The Rana Plaza disaster and the complicit behavior of elite NGOs

We do not know what NGOs do. Whoever works for NGOs, they are becoming rich. While NGOs receive money to help many victims, they distribute such fund only to two, three or five victims. Rest of the fund go to their pocket.

Rahima

Introduction

Rahima ¹ is one of the victims of the Rana Plaza collapse that occurred on 24 April 2013 in Savar, Dhaka, Bangladesh, in which at least 1135 clothing workers died and an estimated 2500 were injured (Star Business Report, 2016). During this catastrophic collapse, the Rana Plaza housed five local garment factories that were producing clothes for 31 Western multinational corporations (MNCs; Clean Cloth Campaign (CCC), 2015). It was the deadliest structural failure in modern history, which was followed by a chaotic rescue operation due to a huge shortage of trained rescue workers and necessary equipment. This prolonged the victims’ suffering during and after the rescue process and led to enduring physical and psychological damage.

Since the Rana Plaza collapse, Rahima has spent much of her time at home as her spinal column is fitted with a stainless steel rod. She can hardly sit, sleep, or walk; when she does walk, she has to stop after a few minutes to rest. The rod in her back cannot be removed as the fracture is severe and unrecoverable. On our first meeting, at the end of 2014, Rahima told me her story:

I came to Dhaka in 2002. I got a job in a garment factory through my cousin for 750 taka (US$9) per month. I was very young back then [13 years old]. So they did not want to hire me. They hired me at a garment factory called [Factory X]. It was tough for me to go on with 750 taka. I only thought of how much I will send home and what I will eat. Despite that I was a strongminded person. There was a guy who taught me work. He told me to learn. I learned from him and then after three months I took a job at [Factory Y]. I started there in March. One year later, I got married and then I moved into my husband’s home. Thereafter, I had a child. At that time, I did the household chores in my husband’s home and took care of my child. In 2009, I got separated from him because he married another woman. Again in 2009, I took a job in Rana Plaza. Since I was a child, I’ve been like that. I’ve never spread my hands before someone and begged for anything. Even after losing my husband, I never went to my father or brother.

When I asked Rahima how much money she received as compensation from the Bangladeshi government, non-governmental organizations (NGOs), or other sources, such as MNCs, she told me,

A foreign organization gave 10,000 taka (US$126) on our bKash number [‘bKash’ is the name of BRAC Bank’s mobile banking service]. I just got that money. I received 15,000 taka (US$189) when I was admitted at the medical center. I received another 15,000 taka from an [MNC]. And I received training [how to operate the swing machine] for free. I did not receive any compensation.

In total, Rahima received 40,000 taka (US$504) from various organizations who temporarily supported victims. In addition, she was given training by an NGO. Ironically, this training was of no use to her, as her injury means that she is not able to work. She added,

Twenty months, almost two years, have passed but no one keeps the track of where we are now. Our situation is worsening as the days are passing by. Most of the victims receive their treatment and stay at their home because of their sickness. Physical-mental distress, anguish for the future of my child keeps me awake.

When I asked Rahima what had happened to the foreign funds (the one NGOs and the Bangladeshi government received from MNCs to compensate the victims), she replied,

I heard that some victims received 40,000 taka, 60,000 taka (US$756) or 40% of total compensation. I also heard that a lot of foreign help came. But no one received any compensation as the newspapers described. Not even one third of it. The government is now saying those help did not come to compensate the Rana Plaza victims … The victims who died, their family received [most money]. But the victims who were wounded—some were less injured, some were severely injured—the compensation which should have been given was not given.

During a telephone call in April 2015, just before the second anniversary of the Rana Plaza collapse, Rahima was very angry. She had received a letter informing her that she would not receive any compensation except the figures mentioned earlier. She told me, ‘The statement I had for compensation shows no money in my account. They want to close this account. They are saying they have paid all the compensation’. The letter had been sent to her by the Rana Plaza Coordination Committee (RPCC), which oversaw the distribution of compensation. The RPCC is a multi-stakeholder-based arrangement, which includes the likes of the International Labor Organization (ILO), representatives from the Bangladeshi government, the Bangladesh Garment Manufacturers and Exporters Association, MNCs such as Primark, Western and Bangladeshi NGOs (see the full list of RPCC members at http://ranaplaza-arrangement.org/ ). RPCC (n.d.-a) also allocated certain task such as medical care arrangements for seriously injured claimants to NGOs such as BRAC.

