How social ties influence metal resource flows in the Bangladesh ship recycling industry
Introduction
The field of industrial ecology tends to focus on technical factors driving the flow of materials through industrial systems. However, social factors (such as how communities influence these flows) can be equally critical to improving the sustainability of industrial systems (Ehrenfeld and Gertler, 1997, Cohen-Rosenthal, 2000, Gibbs, 2003, Hoffman, 2003, Boons and Janssen, 2004, Asim et al., 2012, Boons and Spekkink, 2012, Umair et al., 2015). While economic factors such as minimized transaction costs, sales of by-products, and reduced waste removal costs can motivate firm owners to participate in a clustering of industries, Ehrenfeld and Gertler (1997) argued that other factors such as risk of discontinuity, cost of standby supplies, insufficient information flows, distrust and opportunistic behavior may overwhelm the benefits and obstruct cluster participation. Therefore, the subtle interaction of financial gain and a sense of community is critical for building and maintaining industrial clusters, where business competitiveness is partially mitigated by cooperation and collaboration (Ehrenfeld and Gertler, 1997, Nadvi, 1999a, Nadvi, 1999b, Cohen-Rosenthal, 2000). This social component is developed over time, preconditioned by broad social arrangements that require maintenance to support the formative process of industrial clusters (Gibbs, 2003, Ashton, 2008, Howard-Grenville and Paquin, 2008, Paquin and Howard-Grenville, 2009).
In an industrial surgical cluster in Pakistan, Nadvi (1999b) showed that social networks moderated the level of competition among firms. Superficially, firm owners who exchanged materials appeared to adhere to a competitive mentality, illustrated by a statement from a businessman that ‘business is business, family is family’ (Nadvi, 1999b). However, a tradition of mutualistic information flow regarding market demand and supply of raw materials provided benefits of ‘joint action’ and reduced the risk of loss. Likewise, the industrial cluster in Kalundborg, Denmark continues to demonstrate the importance of a social network through a club that encourages familiarity among managers, facilitating business interactions (Boons and Janssen, 2004). Conversely, a top-down approach to building industrial networks by clustering firms has not proved effective. Chertow and Ashton (2009) found that in Puerto Rico, arranging firms to be spatially adjacent was not sufficient for cluster formation, as proximity did not intensify the firm level communication necessary to facilitate forward and backward linkages of by-products and wastes (Chertow and Ashton, 2009). The critical element of social ties (facilitating communication) in industrial clusters in Pakistan and Denmark was missing in Puerto Rico, demonstrating the need for a ‘thick web’ of social connections among firm managers.
A growing number of studies have considered how resource flows are influenced by social components (Nadvi, 1999b; Boons and Jansen, 2004; Doménech and Davies, 2011; Asim et al., 2012, Boons and Spekkink, 2012; Chertow and Ashton, 2009). For example, Doménech and Davies (2011) applied social network analysis to evaluate the social aspects of two renowned case studies, Kalundborg (Denmark) and the National Industrial Symbiosis Programme (NISP) (UK). Here, we add to this growing collection of case studies focused on the embedded social relationships, which influence the flow of recycled metal in the ship recycling industry in Bangladesh.
Social embeddedness refers to a social context where individuals abide by certain rules developed over time through long-term reciprocity and exchanges (Uzzi, 1997, Boons and Howard-Grenville, 2009). This context provides three main benefits. First, social connections produce good will, confidence, reciprocity and trust through long-term interdependence. Second, connectedness minimizes destructive opportunism through a fear of seclusion from the community. Finally, connectedness encourages the transfer of knowledge and skills to the next generation (Nadvi, 1999b). Game theory, prisoner's dilemma, and social choice theory all suggest that increased dialog among actors may lead to socially optimum decision making, and pressure to participate in activities that serve only collective interests (Alexander and Skyrms, 1999, Desrochers, 2001, Boons and Janssen, 2004). The management of common pool resources is one example where people exemplify a cooperative mentality that maximizes resource productivity at the group level (Ostrom et al., 1999).
The influence of social embeddedness on industrial activity is likely to vary across firms and depend upon existing network layers (Hewes and Lyons, 2008, Chertow and Ashton, 2009). The extent to which these networks influence decision making processes in the community matters. Chertow and Ashton (2009) considered five aspects of embeddedness related to cluster formation: each individual's understanding level among others in the community as described by Ehrenfeld and Gertler (1997) as ‘short mental distance’ (the cognitive element; see also Ashton and Bain, 2012); social norms and values regarding cooperation (the cultural element); the frequency of interpersonal transactions (the structural element); the process of power center formation (the political element); and proximity of the firms in the cluster and historical identity of the community (the spatial and temporal elements).
Here we focus on resource flows and social connections simultaneously in the Bangladesh ship recycling industry. The international ship recycling industry, while praised for its contribution to closing the loop in metals resources, demands a closer inspection in how the metal scrap is managed by local actors (Lyons et al., 2009, Sarraf, 2010). Industrial ecology can improve local environmental conditions, but only if social networks and impacts are taken into account (Asim et al., 2012, Umair et al., 2015). We explore why resources from ship breaking yards in Chittagong are transferred to Old Dhaka, around three hundred kilometers away. Thousands of small and medium firms have developed in Old Dhaka to process scrap metal, and the area is now famous for highly specialized knowledge and skill, along with unique social and cultural attributes. We hypothesize that it is the close social network (based on cultural identity) among businesses, and other forms of social embeddedness, that maintain the powerful draw of metal scrap resources toward Dhaka. We expect that both the network and the available resources work together to maintain the self-organized, diverse, and productive recycling cluster that transforms the scrap into products in high demand.
Section snippets
Study sites
The ship breaking and recycling industry in Bangladesh decomposes end-of-life ships into steel and other engineered products for domestic consumers, recycling every part of the hull and machinery (Sarraf, 2010). The activity started in Chittagong when a ship was stranded on the beach after a cyclone in the 1960s. Stuck in the sand, the aged ship was economically infeasible to recover and remained there for years before it was scavenged by locals. During the independence war in 1971, a few
Methods
To understand the relationship between social embeddedness and resource flows, we used a questionnaire with a mixture of closed- and open-ended questions, verbally delivered to several representative groups: businessmen in the metal working industry (shop owners, metal traders/middle men, shipbreaking yard supervisors); workers and day laborers; and local people. Local people were those who live in the locality but were not involved in this business and worked in other professions such as
Resource distribution
Fig. 2 shows the distribution of the materials recovered from the ships and the agents involved in the flows. For example, the Bhatiary markets focus on engines and parts, kitchen equipment and furniture salvaged from the ships involving traders who buy and sell the scraps across the country. Nonferrous scraps such as furniture, boards, lifeboats, kitchen equipment, and domestic equipment (such as light fixtures) are directly sold to end users through the small and medium enterprises with
Conclusions
Similar to previously reported cases of successful industrial clustering, business relations have developed in Bangladesh based on a delicate balance of business competition and tight knit social ties. In this society, some of the relationships within the network are more socially embedded than others (among same stage versus different stages of the value chain), while others are more clearly based on market transactions. This provides a trustworthy platform within a small group and maintains
Acknowledgements
We would like to acknowledge all of the donors through Superior Ideas who made field data collection possible. We would also like to thank the many people in Chittagong and Dhaka who took the time to speak with SMMR, as well as two anonymous reviewers who greatly improved the manuscript.
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