The casualty count topped 600 in Bangladesh this morning, more than a week after a textile manufacturing complex collapsed outside Dhaka. After an initial spate of weirdly detached debate, some concrete thinking on the challenges of preventing such tragedies has started to bubble. Take this morning’s Baltimore Sun:
Last year, a fire in one Bangladeshi factory that killed 112 people prompted the Walt Disney Co., the world’s largest licenser of branded merchandise manufactured abroad, to pull out of the country entirely in order to avoid negative publicity associated with its inhumane labor conditions.
…
Yet labor advocates in Bangladesh don’t want to see the companies leave, nor do they wish Western consumers to boycott the country’s products in protest. They fear that if more retailers followed the example of Disney, the country, already one of the poorest in the world, would lose its most valuable export market, estimated at more than $18 billion a year.
Instead, workers groups want the Western firms to commit to enforcing safety and construction codes at the factories where their products are made and to bear some of the costs of improving conditions there, such as installing sprinkler systems and fire escapes on buildings. Such common-sense precautions have long been taken for granted by manufacturers in the developed world.
What’s kept those codes from being in place before now? We called a couple of experts late last week to try and make sense of the problem.
For starters, no one’s really sure what the facts on the ground are. “The research is all over the place” on how to effectively regulate conditions ranging from shift lengths to environmental toxins, said Abagail McWilliams, a professor of Management at the University of Illinois-Chicago. McWilliams, an editor of the Oxford Handbook of Corporate Social Responsibility, teaches business ethics. “It comes to, who cares?” she said. “The right people have to care.”
American debate over factory conditions abroad tends to focus narrowly on wages, basic safety, and child labor. You can’t import clothes to the U.S. made by slave labor, for example.
But clothes coming out of the collapsed Bangladesh facility were, in theory, legal for sale in U.S. markets, and hadn’t caught human rights campaigners’ eyes especially—though the factory’s structural state would never have passed inspections in the U.S.
“So who cares in this case? In the case of worker safety, unions care,” said McWilliams.
Sweatshops are great political targets for unions, who have incentives to drive up the price of manufacturing abroad. And they have experience with issues like workplace safety, wages, and hours—rather than problems that might be more pressing abroad, like worker housing conditions, or factory structural risk. Better building inspectors is a rare union demand, at least compared to longer break times and higher wages.
The day before the Bangladesh disaster, the AFL/CIO had just released a report calling efforts to regulate U.S. companies’ overseas supply chains “20 years of failure.” From the report:
The recent deaths of more than 1,300 garment workers in fires in factories in Pakistan and Bangladesh that often were certified as compliant with labor standards are only the latest addition to the already substantial body of evidence that the certification and monitoring systems used by these initiatives cannot be relied on to deliver on even the most basic of goals: stopping entirely preventable deaths caused by factory owners’ negligence or outright refusal to observe the most basic of safety requirements. As critics have noted, companies are under no obligation to report hazards discovered during factory inspections and CSR auditing programs routinely promise that audit results will be kept confidential. Even if a company ceases or suspends production at a factory because of safety or health concerns, neither workers nor government officials are informed of the findings.
Coincidentally, the report was dedicated to a Bangladeshi labor rights advocate, Aminul Islam, who disappeared last year and is presumed dead. It reads roughly as McWilliams suggests it might: as an indictment of corporate self-regulation—and as a political argument in favor of keeping manufacturing jobs in the U.S., where a much broader regulatory and reporting system is in place.
Bringing the jobs home is great if you’re a union rep. It’s not if you’re a job-seeker in Bangladesh. And there’s the enforcement issue. Even if Congress passed a so-called comprehensive “sweatshop” law—banning imports of goods produced in factories with drastically worse conditions than American ones—monitoring globalized supply lines for infractions is a massive policing challenge.
“Subcontracting has become a huge issue. We’re finding companies direct suppliers have signed all the right papers, but subcontract out the work,” said Eric Olsen, a vice president with BSR, a consultancy in San Francisco. Olsen has been involved in textile mill regulation cases in China and Cambodia. “Many of the brands that are implicated have the right sorts of policy on their books,” he said. “But you run into a bit of a numbers problem. We’re talking about companies that have between 10 and 40 thousand suppliers.”
Basic abuses, like forced labor or child labor, are easier to verify, he said. But something like structural safety for an entire supply chain is beyond any reasonable policing model—at least in countries that don’t inspect buildings effectively as a matter of course. “In apparel companies you’re talking about fasteners, mills, dyers. You get into a game of whack-a-mole … it illustrates the inherent limits of what we can achieve solely with brand-driven compliance.”
“Brand-driven compliance” means individual companies responding to consumer (rather than government) pressure. The Disney pullout of Bangladesh entirely is an example. But consumer pressure, while effective, can be an unpredictable way to run a regulatory push, Olsen said. (Remember Mike Daisey?) “A policing model absolutely has to be done, but isn’t sufficient,” he said.
McWilliams, the business professor, argues for an expansion of thinking from the “anti-sweatshop” model to a broader notion of “sustainability.” Rather than ask whether job conditions fall under specific fields of concern—slavery, toxicity, shift lengths—regulation could ask whether a supply chain is sustainable for production of goods over the long term. A factory likely to have cracks in the walls, as in the Dhaka case, isn’t.
“CSR [corporate social responsibility—industry-led regulation] is a very local concept,” she said. “It’s responding to the stakeholders that I’m aware of.” In the case of “sweatshops,” human rights advocates are one stakeholder, and perhaps stockholders another.
But Dhaka’s shaky factory wasn’t obviously a sweatshop—it was a structural deathtrap. Yet “if those stakeholders don’t see it, I don’t have to worry about it yet.”
“Sustainability is a much broader concept,” McWilliams said.