Rahima was particularly angry about the role Bangladeshi NGOs and MNCs played: ‘NGOs that are working in Bangladesh to help victims, they provided us with 10, 20 or 50 thousand taka [US$126, US$252 or US$630] and kept the rest of the compensation money to become rich’. She further added,

Although it is a buyer’s duty to look after us, when we have worked 24 hours, day and night for them, they do not bother to find out whether we are alive or dead … If the firms had arranged to transfer the compensation directly to us then we might have received some funds.

I inquired about what she wanted to do now, given her situation. She answered,

If I received the compensation I could go back to my village and rent some land and get two harvests a year. I could have opened up a poultry farm and earned something. But I cannot do anything because I do not have any money.

She concluded,

I am even worse off now than if I were dead. The ones who died have left, but I am wounded, my condition is miserable. My life is over, if I were healthy I could do something and bring up my daughter. But I am disabled now. No one did anything for me.

The role of elite NGOs in the process of Rana Plaza victim compensation

I decided to conduct research on Rana Plaza because I became increasingly aware of the misery that the collapse of the building had caused to the victims (see also Chowdhury, 2017). I began my fieldwork in December 2014 looking at various reports and newspaper articles (e.g. Butler, 2014; CCC, 2013; Centre for Policy Dialogue (CPD), 2013) and talked with many victims—including Rahima—alongside rescuers, government and NGO officials, MNC representatives, and local suppliers. I first interviewed Rahima, then had the opportunity to meet her in person twice more, and spoke to her a further seven times over the phone. Her viewpoint sheds light on facts of which the (international) public and research community are unaware, as victims do not usually have access to the media. In fact, since the Rana Plaza collapse, it is clear that different NGOs were in control of the distribution of compensation funds. If the accident had happened in the West, victims would have had a say in the compensation process through their lawyers. They would have had to give permission to subcontracting parties to claim compensation on their behalf. In the case of Bangladesh, however, it seemed obvious that large NGOs would secure the contracts from MNCs for managing the compensation to the victims. Thus, Rahima’s voice provides us with a ground level reality which otherwise would never have come into light.

When I embarked upon my fieldwork, I was struck by the fact that RPCC were failing to compensate and rehabilitate the victims (Star Business Report, 2015a). Some of the MNCs, such as Cato, Children’s Place, Walmart, and Benetton, had long denied any involvement with the production facilities at Rana Plaza (Greenhouse, 2013, 2014; Kazmin, 2015), while the CCC (2015) was reporting that these MNCs had indeed been operating there. Children’s Place, for instance, emphasized that it had previously produced in Rana Plaza, but it did not have any production there when the building collapsed (Greenhouse, 2014). Benetton later accepted that it made an order in Rana Plaza when its labels were found in the wreckage (Greenhouse, 2013). Therefore, Benetton’s denial, for instance, was slightly different than Children’s Place. Contrarily, Walmart claimed that it had a contract with a supplier, which, without informing the Walmart, had subcontracted another factory in Rana Plaza (Greenhouse, 2014; Mosk, 2013). Such a claim was not new on the part of Walmart, as the firm made a similar statement in 2012 after a major fire incident at Tazreen Fashion factory in Ashulia, Dhaka, Bangladesh, which killed at least 117 and injured 200 (Ahmed, 2012). It appeared that some MNCs had not taken any measures to stop unsolicited subcontracting, which they claim to be a major problem in their global supply chains.

Immediately after the Rana Plaza collapse, the Accord on Fire and Building Safety in Bangladesh (hereafter, the Accord) and the Alliance for Bangladesh Worker Safety (hereafter, the Alliance) were formed to monitor suppliers’ facilities for 5 years, so that such a catastrophe could not happen again. Most signatories of the Accord were European retailers, with a few Asian and US retailers also listed (see the full list at http://bangladeshaccord.org/signatories/). The Accord also included representatives of ILO, NGOs such as CCC, and selected Western and Bangladeshi trade unions. The Alliance consisted of US retailers (see the full list at http://www.bangladeshworkersafety.org/who-we-are/membership). The Alliance also comprised other representatives such as Bangladeshi and Western policymakers and NGOs such as BRAC. Despite their unique nature, that is their bringing together of various organizations as members, both the Accord and the Alliance can be considered as NGOs because their functionalities are voluntary in nature and they pursue non-profit activities. Since 2013, they had their own office in prominent locations of Dhaka and have employed personnel to run organizational activities to ensure workers’ safety. The whole process of forming the Accord or the Alliance seems ironic, as the move to compensate the victims had proven an extremely slow process (Muhammad, 2015b).

