A garment factory in Bangladesh collapsed on itself April 24th. This event killed many, leaving even more missing. This is the type of event that lowers confidence in potential investors. There has been a lot of talk of major companies leaving Bangladesh over this event. Disney has stated they are halting all production in Bangladesh. Unfortunately this is not an isolated incident in Bangladesh, the New York Times covered a very similar fire in November of 2012. Despite the danger of the factories, some think that the threatened pull out of major companies would be even more disastrous. The Times says the industry is one of the strongest in the world, and second only to China. The decisions of these companies could set a historic precedent. If many of the companies stay, neglecting the ailing safety concerns, it could have discouraging results. If the companies enforce safety standards beyond those required by the state, they would be sacrificing profits. Unfortunately the most popular option is leaving the country all together, which could cripple the economy. Employing over 3 million people, the industry is strong, and with a and lifting the country from poverty, the Globe and Mail says the wages pay better than farming or casual labor.
As a Bangladesh struggles to raise themselves from poverty, safety is a low concern. They rate 144th in the world in terms of corruption. It is up to private firms to make the decision on what is safe. Companies want to cut costs, but they need consumers to buy products. If these companies enact some sort of corporate social responsibility will it be enough to assuage minds? It is the responsibility of the consumer to hold companies to some measure of decency by voting with their dollar. Nike in the past dealt with similar criticism with regards to child labor. They seem to have overcome their hurdle, not without admitting they "blew it". Events like these are incredibly hard to deal with, but lessons must be learned. The question stands as to whether or not these companies will learn from this most recent disaster.
Events like these happen periodically where MNCs have operations set in the country or plan on setting up industry in the country. Speaking of Nike, there is a report that claims Nike used the military to intimidate workers into giving up their pay. Indonesia just so happens to be the third largest producer of Nike products, and they have also cited many instances of abusive policies and working conditions. While some companies make poor decisions regarding investing in unstable countries, often times it is the opposite, in which unethical companies may abuse their workers. Hence, a there needs to be a way to impose punishment on companies like this.
ReplyDelete