INTRODUCTION freedom of expression, land, education, work, food and

INTRODUCTION

Human rights are
a set of principles that define how people should be treated, irrelevant of
their gender or background. They cover health, security, freedom of expression,
land, education, work, food and water. Every country in the world has agreed to
these principles and every person in the world is entitled to them. However,
most human rights can and are increasingly violated by large corporations.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

 

On the 24th
of April 2013, the Rana Plaza building in Bangladesh, housing several garment
factories, collapsed, killing 1138 people and seriously injuring another 2500,
leading to this event being recorded as the deadliest industrial
accident in history.
This has represented a defining moment for the approach companies chose to have
regarding their responsibilities towards the increased labour abuses in their
supply chains. In the aftermath of this tragedy, reforms and regulations were
put in place to protect the workforce, but despite the efforts made, many of
the products that currently lie in shelves across the world are produced by
workers labouring in unsafe or inhumane environments. No company wants to
discover labour abuses within their supply chain, but as the size of supply
chains increases, so does the likelihood that unacceptable and even illegal
practices can enter the picture.

 

With increasing
numbers of socially conscious consumers and investors, businesses cannot afford
to wait for external interventions to solve this complex issue. While there is
no ‘silver bullet’ solution, progress, not perfection, should be the primary
goal and with a few guiding principles, businesses can position themselves in
front of the problem (Morris, Copulsky, Linich and Parker, 2014). Including
workers, competitors and consumers in the solution development process can help
large retailers overcome some of the challenges that may rise. To work towards
a solution for labour abuse in their supply chains, companies should commit to
a continuous incremental progress. “Prioritising the prevention of human rights
violations can help organisations open dialogue with empowered consumers,
preserve the integrity of their supply chains and protect their brand identity”
(Deloitte Insights, 2014).

 

WALMART’S
ATTITUDE

Founded 55 years
ago, Walmart has become the world’s biggest retailer by revenue, as well as the
largest private employer globally, having over 2.3 million workers. Around the
world, every second, 400 people shop at one of the 11,700 stores and clubs that
Walmart has in 28 countries (Walmart Annual Report, 2017).

 

The clothing sold at Walmart is made miles away from the shop, shipped
around the world, stored in warehouses, run by third-party contractors, and
then finally taken to the shelves, yet it is extremely cheap. Its supply chain
comprises more than 100,000 suppliers and millions of workers. The second
largest supplier of Walmart is Bangladesh (after China, producing 70% of all
the goods that Walmart sells worldwide), which is also the world’s second most important garment
producer (over 5,000 garment factories), providing more than 4.5 million
workers, out of which 80% are women (Muttakin and Khan, 2014). The company’s purchasing practices aim to get the
maximum flexibility and the lowest prices from its suppliers, who in order to
do business with Walmart, pass on these pressures to their own workers with
very poor pay and often dangerous working conditions. Bangladeshi textile
workers are among the lowest paid in the world, being given $0.32 per hour, the
equivalent of $38 per month, which is undoubtedly not enough to make a living. 80-hour
work weeks, no overtime pay, no health care and illegal subcontracting have
become common practices in these factories. Workers who speak up about these
horrendous conditions regularly face intimidation, dismissal and violence, labour
right activists being often tortured and sometimes even murdered.

 

It has been repeatedly claimed that Walmart aims to cut cost at any price
across its supply chain without any considerations for ethical standards or
social responsibilities. With its size and reach, Walmart is dictating
standards that affect workers all around the world, leading the global race to the bottom for working
conditions. In pursuance of avoiding the dangerous prospect of losing business
to other less regulated economies, Bangladesh has been trying to comply with
the costs requirements of western companies, such as Tesco, Walmart, H&M,
Marks&Spencer or Carrefour. This has turned it into a country where more
than half of the factories are vulnerable to hazards. Between 2006 and 2012, over
900 workers were killed in 243 factory fires. It is Walmart’s reaction to such tragedies what
attracted the most criticism from consumers and investors. After the largest
factory fire in the history of Bangladesh, in which 117 workers died (BBC News,
2012), Walmart, being one of the international brands for which the respective
factory was producing, explicitly refused to compensate the victims and to invest
in the upgrade of Bangladeshi factory buildings. Moreover, after the Rana Plaza
building collapse, Walmart refused to join over 200 firms that signed the Accord on Fire and Building Safety in
Bangladesh, a 5-year contract requiring them to improve safety conditions
in hazardous factories across the country, establishing financial commitments
between each firm and Bangladesh, depending on how much business they have
there (Bangladesh Accord website, n.d.). Following this tragedy, International
Labour Organization (ILO) put all its efforts to work on this legally binding
agreement between unions and companies, counting as well on the Bangladeshi
government to play its role in overcoming the severe situation. Moreover, ILO
focused on developing its relationships with the leading retailers, aiming to
form global agreements, influence their corporate social responsibility
policies and encourage real commitment from their end. Along with UNI Global
Union, ILO has managed to get more than 200 companies to sign the Accord, this
being their attempt to actually work with the retailers to put protections in
place that will eventually deliver beneficial results for workers. Being legally
binding and not simply a voluntary code, the agreement assured the fact that in
case the companies did not hold up their end of the deal, a legal process would
be possible through which their actions could be enforced, implying in this way
real consequences for non-compliance. Being aware that they could be liable in Courts
if they fail to adhere to the provisions, Walmart, alongside other retailers,
refused to sign the Accord, choosing to be ignorant and denying any
responsibility (Belal, Cooper and Khan, 2015).