The RPCC—including some of the same members as the Accord and the Alliance, such as ILO, CCC, BRAC, and Primark—was in charge of compensation, but had not stipulated the need for a legally binding contract to determine the criteria governing how much MNCs should pay in compensation, or what roles Bangladeshi NGOs could play in the process. The payment of compensation by MNCs to the Rana Plaza Donors Trust Fund (RPDTF) was treated as a voluntary initiative (RPCC, n.d.-b): no enforceable legal framework for compensation was established (Star Business Report, 2015b). Most worryingly, MNCs subcontracted the compensation and rehabilitation of Rana Plaza victims to elite Bangladeshi NGOs. While RPCC state that some of the funds they received from MNCs were given as part of the RPDTF, several MNCs—such as Asda, Gap, and Walmart—made direct payments to BRAC USA, an affiliate of BRAC Bangladesh (RPCC, n.d.-c). Although not mentioned on RPCC’s website, other MNCs such as Matalan and Benetton contributed to BRAC’s fund for compensation and rehabilitation (Butler, 2014). Likewise, C&A subcontracted Cartias for compensation and rehabilitation (CCC, 2013). Primark collaborated with BRAC Bank (an affiliate of BRAC), Caritas and the Catholic Church of Bangladesh to assist victims (Quelch, and Rodriguez, 2015).

In the light of dominant role of elite NGOs in compensation and rehabilitation, Rahima’s views emphatically initiate a debate around the agenda of elite NGOs. In the Western world, elite NGOs are commonly seen as the saviors of the poor (The Economist, 2012; Yunus and Jolis, 1998). This perception helped the Grameen Bank to win the Nobel Peace Prize in 2006. Elite NGOs are also in close relationships with international actors (Stiles, 2002). They claim to have the necessary infrastructure and expertise to serve victims (Gauri and Galef, 2005). Thus, the ILO, for instance, did not raise any concerns about MNCs transferring the duty of distributing compensation or rehabilitating the victims to elite NGOs.

I argue that the elite NGOs failed to serve victims like Rahima. I define elite NGOs as those organizations—such as BRAC and Bangladesh Institute of Labor Studies (BILS)—that are formed by influential individuals, funded by Western donor agencies, and run as dominant organizations, controlling resources and processes directly. By Guha’s (1997) terms, such manifestation of direct power can be defined as dominance without hegemony because in such situations NGOs no longer need to concentrate on manipulating politics or culture: economically they are in direct control of the lives of others. Far from representing victims’ rights, their role rather facilitated a one-sided and unfair process in which the victims had no access to legal representation and were denied a voice in the compensation and rehabilitation process. More broadly, their complicity with MNCs fosters a neoliberal global order that violates workers’ rights in countries such as Bangladesh and hampers the enforcement of workers’ rights in developing countries. To better understand elite NGOs, I will now briefly discuss their role in Bangladesh.

Elite NGOs in Bangladesh

NGOs first emerged in Bangladesh in the 1970s to run small operations around natural disaster management such as relief programs or cyclone/hurricane management, and microcredit programs. They were funded by individuals belonging to the upper class and with international connections. For example, BRAC—currently considered to be world’s largest NGO based on the number of employees—was formed by Fazle Abed, who was a former employee of Shell UK. The Grameen Bank was formed by Professor Muhammad Yunus, who came from a wealthy family and was trained in economics in the United States. Most of the elite NGOs in Bangladesh were founded in the 1970s (Muhammad, 2015a). In the following decades, consistently funded by foreign donors and large aid agencies, NGOs became increasingly involved in a broader range of development activities, including sectors such as education and healthcare (Stiles, 2002).

