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Friday, February 01, 2013

'Blame Bangladesh, Not the Brands'

Jagdish Bhagwati answers the following question:

Recent factory fires in Pakistan and Bangladesh have killed more than 400 people. Yet, the stricken garment manufacturers had apparently passed inspection — despite bars on windows and locked exits — and been deemed safe.

These factories supply clothing to — and are in business because of — American companies like Wal-Mart and Sears. So where does the responsibility lie in improving worker safety, and what can be done about it?

Here's his response:

Blame Bangladesh, Not the Brands, by Jagdish Bhagwati: The community was in a “palpable state of shock” over the fire at a plant that left 25 workers dead and 55 others injured. “Many people who lost loved ones and friends in the fire expressed bitterness... They acknowledged that the plant provided significant employment..., but they were deeply concerned by reports that many of the victims ... were trapped in the building by blocked exits.”
Was this a report from Bangladesh or Karachi? No, it was from a poultry processing plant in Hamlet, N.C. ... in 1991. Blame for that fire was cast not just on the company, but on the government.
The Bangladesh fires emphasize again a lax and lackadaisical attitude to the issue of workplace safety by the Bangladeshi authorities, possibly aided and abetted by domestic politics. This reflects a general attitude of neglect in protecting workers against unsafe conditions, like providing goggles and ensuring that they are worn when workers operate close to an open furnace.
But asking Wal-Mart, Gap and other brands to substitute for the somnolent government will only marginally address worker safety reform. What is necessary is for the Bangladeshi government to stop resting on its laurels of social progress — a myth, which I and the economist Arvind Panagariya have recently challenged, and step up to the plate to establish proper regulations and monitoring, extending to all of Bangladesh, not just its garment factories.

I agree that the Bangladeshi government should "step up to the plate to establish proper regulations and monitoring," but companies have a role to play too (they may, for example, have political power that can be used to block or encourage regulation and monitoring, and there is the moral obligation to protect workers as well). If we assume the companies can't do much, and don't hold them accountable -- if we brush it off as an inevitable response to market pressures in an environment with few constraints on this type of behavior -- they'll have no incentive to change.

    Posted by on Friday, February 1, 2013 at 03:12 PM in Economics, Regulation | Permalink  Comments (106)


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