Questions & Comments

by Admin | Nov 18, 2013 | Highlights

Prior to the Conference, BGF is receiving comments and questions from participants. Here are some of them:

1. Lan Phuong Bui (Deputy Director, Vietnam Institute of America Studies): How could multi-lateral treaties such as the TPP help improve workers’ safety especially in developing countries? 

2. Salil Tripathi (Director, Worker Safety IHRB): There has been considerable focus on western brands and companies. Who is exerting pressure on Bangladeshi companies? 

3. Khurrum Siddique (Director, SIMCO): How do we make buyers accept responsibility for outsourcing?

4. Eileen McNeely (Director, Center for Health and Global Environment): What is the role for collective bargaining to oversee health and safety conditions?

5. Professor Kent Jones (Economics Department, Babson College): Instead of “naming and shaming” only corporations that sell sweatshop products, how about doing the same for countries, like the US and members of the EU, that reserve their highest tariff rates for clothing made in the poorest countries?  According to www.progressive-economy.org, the average US tariff collected on imports from Bangladesh in 2013 was 15%, second only to Cambodia in its severity.  Based on some $4billion annually in clothing imports from Bangladesh, the US collected more than $600 million in tariff revenue on those items in 2012; the EU, with similar tariffs, collects a comparable amount.  Why not persuade the importing countries to contribute these tariff revenues to a fund in support of the Bangladesh Fire and Safety Accord? Such a fund, accumulating tariff revenues on Bangladeshi trade alone of $2 billion or more annually, could be turned over to a competent international authority, perhaps the ILO, to fund structural improvements and to link compliance with safety standards to a certification process, with independent inspection and monitoring.  In fact, this sort of tariff-based funding could be used to support similar programs in other countries as well, and even in other industries.  These tariffs, by the way, are the product of domestic protectionist politics, are a drag on development, and should be reduced and eventually eliminated.  In the meantime, the tariff revenues could at least be devoted to such a worker safety initiative that actually helps development.

The good thing about the response to the Rana Plaza tragedy is that it has focused on improving worker conditions through voluntary actions, public awareness, and international cooperation.  While these measures alone may not solve the problem, they at least provide a cooperative framework to build upon.  Financial resources to implement needed infrastructure and building safety measures must also be a part of the solution, and this element can provide incentives for compliance (see my proposal above).  What is unlikely to succeed are unilateral trade sanctions to enforce labor standards, which would end up punishing Bangladeshi and other foreign workers.

6. Jyoti Sinha (Sloan School of Management, MIT): I have been researching on the  cause of fire at garment factory/workshop/outlet. Fabric dust of course catches fire easily but where does the spark comes from. Is it electrical appliances outburst, machinery default which produces the spark..or something else? Are the garment workers trained or oriented to follow the safety rules at work. Does the safety culture/ climate exists at these garment factory/workshop/outlet.

With reference to Triangle shirtwaist factory fire: A New York Times article suggested that the fire may have been started by the engines running the sewing machines, while The Insurance Monitor, a leading industry journal, suggested that the epidemic of fires among shirtwaist manufacturers was “fairly saturated with moral hazard.

7. Mr. Kirpal Singh (Director of the Wee Kim Wee Centre for Diversity Education at the Singapore Management University):

• The main issue for worker rights seems to me to be the actual implementation….it is one thing to get these rights, etc, and another to actually see them executed…. Who will do the important but risky *policing*?
• How do we ensure that even if minimum working standards/salaries are agreed to these will be implemented without workers being punished/coerced, etc?

From Singapore

by Admin | Nov 18, 2013 | Highlights

Dr. Vu Minh Khuong, Assistant Professor, Lee Kuan Yew School of Public Policy, National University of Singapore has sent BGF his comments and question as following:

Comment: “React” or “reform” is an important indicator when one assesses how far a nation can go in turning a severe disaster such as the Rana Plaza factory collapse into a powerful driver for change and transformation. While the “react” approach may lead to some punishment, review, and revision, its effects are not fundamental and lasting.