While MNCs in Bangladesh became stronger in the name of poverty alleviation, some NGOs became larger and more influential and even came to act like a shadow state (Gregson and Ferdous, 2015; Karim, 2011). A study published in the mid-1990s revealed that 60% of foreign funds are controlled by eight elite NGOs, namely BRAC, Proshika, CARITAS, CCDB, ASA, Gano Shahajya Sangstha, Nijera Kori, and Ganoshasthya Kendro (World Bank, 1996 cited in Karim, 2001: 96). This made the elite NGOs extremely powerful. A study conducted in 12 districts in Bangladesh that were affected by Cyclone Sidr in 2007 shows that elite NGOs such as BRAC, the Grameen Bank, and ASA forced Sidr-affected microcredit borrowers to sell off the relief materials to repay existing loans (Pasha et al., 2008 cited in Muhammad, 2009). These borrowers were also forced to spend the government-provided housing compensation package to repay their loans. Instead of receiving any break to repay their loans, they fell victim to harassment and were thrown into further misery by elite NGOs.

These elite NGOs use their influence to mobilize neoliberal ideas such as privatization, deregulation, and free trade (Lewis, 1994; Osmany, 1989). As intermediaries of foreign donors (Alesina and Dollar, 2000), they exercise economic, political, and cultural manipulation through development activities such as microfinance so that the free-market ideology prevails and minimal regulation is implemented (Ferguson, 1994; Fernando, 2005; Karim, 2001, 2008, 2011). It has been argued that NGO activities reduce the influence of a government over time (Haque, 2002; Hardt and Negari, 2000), and this enables MNCs to maximize their profits due to the weakened institutional context (Chang, 2007). The neoliberal ideology is clearly reflected in Yunus and Jolis’ (1998) statement:

I believe that ‘government’, as we know it today, should pull out of most things except for law enforcement and justice, national defense and foreign policy, and let the private sector, a ‘Grameenised private sector’, a social-consciousness-driven private sector, take over their other functions. (p. 214)

The ultimate result of all this is that NGOs expand their network through development programs (Fernando, 2005; Karim, 2011; Rahman, 2001) as well as through corporate ventures (Mannan, 2009; Muhammad, 2009; White, 1999). For example, BRAC runs banks, universities, hotels, restaurants, and other business ventures under the guise of charity activities. This significant corporate operation helps BRAC to dominate various key sectors, and this is beneficial for MNCs as NGOs bring local expertise that helps them expand their products and services (Khan et al., 2010; Muhammad, 2009). It also allows NGOs to secure funds that they could not otherwise access: for example, BRAC USA has received significant funds from Western retailers to assist the Rana Plaza victims (RPCC, n.d.-c). This funding gives NGOs direct control over every aspect of the lives of the poor, ranging from poverty alleviation to the management of victimhood.

Manifestation of the power of elite NGOs in the aftermath of the Rana Plaza collapse and its implications

Elite NGOs’ involvement in the compensation process turned out to be advantageous to MNCs and provided elite NGOs direct power to control necessary resources. First, the victims became heavily dependent on elite NGOs for compensation and rehabilitation since these NGOs controlled various aspects of these processes, which meant that the victims lost their voice on the ground (see reports of CCC, 2013; CPD, 2013 which indicate the involvement of various NGOs in the compensation and rehabilitation processes). From the MNCs’ perspective, the main advantage was that they could distance themselves from the process of compensation and rehabilitation, as they had subcontracted elite NGOs. While MNCs are mostly known for subcontracting manufacturing capabilities, here it is evident that MNCs actually use subcontracting as an integral part of their overall business strategy, so that they spend minimal resources and time in fulfilling moral responsibility. The implication of this business strategy is that MNCs now outsource not only manufacturing but also moral responsibility, through subcontracting—which in short I call ‘subcontracting of morality’. It means they do not directly become responsible for any failure, injustice, or corruption that occurs due to their involvement in a global supply chain. Second, I argue that elite NGOs helped MNCs to sideline the issue of compensation and rehabilitation by facilitating the formation of the Accord and the Alliance. One NGO official with whom I spoke privately was proud of his/her gatekeeping role as he/she believed no one could dispute how well the elite NGOs had contributed to the formation of an alternative discourse in the form of such organizations as the Accord. He/she emphasized, ‘If [the elite] NGOs refused the idea of the Accord, MNCs would find themselves in a difficult situation. They might have ended up taking the direct responsibilities to serve the victims’. However, in this context, elite NGOs chose to cooperate with MNCs, which in effect helps them to maintain dominance without hegemony over the victims.

