Months After the Bangladesh Clothing Factory Disaster, It's Still Not Clear Who's Going to Pay the Victims

Walmart and Benetton ducked a meeting in Geneva today on restitution.
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Rescuers carrying out one of the survivors from the collapsed building in Bangladesh. (PHOTO: SHARAT CHOWDHURY/WIKIMEDIA COMMONS)

Rescuers carrying out one of the survivors from the collapsed building in Bangladesh. (PHOTO: SHARAT CHOWDHURY/WIKIMEDIA COMMONS)

Following the Rana Plaza clothing factory disaster back in late April, we reached out to some experts to understand the state of the debate over how factories like Rana Plaza could be safer. (See: "Should We Retire the Word 'Sweatshop'?") Most of the people we spoke with argued against the system that exists today, which largely depends on industries like apparel policing themselves. Surprisingly, the key flaw in that system isn't that whole industries would protect themselves—internal competition is fierce, and there might well be incentive for manufacturers to rat each other out for unsafe practices.

The problem with so-called corporate social responsibility (CSR) systems, as University of Illinois-Chicago professor of management Abagail McWilliams told us at the time, was the remoteness of the information from the people making the decisions. CSR, she said, "is a very local concept."

Most of the people we spoke with argued against the system that exists today, which largely depends on industries like apparel policing themselves.

“It’s responding to the stakeholders that I’m aware of.” In the case of a sweatshop across the world, she argued, a retailer's biggest stakeholders are its customers and its investors. “If those stakeholders don’t see it, I don’t have to worry about it yet.” Even if you're opening yourself up to dangerous attacks from more responsible rivals, if your stockholders aren't seeing that risk, you aren't inclined to tell them.

Six months later that critique is looking right on the mark. Today in Geneva the International Labor Organization, a United Nations body, is holding meetings with several clothing retailers to discuss payments for victims and families of people hurt or killed in the Rana Plaza tragedy. The discussion also includes a previous case in Bangladesh, the Tazreen factory fire. The meetings were motivated largely by industry initiatives, anti-sweatshop NGOs, and the United Nations. But none of the activity has been compulsory, or resulted in any sort of actions required by Bangladeshi, European, American, or other international regulations.

So today's meeting, which the ILO is brokering, is completely voluntary. As will be compliance with any agreements that come out of it. Twelve companies with connections to the Bangladeshi factories have agreed to participate in the meeting today. More—20—have decided not to attend.

Reports Bangladesh's Financial Express, using language that appears taken from the Clean Clothes Campaign, and anti-sweatshop NGO:

The brands which agreed to attend the meetings are C&A (NL), El Corte Ingles (ES) and Karl Rieker (DE) to talk on Tazreen, and Bonmarche (UK), Camaieu (FR), Corte Inglais (ES), Inditex (ES), Loblaw (CA), Mascot (DK), Matalan (UK), Primark (UK) and Store Twenty One (UK) will discuss the case of Rana Plaza.

That list of 12 retailers who came to the table today includes Dutch, Spanish, German, British, French, and Canadian clothing concerns. The list of companies that had connections to the factories but have refused to participate in the discussion includes American clothing goliath Walmart. Spain's Mango, and Benetton of Italy are two other high-profile holdouts.

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