A bitter lesson in corporate responsibility

Death in Dhaka...600 and counting

Death in Dhaka…600 and counting

Galen Weston’s remorse notwithstanding, it’s tempting to think the man who runs one of the largest retail organizations in Canada should have known how dangerous conditions were for the Bangladeshi garment workers who died when their building – where some of the Loblaw-owned Joe Fresh apparel was manufactured – caved in on them.

There was even a hint of self-recrimination in remarks he made separately to reporters and investors last week, as reported by CBC News and The Canadian Press. Referring to his company’s commitment to safety standards at the overseas facilities it contracts to produce its goods, the executive chairman said, “Nothing in (the) reports suggested a problem, but the scope of the audits does not cover structural integrity. . .I am deeply shaken by the event. . .Our thoughts and prayers. . .go out to those who were injured and to all of the families who have lost loved ones.”

More than 500 perished in the collapse outside the Bangladeshi capital of Dhaka last month. As many as 150 remain missing. The tragedy made headlines around the world. And, still, Mr. Weston wondered about “the deafening silence from other apparel retailers on this. . .I’m very troubled. . .Thirty companies were having goods manufactured, but only two have come forward to speak publicly.”

But whether or not he and his industry counterparts should have known about the perilous condition of the edifice (and if, by knowing, done something about it before the dreadful accident occurred) is lamentably moot. What matters is what they do now.

Other than remaining mute, they can exit the country altogether. According to an item in The Independent, “Executives at Disney were so concerned about labour conditions in Bangladesh that they ordered a halt to operations in the country, before the clothes-factory collapse. The decision to stop production of branded merchandise was taken in March and was prompted, in part, by the factory fire in Bangladesh in November last year that killed more than 120 workers.”

The news source quoted Bob Chapek, president of Disney Consumer Products: “We felt this was the most responsible way to manage the challenges associated with our supply chain.”

The third option is a version of staying the course, sadder but wiser. Reports suggest this will be Loblaw’s approach, with renewed vigilance. The company plans to enhance its facility audits, engage its own people directly in inspections and create a disaster relief fund for the victims and their families. “We have taken action to address the situation,” Mr. Weston said last week, according to CP. “(This includes) the announcement of a fund to provide relief. . .There is more we will do and we will make that public over the next few days.”

Crucially, the company will remain in Bangladesh because Mr. Weston and his senior executives believe the garment industry can be a “force for good” in the otherwise impoverished Third World. Under the circumstances, this is the most responsible course of action.

Globalization has changed the rules of the road for western corporations that avail themselves of cheap labour overseas. The vast and integrated nature of their supply chains demands that, if they choose to do business with poor countries such as Bangladesh (where, paradoxically, the apparel industry generates $20 billion a year), they are also obliged to assume a more direct role in overseeing manufacturing processes and infrastructure.

The disaster in Dhaka illustrates that globalization’s evolution is halting and still fraught with atavistic, hands-off ignorance of, or indifference to, working conditions around the world.

But it also stands as a wake-up call to rich retailers who can no longer afford, either morally or financially, to shirk their duties abroad. The Internet and near-ubiquitous mobile communications is seeing to that. So, increasingly, are consumers who, in virtue of the options they enjoy, can and do make mincemeat of a company’s most important asset: its brand.

Mr. Weston’s remorse is genuine. He might yet take some comfort in the fact that, in exercising his presidential choice, he is doing the right thing in Bangladesh.

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