Why the utterly avoidable factory collapse in Dhaka demonstrates the need for citizens’ rights over corporate ‘charity’
Some of you may have spotted retailers from all over the place scrambling to say that they will compensate the families of those that died in the factory disaster in Bangladesh. Laura Kuenssberg has been keeping an interesting tally of the firms that have become embroiled in this. And rightly so. Watch out for the crocodile tears from big UK and multinational corporations saying how outraged they are about what happened.
It goes without saying that these firms make a huge amount of money from outsourcing production. Just days before the factory disaster, Primark’s sales were reported to have boosted profits for their corporate owners to the tune of over £400million. But hey, they’re giving the consumer what they want, aren’t they? And who am I to criticise those people in the UK that genuinely cannot afford more expensive clothes in these depressed economic times?
The outsourcing of responsibilities with economic activities
I have a huge issues with this – and for some time. I remember during my university years spitting with fire over some corporate PR clone saying how she was just as outraged that manufacturers of their garments were being forced to work in slave-like conditions that broke local laws as well as ‘corporate guidance’ from the commissioning brand. But in many cases these days, brands are literally that: Brands. The goods are made by third or fourth party firms – whether in clothing or electronics. Have a look at the small print on standard electrical items and you’ll find many that say they were manufactured by some company that you’ve never heard of, but were made for the ‘brand’. This was where the supermarkets got stung.
Back in the late 1990s when I first stumbled across The Onion, I found an article that spoofed how one big label was going to stop manufacturing and focus on adverts instead. What they may not have realised at the time was that they were years ahead of their time – predicting the future. It’s as if such brands are now just a mega co-ordinated procurement operation: Outsource the manufacturing to the non-Western countries, outsource your political lobbying to lobbyists, outsource your legal advice to a big city law firm, outsource your consultancy work to one of the big four, outsource your advertising to a big agency, outsource your sales to franchise firms or department stores, stamp your brand on the goods manufactured and on the adverts, and wait for the money to role in. Anything goes wrong, blame the organisation that you outsourced to.
What about consumer boycotts?
What Laura Kuenssberg has shown is something activists have known for years: That nearly all of the big brands and firms are operating in a manner that outsources much of their manufacturing and sales. Switching from one brand to another is meaningless. Again, look at the list of manufacturers Laura K mentions. What’s the point of switching from one brand to another if so many use low paid labour with poor working conditions (compared to what we have in the EU)?
The ‘added value’ is in the brand, not in the product. It’s one of the reasons why so many brands are able to get away with selling garments made from poor quality fabrics with poor craftsmanship at such high prices. This is more of an issue for the so-called ‘luxury brands’ that have sidelines making things like polo shirts or nightclub shirts as far as menswear is concerned.
“Yo Pooffles, aren’t you taking away consumer choice you freedom-hater???”
Right: Let’s nail this ‘consumer choice’ myth once and for all.
Consumer choice is a concept that is dependent on a number of very strong assumptions. For ‘choice’ to work, you need the means to exercise it. This includes but is not limited to:
- Availability of information
- Knowing how to use/interpret said information
- Having the time to interpret said information
I unpicked this in an earlier blogpost here, citing the example of electronic audio equipment in particular. Do you know what half the stuff mentioned in the technical requirements for electrical goods means? Do you look at the specifications on laptops with the clear knowledge as to which components are better than others, able to visualise by how much and have a knowledge of which combinations of components and software are going to meet your needs? If so, good luck to you, but for the rest of us, it’s not so straight forward.
“Yo Pooffles, are you saying I’m too stupid to read a label?”
Not at all. But some people may not be able to read labels for a variety of different reasons. Being partially sighted or blind is one of them, being dyslexic might be another. (As a wearer of glasses, having broken them on more than one occasion when out and about made me realise just how dependent I am on them). Also bear in mind adult literacy remains a problem in the UK. How many people have the knowledge and the confidence to properly cross-examine that sales rep on the goods or services they want to buy?
Actually, transparency of manufacturing is an issue here too.