Although an advantageous situation for MNCs, various negative consequences arose from the elite NGOs’ involvement in the process of compensation and rehabilitation. Rahima is one example of this. Her physical suffering was not visible as her back was fitted with a rod, and the invisibility of her injury meant that she received virtually no compensation. When she repeatedly visited a few elite NGOs to discuss her physical disability, they neither re-assessed her case nor attempted to liaise with a member of RPCC to address her concerns. In one of our meetings, Rahima told me sadly that if she had lost a limb, such as a hand or a leg, at least she might have received a better compensation package. The NGO officials who dealt with her queries may not have had the expertise to understand such medical issues or the ability to (re-)assess victims’ conditions, but in that case it is reasonable to ask why those NGOs took on the task of rehabilitating and advising victims about their medical conditions in the first place.

Since the elite NGOs took funds from MNCs, they wanted to cooperate with them. To this end, they first systematically silenced the victims and second deterred victims from resisting the MNCs. The victims were hoping to receive compensation and rehabilitation, and so they were very reluctant to confront the elite NGOs. Normally, hope generates enthusiasm and optimism; it often contributes to the healing process and produces positive outcomes such as happiness and confidence (Snyder, 2000, 2002). However, hope is obviously not sufficient to obtain positive outcomes in every context. The victims hoped to receive compensation, and they thought they might lose it if they became involved in disputes with the elite NGOs. Here, then, hope transformed into fear. The victims became fearful as they were well aware of the NGOs’ power and capacity for domination. These were visible, for instance, in their permanent or temporary offices in Savar, the luxury vehicles used by their executives, the NGOs’ connections with government officials and MNCs, the employment of NGO workers to deal with and monitor the victims, the withholding of valuable information, and the gatekeeping role played by field-level NGO workers. For example, I observed how Rahima went to a field-level NGO worker to ask for the office address of a high-ranking official in an NGO. She wanted to talk about her compensation, as the high-ranking official had once promised Rahima that she could push her case forward by meeting him. After spending an hour arguing with the field-level worker, Rahima realized that the meeting had been offered merely to comfort her during that visit. At that moment, Rahima became frustrated about her situation and ended the argument with the field worker. Later, the field worker told me that he could not do much because he did not have any power to change Rahima’s situation. As a low-ranking NGO worker, if he sent Rahima to the high-ranking colleague, he would rebuke him. This particular interaction between Rahima and an NGO official and Rahima’s accounts with regard to compensation indicate that NGOs know very well how to use mechanisms such as hope to keep victims waiting for their demands to be met. Although Rahima was furious about her treatment at the hands of the NGO officials, which she found deceptive in nature, she did want to make the NGO officials angry by saying anything offensive. Rahima believed that NGOs would restrict her compensation if she lodged her complaints.

Rahima was dependent on compensation as her disability did not allow her to secure work and an income. This meant that she was forced to accept the inhumane treatment she received from the NGOs. Rahima even accepted insults as she hoped to receive compensation at every step of her engagement with the elite NGOs. Ironically, it is important to stress that the victims expected compensation as it was their fundamental rights to receive it. Rahima and others were ashamed of their situation, as they had to approach NGO officials repeatedly to ask for their compensation. Yet, asking for money is strongly stigmatizing, as only people who are poor beg for money. Having to beg for her compensation was devastating for Rahima, who had always seen herself as a self-sufficient person, and her confidence and self-esteem were thoroughly tarnished by the process of hoping for compensation.

The erosion of workers’ rights and a way to fight injustice

Historically, NGOs used to put pressure on MNCs on various social concerns and sources of injustice (Laasonen et al., 2012). Unfortunately, this trend is in decline since neoliberal forces came into action (Laasonen et al., 2012). Over the last decade, it has been observed that MNCs are more willing to collaborate with NGOs, rather than confronting them (Kourula and Laasonen, 2010). This is particularly applicable for Bangladesh where Western MNCs were seeking assistance from intermediaries to make the neoliberal processes faster and therefore market expansion plausible in a short period of time (Fernando, 2005; Muhammad, 2015a). However, despite a few exceptions (e.g. Contu and Girei, 2014; Khan et al., 2010), management scholars largely see value in MNC–NGO collaboration (e.g. Doh, 2008; Teegen et al., 2004). They argue that such collaboration creates an efficiency or cost minimization to solve social problems. Accordingly, in the case of Bangladesh, Mair et al. (2012) have depicted BRAC as an agent of social change and claim that its activities had a significant positive impact on the poor in Bangladesh. More specifically, over the aftermath of the Rana Plaza collapse, Reinecke and Donaghey (2015) have claimed that the Accord is a new form of institution that brings positive change to the lives of workers in Bangladesh.