In contrast, the “reform” approach foster all the stakeholders, including governments, businesses, workers unions, workers, and MNCs to work together to forge out a strategy that will enable Bangladesh to become a competitive place for garment industry, not only in labor costs but also in working conditions. This strategy should address the fundamentals and particularly emphasize the efforts to benchmark Bangladesh against the comparable countries in Asia (such as Sri Lanka, Vietnam, and China) and to learn from world best practices.

Question: In your observations, the efforts made by the Bangladeshi government, the Bangladeshi garment industry, and MNCs have likely followed which approach, “react” or “reform”?

From Arnold Zack, Mediator and Professor of Harvard Law School

by Admin | Nov 18, 2013 | Highlights

Here are a couple of questions from Arnold Zack, Mediator/Professor at Harvard Law School:

I realize the focus of the Accord has been on factory safety which obviously impacts employees, but the greater problem is the workplace conditions of factory workers (wages, unpaid overtime, illegally long hours, punishment for unionizing, etc).  Given the endemic corruption of the Bangladeshi government what avenues would you recommend for providing better wages and working conditions for its garment factory workers? Do you see the ILO amenable to undertaking the monitoring?

The practice of brands pulling business from a country when they suffer bad publicity from contractors oppressing workers, victimizes the workers once again and not the factory owner or the unscrupulous government officials. Is there a way of protecting the exploited workers in such situations to assure the factories continue with improved working conditions for their employees?

The EU Accord provides a binding robust program of worker protection including the right to unionize. Do you see the weaker voluntary American brand counterpart being strengthened or making our brands more accountable?

Questions

by Admin | Nov 18, 2013 | Highlights

BGF is pleased to introduce here some comments from World Bank, sent by Timothy G. Evans, Director of Health, Nutrition and Population in a letter:

BGF would like to introduce below comments of Mr. Chaovalit Ekabut, President of Siam Cement Group, Thailand:

1.  Work standard and practice should be audited by a third party (similar to accounting).
2. MNCs shall used outsource services only from those audited.
3. Recognition for good examples.

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Ms. Deborah Leipziger (Adjunct Faculty member at the Simmons School of Management): What can socially responsible investors do to put pressure on brands to improve working conditions in Bangladesh?

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From Europe, Mr. Roland Schatz, Founder and CEO of Media Tenor International has sent us following questions:

1. Why does Quelch think, that the MNC’s are not responsible? Modern Supply-Chain-Management is no longer accepting the delegation of responsibility?

2. The Reputation damage to European corporates seems to be higher than to US – why?

3. What has to be changed on the level of UN PRI in order to have the concept of Sustainability being understood as material to C-Suites in the West?

Questions

by Admin | Nov 17, 2013 | Highlights

Some comments and questions from Mr. Mike Thompson, Professor of Management Practice, China Europe International Business School:

Primark sent food aid to 1300 families within a week of the building collapse and have developed software to help the medical and vulnerability assessment of everyone affected. The other 27 brands involved have refused to support their compensation scheme. Why is Primark (ABF) unique amongst the 28 brands involved in continuing to pay wages to families and other benefits?

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From Vietnam, Mr. Bui Duc Lai, Assistant to Chairman of Vietnam National Assembly shares his comments as following:

I highly appreciate good intentions and eruditeness of Boston Global Forum (BGF) and Governor Dukakis in choosing the topic. However, I am wondering if there are common solutions to improving minimal standards for workers from countries having different political systems and cultural values? If yes, which solution(s) could be considered as the most effective? How will BGF participate in realizing them?

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Here are some thoughts from professor Eli Pollak of Chemical Physics Department, Weizmann Institute of Science, Israel:

1. The question of the pay received by the workers is something we, the outside public should not touch. Demanding higher pay might be counter-productive, the companies would only leave Bangladesh and then one has created even more misery then there is today.
2. In the same vein attempting to interfere in working hours, medical insurance and such is also problematic.
3. To create real change one always needs money which is always hard to come by with.

1. The amount of funds the companies would have to spend would hopefully be negligible to their overall expenses, so that it would not create pressure to move out of Bangladesh.
2. It is in the companies interest to prevent such tragedies from happening – they cost a lot of money and the good name of the companies is harmed.
3. This means that the companies involved should be convinced to cough up the necessary funding needed for such an external review.

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