'Shot across the bows': Corporate Social Responsibility in the aftermath of recent Bangladesh industrial tragedies
Bangladesh’s low wages, and duty- and quota-free access has driven its garment export industry to a $20-billion-a-year business. The most recent factory accident in Bangladesh signals that the industry's desperation to feed the West's appetite for cheap clothes and cheaper manufacturing has gone too far. With 60 percent of exports going to Europe, there has been a shot across the bows to the European Union to implement trade actions towards Bangladesh. The hope is that new policies will pressure the Bangladeshi government into improving health and safety for the garment workers of Dhaka. Bangladesh has urged the EU not take harsh measures during this crucial economic time.
The retail world needs to recognize that the real cost of having sustainable businesses are going to be higher
Many major retailers are also feeling pressured with the surfacing scrutiny of factory working conditions. Scott Nova, the executive director of the Worker Rights Consortium, a factory-monitoring group based in Washington, notes that “the apparel brands and retailers face a greater level of reputation risk of being associated with abusive and dangerous conditions in Bangladesh than ever before.” The Walt Disney Company, for instance, has chosen to end production in Bangladesh in March after a tragic fire. “These are complicated global issues and there is no 'one size fits all' solution,” said Bob Chapek, president of Disney Consumer Products. “Disney is a publicly held company accountable to its shareholders, and after much thought and discussion we felt this was the most responsible way to manage the challenges associated with our supply chain.” This raises the question, does Disney pulling out of Bangladesh – and several other developing countries – actually help better workplace conditions?
Diane Brisebois, CEO and president of the Retail Council of Canada, sees a challenge in transparency for Western agencies. A large workforce, some reported internal corruption around factory-level standards, and subcontracting all contribute to an environment in which retailers may not be fully aware of what is happening within their supply chain. Labor groups have pushed for an alternative strategies to current corporate policies in place. Independent inspectors with the authority to shut down unsafe factories as part of an agreement signed by suppliers, retailers and unions has been one suggestion. A new proposal from the ILO (International Labor Organization) is expected to be submitted to the Bangladesh Parliament in June.
“Bangladeshi companies who supply to [Western] retailers need to be pricing in operating a decent factory, a safe factory and paying proper wages,” ETI director Peter McAllister commented. “And then the retail world needs to recognize that the real cost of having sustainable businesses are going to be higher.”