It is the dark side of globalization. This is the pressure of companies and consumers in the rich countries to profit from exploitation and desperation among the poorest of the poor in high-poverty, developing countries.
The recent collapse of an eight-storey building in Bangladesh, housing five clothing factories, which left more than 700 workers (mainly women) dead, many injured and some still missing is among the worst of the disasters falling on developing world workers who frequently work in unsafe conditions, with low pay and long hours, and little protection by unions or the state.
But the tragedy was predictable, was not unique, and could have been avoided.
As is clearly the case in Bangladesh, in many poor countries with lots of cheap labour and no natural resources, corruption is endemic, with politicians and officials routinely bought off, and wealthy factory owners free to mistreat workers. Health and safety standards scarcely exist and unions and other groups seeking to improve worker rights are subject to violence and intimidation.
Moreover, Western-world companies too often press for low, low prices by threatening to shift orders to factories in other countries where worker protection may be even weaker if workers’ rights are strengthened.
The proper response is not to boycott products from poor countries nor to insist that they be paid the same wages as Western world workers since the cost of living is so much lower in poor countries. Workers in those countries need jobs. But we should be working to ensure that workers everywhere have similar rights and protections for safe working conditions.
This is not a new issue. Nike soiled its reputation by assigning production to sweatshops, with brutal treatment of young female workers in these factories and a constant threat to relocate production unless strict price targets were met. Only when consumer activists made its unseemly corporate practices a major issue did Nike, to protect its brand, act.
More recently, Apple was subject to strong criticism for its use of the giant outsourcing company, Foxconn, to assemble the iPad, iPhone and other products in giant Chinese factories that critics said functioned like harshly controlled labour camps. Only when news of worker suicides and employee intimidation became widely known did Apple, and Foxconn, respond.
To its credit, the Weston family in Toronto has acknowledged that products for its Loblaw-related company, Joe Fresh, as well as for its British company, Primark, were manufactured at factories in the collapsed Bangladesh building site and has pledged financial compensation for workers and their families.
But what do we do to prevent such tragedies in the future?
While it is the responsibility of the developing countries themselves to set their own laws and ensure that workers’ rights are protected and unscrupulous employers punished, we can influence behaviour and practices by pursuing corporate responsibility and helping advocates of decent working conditions in these countries.
In the case of Bangladesh, clothing exports of about $20 billion a year account for about 80 per cent of the country’s exports, so the country desperately needs to attract Western retail chains and fashion companies to produce clothing there.
Our own government seems to feel it should promote religious freedom, with the appointment of a special ambassador. So why not an ambassador for a better globalization? Perhaps the Canadian International Development Agency can help fund local advocacy groups to improve workers’ rights. Canada has leverage as well. Products from poor countries enter Canada duty-free under the Generalized System of Preferences.
We could consider suspending that privilege from countries like Bangladesh, which show a blatant disregard for workers’ rights, as the European Union is threatening.
But ultimately it is up to Western companies to use their power to improve the conditions of workers.
Western businesses can invest more in auditing the factories where their products are made, publishing these audits and warning factory operators in developing countries they risk of losing contracts if conditions don’t improve. But corporations have to do this by working together, adopting common standards and sharing information on suppliers and subcontractors to maximize leverage.
The purpose of business is to make a profit. But we also expect business to act according to certain ethical norms.
The way workers are being treated, and their lives risked, in many developing countries clearly does not meet even minimal ethical norms.
But globalization cannot become a race to the bottom. It has to be made to work for all.
Economist David Crane is a syndicated Toronto Star columnist. He can be reached at crane@interlog.com.