In December 2014, Clean Clothes Campaign Danmark and Aktive Forbrugere (Active Consumers) submitted a compliant to the Danish NCP regarding PWT Group A/S for failing to carry out due diligence in relation to its supplier, the textile manufacturer New Wave Style Ltd., which operated in Bangladeshs Rama Plaza building. The Rama Plaza building collapsed on 24 April 2013, killing 1,138 people and injuring more than 2,000 people. PWT through its relationship with New Style was responsible for monitoring its suppliers employment standards to ensure its operations complied with international human and labour rights standards. The complainants alleged that the company failed to carry out due diligence to ensure compliance with basic human rights and requested that in the future, PWT Group must take necessary measures to guarantee that similar cases as experienced in Rana Plaza do not happen elsewhere, by disclosing supplier lists to the public and ensuring transparency regarding its business practices by regularly publishing inspection reports from where their external production takes place.
Relevant OECD Guidelines
The Danish NCP accepted the case on 2 February 2015 and encouraged the parties to resolve the matter themselves, but as the parties did not wish to resolve it on their own, the Danish NCP completed its initial assessment and offered the parties mediation assisted by the NCP. Three mediation meetings were held, but the parties were unable to agree on a mediation agreement. The mediation process then ended in February 2016. The Danish NCP then announced it would conduct an actual investigation of the case on 17 March 2016. On 17 October 2016, the Danish NCP issued a final statement concluding that PWT Group had “violated the OECD Guidelines for Multinational Enterprises by failing to carry out due diligence in relation to its supplier”. However, the NCP stated it was not able to determine that the inspection of PWT Group’s suppliers’ building structures was an incorporated and established buyer practice at the time of the accident.
The Danish NCP recommended that PWT Group:
–Revises its management and risk assessment systems in order to meet due diligence
requirements in accordance with Chapter II of the OECD Guidelines;
–Ensure that the company’s CSR policy complies with the OECD Guidelines;
PWT Group is recommended to review its suppliers self-assessments in conjunction with an analysis of industry and country risks, and on this basis, select which circumstances are to be inspected;
–Report and communicate about these efforts and measures taken to prevent potential risks;
–Take efforts to systematically incorporate the company’s Code of Conduct into management and risk systems;
–Within one year, PWT Group should provide the NCP with a report on follow-up taken on these recommendations.
While the complainants were pleased that PWT Group was found to have breached its obligations to carry out due diligence in accordance to the OECD Guidelines, the complainants were not happy that the NPC was unable to determine that the inspection of building structures was an incorporated and established practice at the time of the accident and that PWT Group was not considered responsible for the collapse of the building, as the NCP stated “it has not been documented that an inspection would have identified the risks present in the building.”
The Danish NCP issued a follow-up statement on the 17 January 2018 stating that “through extensiveefforts and the additional initiatives planned, PWT Group has complied with recommendations of the NCP to such an extent that the final statement of 16 October 2016 can be removed from NCP’s website.” The NCP stated that PWT had provided information in October 2017 stating that they had revised their CSR policies in accordance with the Guidelines, that they had made changes to their risk management systems to ensure management oversight, and that they are systematically implementing its Code of Conduct among suppliers. Furthermore, PWT Group has engaged stakeholders in their revised CSR policies and have made public information on how to make complaints to the company and has established means to submit complains under the Bangladesh Accord.
Despite the progress made by PWT Group reported by the NCP, the complainants are concerned that one original recommendation made to by the NCP has not been adhered to yet. The NCP had recommended that the PWT Group should review its supplies self-assessment and “Report and communicate about these efforts and about the measures carried out by the supplier to prevent potential risks.” The NCP states that the company is working to improve its CSR communication, but provides no deadline as to when PWT Group must comply with this recommendation.
The NCP has now removed the final statement from its website and published PWT Group’s report, along with the NCP’s follow-up report.