/

It takes a global village to ensure fair, safe trade

by Hugh Cortazzi

On April 24, an eight-story building containing garment factories collapsed in the Bangladeshi capital, Dhaka, killing 1,127. The tragic accident has focused attention on working conditions in clothing factories in developing countries.

The accident may have resulted from the addition of unauthorized extensions to the building. The trigger for the collapse is said to have been the simultaneous restarting of sewing machines after a power failure.

Large producers and retailers of apparel in industrialized countries have taken advantage of the poverty of countries such as Bangladesh to increase their ability to compete on price by procuring products from companies in these countries, which pay very low wages to workers and produce goods in overcrowded factories where health and safety are neglected.

The pope has denounced conditions in Bangladesh as “slave labor.”

Some companies in Europe and the United States, which import products from Bangladesh and which are sensitive about their reputation for social responsibility, are said to be considering the cessation of imports from Bangladesh. The European Union is also reported to be reviewing the inclusion of Bangladesh products in its list of developing countries qualifying for tariff reductions and exemptions.

The intention of such measures would be to induce authorities in Bangladesh and other underdeveloped economies to pay higher wages and improve working conditions. Unfortunately the immediate effect of cutting off or reducing imports, while conditions are being improved, is likely to be a rise in unemployment and increased poverty and misery in the countries affected.

A reduction in tariffs applying only to products from factories that had been certified as producing goods in safe factories and paying fair wages would be difficult to administer and possibly considered discriminatory. It could also provide tempting opportunities for corruption by factories seeking certificates.

A better approach may be through agreements between companies importing from Bangladesh under which they agree to carry out safety checks on buildings and factories, pay for repairs and provide funds for training.

A number of European companies, including the British company Marks and Spencer and the French retailer Carrefour, are reported to have signed such an accord, but some companies such as America’s Walmart are said to have refused to sign. Unless all major companies sign the agreement it will have only a limited effect. The agreement may be challenged as contravening anti-monopoly legislation.

An alternative approach would be the organization of consumer boycotts of products produced by companies that do not insist on fair wages and working conditions. But such boycotts are difficult to achieve and are likely to garner support mainly from better-off and better-educated consumers. They should not, however, be written off as pointless.

In Britain, the Fairtrade Foundation was established in 1992 by a number of charities including Christian Aid and Oxfam. It belongs to the Fairtrade Labeling Organization International, which brings together 21 labeling initiatives worldwide.

The foundation seeks a world where “justice and sustainable development are at the heart of trade structures and practices.” To achieve this, the foundation “seeks to transform trading structures and practices in favor of the poor and disadvantaged” by contributing to “sustainable development for marginalized producers, workers and their communities.”

The foundation concentrates on “independent certification of the trade chain,” facilitating the market for fair trade goods and supporting producer networks.

The Fairtrade movement, in which Fairtrade Japan is a significant member, covers agricultural products such as coffee, cocoa (chocolate) and cotton.

One company promoting its Fairtrade products is Cadbury’s through its Green and Black brand. A number of approved Fairtrade products are now available in British supermarkets.

Organizations such as the Fairtrade foundation do help to improve working conditions in developing countries, but at a time of austerity when wages in developed countries are not increasing, consumers will inevitably look for cheaper products.

While we all need clothes — though many of us get by without regularly buying new outfits — the demand, especially but not uniquely from the young, for fashion goods is a striking phenomenon of the modern developed world and provides employment for people in developing countries who might otherwise be unemployed and possibly starving.

London’s main shopping streets (Oxford Street, Regent Street and Bond Street) are almost exclusively devoted to selling fashion goods (clothing, shoes, jewelry and accessories). There is a demand for high quality but there is also a significant demand for cheap products.

The Primark chain, which has been accused of procuring products from factories that would not be certified as safe and good employers by some independent observers attempts to meet such demand; its stores always seem full. Many customers seem to be from Eastern Europe where competition has not reached the same degree as in Western European countries.

Some of us in the older generation regret the passing of the mottai nai spirit and deplore how consumer goods are used at best a few times then thrown away.

There is no simple way in which we can ensure that the Dhaka tragedy is not repeated. This is not solely a Bangladeshi problem. Factories in China and some Southeast Asian countries also operate in conditions that are little better and that pollute the environment.

We must rely on a variety of policies to prevent further tragedies. The British government for its part is proposing to use aid money to train people in Bangladesh in safe building and employment practices.