However, Rahima’s testimony suggests a different role for voluntary initiatives in Bangladesh and the elite NGOs co-opted into them. From her perspective, the latter are neither saviors of marginalized workers nor agents of change fighting to curb injustice. Rather, elite NGOs’ dependency on donors and MNCs, and their dominant position in Bangladesh society, leads to an accountability skewed toward donors and MNCs (cf. Khan, 2003; Mir and Bala, 2015). It also leads to a transparency void, as MNCs can easily hide away through subcontracting, third-party agreements, and multi-level, hybrid, or complex outsourcing so that there are always intermediaries who can be used as a scapegoat. While elite NGOs may be well aware of this lack of transparency, they act as the complicit support agents for donors and MNCs. In this sense, the prominent role elite NGOs play in the relationship between MNCs and Bangladeshi society erodes workers’ rights rather than supporting them. This role ultimately contributes to fortifying the neoliberal global order in developing countries.

The Accord, itself a kind of elite NGO, is also heavily influenced by dominant actors, particularly MNCs. Therefore, it is difficult to convince low-paid workers that it is protecting their interests (Muhammad 2015c; Rahman, 2014; Siddiqi, 2015). Workers are still paid at the lowest rate—US$68 per month (Kazmin and Mallet, 2015)—and conditions are inhumane (Hunter, 2015). As soon as the Accord expires, there is no guarantee that Bangladeshi suppliers will maintain its recommended safety procedures. Hence, the Accord does not improve workers’ rights (Sinkovics et al., 2016); it merely reinforces and expands MNCs’ power and helps improve their image. MNCs use such platforms as public relations tools and change hardly any aspect of their behavior or organizational structure to be part of the Accord.

Conclusion

The erosion of workers’ rights will continue and the neoliberal global order will be strengthened in deprived communities unless the complicit behavior of resource-dependent elite NGOs is prevented. Powerful donors and MNCs do not function in a vacuum in developing countries; they succeed because elite local agents collaborate with them to fulfill neoliberal agendas by violating poor workers’ human rights. Henceforth, while it is important to scrutinize the behavior of MNCs and their policies, it is even more important to study critically the functionalities of locally embedded elite agents. This is because, in the end, the collective force of global and local elite actors dominates over marginalized workers in developing countries. Rahima’s voice as highlighted here will hopefully encourage management scholars to rethink and redesign the future studies on elite NGOs and their interaction with MNCs and government agencies.

If the elite NGOs are not the entities to help victims in Bangladesh, then, who is? What is to be done if the NGO-centric solution is not possible? Answering these questions is not simple. Obviously, developing democratic and representative institutions through structural change is one potential means of solving long-lasting societal problems (Eagleton, 1999). However, this solution is complex and time-consuming and needs to be free of elite-centric influence (Ferguson, 1994). Furthermore, as elite NGOs are connected through global platforms and alliances and influenced by foreign donors, there is little incentive to effect these changes (INCITE!, 2007). Consequently, the task of making ordinary people aware of their fundamental rights is left to grassroots organizations, activists, and academics. From the perspective of organization and management studies, I argue that one key task is to conduct research on elite NGOs and their problematic relationship with MNCs in developing countries. More specifically, researchers need to find novel mechanisms so that MNCs do not brutally exploit poor workers through subcontracting. As I have shown that subcontracting is used not only for economic gain but also for subcontracting morality, such issues require urgent attention. In the end, it is a shameful and shocking situation that victims like Rahima have been suffering for so long and so profoundly, but yet, in the last 4 years, no elite actors have become responsible through the legal framework, other than the owner of the building: Rana, who was the easiest scapegoat, is awaiting a trial. While unprecedented levels of moral violation of victims’ rights have occurred since the Rana Plaza collapse, Rahima remains a symbol of injustice and a constant reminder for us of how easily elite actors can escape moral orientation and legal consequences in developing countries.