Bangladesh Accord Arbitration at Permanent Court of Arbitration: A New Dawn of the Implementation of Human Rights

The expansion of the business operations of Multinational Corporations (MNC) in the developing countries has not only accelerated the process of the global economic mobility, it has also created a space for the violation of human rights in the labour markets of those countries. The loosely regulated labour laws, corruptions, lack of accountabilities of the parties involved culminated to this despair. Ready Made Garment (RMG) industry of Bangladesh is pertinent to mention here. In particular, Rana Plaza incident (24 April, 2013) shocked the global community illustrating the serious lack of the human rights implementations in this sector. Following this incident, a five-year independent and legally binding agreement called the Accord on Fire and Building Safety in Bangladesh (the Bangladesh Accord/Accord) was signed between global brands and retailers and trade unions to ensure the safe and healthy RMG industry. Two Geneva based NGOs named Industrial Global Union and the UNI Global Union along with several other NGOs sponsored and created the Bangladesh Accord. More than 200 apparel brands, retailers and importers from over 20 countries in Europe, North America, Asia and Australia; two global trade unions; and eight Bangladeshi trade unions and four NGOs signed this Accord. Bangladesh Accord contains 25 Articles focusing six key areas of cooperation including ensuring healthy environment, creating independent inspection program, public disclosure of information, establishment of health and risk committee and provisions of training. The Accord has been meant to function in cooperation with the Government of Bangladesh and International Labour Organization.

Article 5 of the Bangladesh Accord has provided for the dispute resolution arising out of this Accord. Accordingly, two arbitration processes were commenced on 8 July 2016 and 11 October 2016 respectively against two global fashion brands in accordance with United Nations Commission on International Trade Law (UNCITRAL) Rules of Arbitration 2010 in the Permanent Court of Arbitration (PCA) seated at Hague, Netherlands. This Court of Arbitration is one of the oldest international forum for dispute settlement dating back from 1899 and the maritime dispute between Bangladesh and India was also resolved in the PCA on 8 July, 2014. The complainants are Industrial Global Union and the UNI Global Union where the names of the respondents remain confidential. The arbitral tribunal was formally formed 3 February 2017 and is presided by Mr. Donald Francis Donovan along with Professor Hans Petter Graver and Mr. Graham Dunning QC. On 4 September 2017, the arbitral tribunal found that the preconditions under Article 5 for the admissibility of the arbitrations are met (though, it published the press release on 18 October, 2017). The arbitrations are scheduled for hearings in the first half of 2018. These arbitrations are exceptional in the history of international arbitration due to the parties involved and the nature of the subject matters concerned.

Under the international human rights law, the states are considered as the primary duty bearers of human rights. The business enterprises very often violate the fundamental human rights for maximizing their benefits. The case is more severe for the labour intensive industries in the developing countries. Many multinational companies try to reduce their manufacturing cost by utilizing the cheap labour market in an economic way. The violation of human rights by many business enterprises thus occupied the headlines of newspapers several times all over the world. Nowadays, the human rights are not violated by the states only. There have been serious allegations of human rights violations to non-state entities which cannot be explained by the State-centric human rights jurisprudence. Some academics (specially, Professor Andrew Clapham) are advocating for the extension of the human rights obligations to non-state actors including the business enterprises too. Besides, “Working Group on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises” established under UN Office of High Commissioner of Human Rights is also working for the implementation of human rights in MNCs within the framework of Guiding Principles on Business and Human Rights. It is pertinent to mention that this non-binding legal document has suggested imposing human rights obligations on the states and the business enterprises. Many NGOs have been seen to align themselves to campaign to establish these obligations. Sometimes, the MNCs themselves set up their private standards to oblige their suppliers to follow human rights obligations. On the other hands, individual actor like the customers of these products can create pressures for the implementation of these norms as well. In light of this, Bangladesh Accord can be regarded as an ideal example for imposing the human rights obligation by a non-state actor to a non-state actor. The binding nature of the Accord and provision of dispute resolution has made it more than a paper document. The admissibility of the two arbitrations at the PCA is one of the successes of this new human rights jurisprudence. Though the names of the two respondents have been kept confidential, but the nature of the violations of the Accord has been made published. It is still uncertain how Bangladesh Accord or similar arrangements will work in Bangladesh, but the accord has already set an example of creating human rights obligations in a different way.

In a country like Bangladesh where the incidents like Rana Plaza collapse do not attract sufficient remedies from the domestic judicial institutions, the arrangements like Bangladesh Accord provided the alternative source of obligations for the all the parties involved in this industry. It is certain that the arbitration award at the PCA will impact the international human rights law regime very profoundly. We need to wait till the first half of 2018 to see the final outcome and implications thereof. The successful completion of the arbitrations will not only be an example of implementing the labour rights of RMG sector in Bangladesh but also be considered as a milestone of the human rights obligation of the non-state actors all over the world.