this was the unanimous trade union response to the global crisis. For a time in early 2009, the legitimacy of capitalism was itself questioned in unexpected quarters. In May 2009 the German union confederation, the Deutscher Gewerkschaftsbund, organised a ‘Capitalism Congress’ – using language which for decades would have been taboo – and its president warned of unrest on the streets unless jobs were more effectively safeguarded. One of its leaders, Claus Matecki, insisted that it was important to talk of capitalism rather than using the conventional but bland term soziale Marktwirtschaft (social market economy), since only thus could trade unionists make clear that the existing economic order was historically contingent and founded on a fundamental inequality between workers and employers.[1] Yet there was no follow-up.
 

Private Equity Investments and Labour: Current Trends and Challenges of Trade Unions

Maria Alejandra Caporale Madi

José Ricardo Barbosa Gonçalves

The 2008 global economic crisis revealed how deeply the social life of the working class has been affected by deregulated finance. In this setting, the impact of private equity funds on working conditions has been attracting lots of attention since private equity funds - such as Blackstone, Carlyle Group or Texas Pacific Group - have been responsible for the employment standards of tens of millions of workers. Truly, as workers are confronted with over US $ 1-trillion in worldwide concentrated private equity buyout power, the relevance of private equity funds is outstanding in an analysis of the perspectives of mergers & acquisitions, employment and organised labour.

Corporate governance in a radically changed world - a fresh look at the Rhineland model

Richard Tudway

The collapse of the global financial system raises critical issues in corporate governance, particularly in Anglo American jurisdictions. The global financial crisis, triggered by events in the US and the UK, has destroyed global wealth and output on a huge scale. In spring 2010, world stock markets recorded an astounding $20tr loss in value from highs of some $61tr in December 2007 (World Federation of Exchanges, March 2010). OECD growth slumped in the immediate aftermath of the crisis but has since recovered, though very slowly as growth in advanced economies is expected to remain broadly unchanged at 2.5% in 2011 according to the IMFs World Economic Outlook. Recent data on the US and the UK may yet herald a slide back into recession. Indeed, according to the OECD September forecast, the annual rate of growth in the G7 countries will fall to around 1.5% in the second half of 2010, a full percentage point lower than its forecast in May 2010. In the case of the US, fears that weak employment numbers in September may foreshadow a double-dip recession have prompted further quantitative easing by the Federal Reserve. The Made in America financial crisis and the role of the Anglo American model of corporate governance urgently needs to be re-examined.