Bangladesh offers opportunities for investment under its liberalized Industrial Policy and export-oriented, private sector-led growth strategy. All but four sectors are open for private investment in Bangladesh.

Good Business Practices

The discussions on corporate social responsibility (CSR) practices in Bangladesh in its modern global terms are relatively new, but being part of the global market it is difficult to ignore CSR standards specifically in the export sector. In general it is true that in Bangladesh the status of labor rights practices, environmental management and transparency in corporate governance are not satisfactory, largely due to poor enforcement of existing laws and inadequate pressure from civil society and interest groups.

The Netherlands encourages the business community to respect human rights. The aim is to prevent companies from abusing human rights either directly or within supply chains. In the National Action Plan on Business and Human Rights the Dutch government puts the United Nations Guiding Principles on Business and Human Rights into practice. The Action Plan sets out existing policy and describes the additional steps it is taking or plans to take. The guiding principle is that businesses have a social responsibility to apply the same human rights norms both in the Netherlands and elsewhere, in particular in countries where legislation or enforcement falls short.

Corruption and corporate governance challenges

A large regulatory burden is often associated with corruption, involving payments to inspectors who visit firms or to officials who grant permits. This form of corruption is known as ‘speed money’ in Bangladesh. Reports of corruption in the awarding of public and private tenders are also frequent. Meanwhile, the capacity of the state to govern and to deliver services has deteriorated. Public institutions are not accountable for their performance. Civil servants face weak incentives and little in the way of checks and balances.

Companies that would like to do business in Bangladesh are likely to encounter regulatory hassle and compliance problems. Registering a company and getting the required licenses in place usually takes more time than indicated in the guidelines from the authorities. Unfortunately, the most important institutions for providing facilitation for foreign businesses are known for “unofficial” practices and for delaying the process if their bribe demands are rejected. On-going programs work directly with these institutions to facilitate business, but there is still a long way to go. Firms view Bangladesh’s uneven regulatory environment as a serious deterrent to doing business here.

Overview of different programs / initiatives on CSR guidelines

The following sources provide more information on strategic corporate social responsibility and how to appropriately deal with CSR in Bangladesh.

OECD Guidelines on Corporate Social Responsibility
The OECD Guidelines are recommendations on CSR addressed by 44 Governments (including the Netherlands) to their multinational enterprises. The OECD Guidelines cover a broad range of issues, including: due diligence in the supply chain; disclosure; human rights; employment and industrial relations; environment; combating bribery; consumer interests; science and technology; competition; and taxation. Compliance with the guidelines is voluntary. The guidelines have been incorporated into a CSR policy tool which aims to help gain insight into business CSR activities, assess its value and determine what other CSR activities the business would like to employ.

Transparency International
Transparency International aims to stop corruption and promote transparency, accountability and integrity at all levels and across all sectors of society. Through more than 100 national chapters worldwide and an international secretariat in Berlin, they work with partners in government, business and civil society to put effective measures in place to tackle corruption.

Global Compact
The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption. By doing so, business can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere.

Business Social Compliance Initiative
The Business Social Compliance Initiative (BSCI) was established by the Bangladesh Foreign Trade Association (FTA)  in order to create consistency and harmonization for companies wanting to improve their social compliance in the global supply chain.

ILO Better Work Program
The Better Work Program is a unique partnership between the International Labor Organization (ILO) and the International Finance Corporation (IFC). The program assists enterprises improve practices based on core ILO labor standards and national labor law.

Dutch Sustainable Growth Coalition (in Dutch)
The Members of the Dutch Sustainable Growth Coalition (DSGC) share their unique good practices about integration of sustainable growth business models. The coalition brings together Unilever, DSM, AkzoNobel, FrieslandCampina, Philips, Shell, KLM and Heineken.