 

OTHER INDUSTRIES

In Bangladesh, Cambodia, Pakistan and Vietnam, countries deeply
integrated in the global supply chains, women and men work backbreaking hours
in unsafe environments and still struggle to make ends meet. While the garment
sector receives a lot of international attention, little is paid to the
situation in footwear and electronics. To boost productivity, companies
increase the level of automation and reduce the number of workers. Even when
productivity and efficiency increase substantially, workers’ wages remain at the legal minimum
wage. Employees work in stressful and dangerous environments, where injuries
and accidents are common. They are offered no health insurance, receive no benefits
and face retaliation in case they report injuries or complain about the
conditions. In the global supply chain of the electronics industry, things are
worse. A small number of brands own the market share. This puts them in
position to dictate purchasing prices paid to their suppliers and to reduce
them every few months, affecting directly the working conditions in the supply
chain factories.

 

SUPPLY CHAINS AND CORPORATE SOCIAL RESPONSIBILITY

Global supply chains have now become a major feature of the contemporary
global economy. They are significantly coordinated by lead firms, which have a
lot of control in how production is undertaken. Consequently, this implies a certain
responsibility of companies regarding workers and working conditions across
their supply base. About 25% of workers throughout the world are estimated to
be employed through global supply chains, which is a very significant number,
being about twice as high as it was 15 years ago. Moreover, the increase is
particularly steep in the case of emerging and developing countries. Modern
technology makes the production more efficient by facilitating its
fragmentation so that each fragment can be outsourced to the developing
countries. However, although this boosts productivity growth, it facilitates
neither high incomes for most of the workers, nor stability of the employment
relationship. (Torres et al., 2015).

 

The way that the scattered supply chains are running is as follows: the
more and more pressure is put on the bottom parts of the supply chain (not just
the workers, but also the suppliers at the lower levels), the thinner the
margins they are working on, being forced, or at least tempted to cut costs. This
downward financial pressure, as well as the increased requirements for
flexibility have driven a significant increase in precarious work. However,
because of high levels of corruption in the practice of social audits, the
factories manage to successfully pass safety inspections and receive approval
certifications to continue their activity, endangering in this way millions of
workers by ignoring their rights. For instance, in the case of Rana Plaza,
prior to the disastrous accident, most of the garment factories there had
received, upon verification, certifications supporting the integrity of the
building, even though it was initially supposed to be a building with 4 floors,
meant to be used for light commercial activity, but instead it had 9 floors and
it was being used for heavy industrial processes (Finnegan, 2013).

 

Firms spend a lot of time and energy assessing their suppliers on
quality, prices and flexibility, but these are not the only risks in a supply
chain. Unfortunately, things like labour abuses, corruption and pollution are
left out of the checklist too often. One scandal in one supplier could be the
difference between attracting new customers and investors or turning the
existing ones against a company. In the last 25 years, dozens of companies have
ended up in Court or on front pages because their suppliers treat workers
poorly. This has pressured companies to screen codes of conduct containing sets
of ethical standards that they are requiring their suppliers to adapt to. These
codes would contain rules against child labour and forced labour, as well as
rules supporting effective and fair wages for the workers and safe working
conditions. Thus, paradoxically, large retailers would demand sudden enormous
amounts of goods, bought at extremely low prices and delivered within tight
deadlines, but at the same time they would expect the suppliers not to exploit
people along the way.

 

CONCLUSION

Four years after the Rana Plaza tragedy, in March 2017, four members of
the Progressive Alliance of Socialists and Democrats in the European Parliament
went on a “fact-finding mission” in Bangladesh to check the development
in the garment sector, following the adoption of the Accord. Although they did
find improvement on a large scale, there were still worrying aspects regarding the
labour movement being still very much under pressure. Moreover, they identified
several vital ILO standards that had not been fulfilled (Komodromos, 2017).
This implies that there is still an urgent need for legislation to control and
monitor the activity in supply chains and to make the multinational companies
transparent to an optimal extent. It is believed that this sort of transparency
will increase accountability and will raise standards (Islam and McPhail, 2011).

 

Although brands outsource their production of goods, they cannot
outsource the responsibility of making sure that the conditions of production
do not violate in any way the rights of the workforce, especially when a big part
of the manual production is being done in countries that lack a proper regulatory
capacity to ensure the safety of workers. Companies do have the ability to lead
the fight against labour abuse. They are well placed to detect and prevent
exploitation in their own operations and in the communities where they operate,
as well as to influence and work together with suppliers and business partners in
order to raise labour standards within their industries. Consequently, it falls
on the multinational companies to take on this regulatory role, since the
developing countries are neither trained, nor equipped to be able to do this on
their own. 

x

Hi!
I'm Dianna!

Would you like to get a custom essay? How about receiving a customized one?

Check it out