The governments of developing countries need to be persuaded to enact and enforce health and safety measures and insist on minimum wages. Importers from such countries should insist that adequate steps have been taken by their suppliers to ensure health and safety as well as fair wages in the factories producing goods for them. Consumers need to be persuaded to boycott the products of firms, which do not ensure such standards.

The best way to ensure this is by giving publicity to the egregious misdemeanors (or indeed crimes), which led to the Dhaka tragedy.

Hugh Cortazzi served as Britain’s ambassador to Japan from 1980-1984.

  • http://getironic.blogspot.com/ getironic

    “Large producers and retailers of apparel in industrialized countries have taken advantage of the poverty of countries such as Bangladesh to increase their ability to compete on price by procuring products from companies in these countries, which pay very low wages to workers and produce goods in overcrowded factories where health and safety are neglected”

    But I guess the pay and the conditions of the employees are better than their previous jobs, or else they wouldn’t have left those, would they?

    “The governments of developing countries need to be persuaded to enact and enforce health and safety measures and insist on minimum wages.”

    Some kinds of labor are not worth very much, especially when businesses consider their alternatives in a global economy; a minimum wage simply destroys jobs that are worth less than whatever the minimum is set as. The higher the minimum wage, the more jobs that are destroyed or moved elsewhere, or used as an incentive to pay for machines to do the work that was once supporting a human being.

    In the end, these kinds of regulations don’t make workplaces any safer, they make these companies stop doing business at all in the areas that enact them. And then, will your ideas have left these people better off, or worse off?

    It’s one thing for *you* as an individual to give money in support of educating the builders, construction workers and laborers learning a greater depth of their trade, in the hopes of increasing the safety of buildings, etc. It’s entirely another to pretend to be helping these people, when all you would be doing is making their lives worse.

    • Robert_in_Japan

      Actually not—if ALL countries enacted fair and living wages, these predatory and vicious companies like Walmart (which today was busted for STILL buying from slave-labor-like factories) would end, as there would be no other choices. It can happen, but a great deal depends on the political will of their “leaders” which in Bangladesh are the worst of the worst!

      • http://getironic.blogspot.com/ getironic

        1) That will never happen without a totalitarian wold government, and at that point living wages would be the least of everyone’s problems.

        2) Even if it that did occur, and there are jobs whose labor is not worth the minimum, but are necessary, those costs would be passed on to the consumer in the form of higher prices.

        These higher prices would occur in all industries. But the level of production and the relative economic position someone is in, remains the same as before. i.e., maybe some people make more than they were making, but the price increases offset whatever that wage increase was.

        This means that not everyone would continue to buy things at the rate they did before. For example, instead of buying new pants, people sew their own up. Instead of buying vegetables they grow their own, instead of doing activity “A” for entertainment, they play cards or circle jerk or whatever is cheap. And that’s with an optimistic outlook!

        So while prices go up, the number of sales go down, to the point where the economic health of particular companies becomes damaged —- to the point of not offering certain goods and services anymore, which means a loss of jobs.

        This creates a vicious cycle, because as people lose their jobs, they have less with which to make purchases, and without those purchases, other industries are not being supported — so they too must shrink or die.

        There are underlying costs to produce anything, and creating an arbitrary line for a “living wage” ignores these costs. Implemented in the name of helping people live, in the long term it does the exact opposite.

        It’s not exactly fun to imagine someone sewing up shirts in a hot factory for 19 hours a day, but the reality is that every culture that is now securely First World went through a period of of this kind of toil. Western cultures did it already, and there was no one back then to cry for help about it because it had never been done before!

        The freer these Third World countries are allowed to be, the faster they will come to resemble what you are used to, and comfortable with — and not what they currently look like.

      • zer0_0zor0

        Yes, getironic has got it backwards.

        The governments of developing countries need to be persuaded to enact and enforce health and safety measures and insist on minimum wages.

        To that list should be added labor laws and standards.

        The environment and workers’ rights need to be protected everywhere. And if the minimum wage is a living wage, then people could lead a normal life, with the expectation of seeing some fruits from their labors.

        There certainly would be less incentive for would-be predator countries to try and lobby their own governments for tax breaks and the like, perhaps forcing them to keep their money at home, where their dealings would be subject to more scrutiny by the population, etc.