A New Model Resolution System Under Enforceable Brand Agreements
By Lauriane Eudeline
In June 2020, a model dispute resolution system for labor issues arising in the textile supply chain was released.[1] After several industrial incidents such as the collapse of the building Rana Plaza in Bangladesh in 2013 and known breaches of labor rights in the textile industry, it was time to ensure labor rights and more importantly accountability from brands and suppliers. Four non-governmental organizations, namely The Clean Clothes Campaign, Global Labor Justice, International Labor Rights Forum and Worker Rights Consortium worked with global brands and produced the “Model Arbitration Clauses for the Resolution of disputes under enforceable brand agreements.”
Enforceable Brand Agreements or “EBAs” are initiatives meant to increase labor rights in the supply chain.[2] Corporate Social Responsibility initiatives in the supply chain barely managed to solve the labor rights issue as they did not involve any other actor and were based exclusively on the will of the brand. EBAs replace them and propose multi-actor mechanisms. Additionally, EBAs impose legally enforceable obligations that both suppliers and brands have to comply with. Examples of EBAs aiming at raising labor rights in the supply chain are “The Bangladesh Accord on Fire and Building Safety”, signed by 200 brands and by Bangladeshi Unions, which carries factory inspections and solves safety and rights complaints; “The oversight agreements between trade unions and employers in supply chain systems”, whose purpose is to provide binding arbitration for disputes arising under supply chain agreements; and “agreements on combating gender-based violence and harassment”, which establish a complaint mechanism to avoid gender violence and sexual harassment for workers of five large factories in Lesotho.
The model arbitration clauses are meant to offer a qualitative dispute resolution (fair, efficient and transparent) mechanism to EBAs. It appeared challenging to solve disputes under the EBAs when these agreements were first implemented. Therefore this model of arbitration clauses was needed. It is directly incorporable into the enforceable brand agreement and is inspired by international arbitration rules and existing supply-chain agreements. Since the proposed model is the first “edition”, it is meant to evolve but already contains and covers the choice of law, the choice of arbitrators, the seat of arbitration and location of hearings, the procedures and timelines governing arbitration proceedings, the potential remedies, the awards and their enforcement, the allocation of costs and fees and transparency and exceptions to transparency.
[1] Press Release ,International Labor Rights Forum “Four Major Civil Society Groups release Dispute Resolution System and Model Arbitration Clauses for Disputes arising under enforceable Brand Agreements”.
[2] Model Arbitration Clauses for the resolution of disputes under enforceable brand agreements, executive summary.