It’s something that came up in HorseMeatGate – which I blogged about here. Just as with clothing, outsourcing is a big part of the problem with our food too. Hence complaints from various quarters that we as citizens (I don’t like the term ‘consumers’ because that implies we are like sheep that simply eat stuff without thinking) have become separated from how we produce things. (From food to clothing to manufactured goods). If the general public is blindsided to how things are made, why should a cash-strapped regulator be any better informed?
“Hey Pooffles, I don’t like the sound of that – you being on the side of freedom-hating regulators!!!”
It’s a paradox isn’t it. Freedom is not free. Whose freedom are we talking about? The freedom of people here to buy clothing that is priced ridiculously cheap? The freedom of people not to be killed in the workplace that such cheap clothes are made in? The freedom of UK firms not to be undercut by other firms that exploit their workforce employed at lower labour standards with lower environmental standards? What about their freedom from want and freedom from fear? Founding pillars of the welfare state?
Freedom is not free
It requires people to protect those freedoms – as we have seen in numerous campaigns around things like legal aid: The right to legal representation. The right to have your legal rights upheld – and the workers that died in that factory certainly did not. That’s why the European Convention on Human Rights has a separate court ultimately to uphold those rights.
Yet if freedom is not free and requires a cost to uphold it, then tax-evading big businesses aren’t helping things. Taxes that could otherwise be spent on education and law enforcement could have prevented such a factory as the one in Dhaka from operating in the first place. As this article states, the factory was illegally constructed. That factory should not have been in business. UK firms should not have been buying products from it. UK firms should not have been selling goods made from it. By doing so, those firms undercut hundreds of other retailers whose products were made in compliance with the law.
OK Puffles, what are you going to do about it?
The response from Primark as reported in The Guardian speaks volumes.
“But the company stopped short of meeting the demands of campaigning organisations and trade unions to sign up to a building safety action plan aimed at preventing a repeat of the disaster, in which at least 382 people were killed.”
Which comes back to the title of this piece. Is it corporate handouts to the immediate victims of the disaster that will prevent such things from happening again, or is it the proper enforcement of sound workers rights?
“Hang on Puffles, don’t Primark have a Code of Conduct?”
Good point – lets have a look at their ethical trading standards. Remember such things have become big marketing speak since the 1999 anti-capitalist demonstrations. Cynics call it greenwashing. Call it what you will. In the case of the factory disaster, I’m interested in how they ensure factories meet their published Code of Conduct – which is here.
“When selecting new factories, we require them to go through a process which entails a comprehensive audit of labour standards against our Code of Conduct. Audits are conducted by our own regional ethical trading teams and external partners. Our external partners are selected on the basis of their local expertise, specialist skills, robust practices and innovative methodologies.”
A list of their ‘partners’ is here. If, as is being reported, the factory in Dhaka was constructed illegally, then there has been an almighty failure of corporate governance – not just with Primark but with all of the other firms that sourced goods from there. Indeed, Matalan have put out this press release. Note the full webpage address and note that they have commissioned professional crisis communications consultants to deal with this. Remember what I said about the brand earlier?
If I was a shareholder for Primark’s holding company, I’d be asking very detailed questions about why the firm’s ethical code of conduct (and the systems in place to enforce it) failed so disastrously – and what steps the management board is going to put in place to rectify it.
The big question: Should there be a public policy response to this?
Yes. One that will benefit workers being exploited by these large industries, and one that could also boost domestic producers too.
Would you be happy for people in your family to work in such conditions as in that factory? If not, why is it OK for other people’s families to work in such conditions? This is a point about universal human rights. Not a particularly popular cause in the media these days, but someone has to argue for it.
The European Union should bring into force minimum acceptable standards under which goods and services exported to the EU can be produced under – with the threat of fines and tariffs for those that seek to undercut those standards.
Pretty straight forward really. If you want to export your goods to the EU, you have to meet the minimum standards that the EU requires firms operating inside the EU to meet. The impact of this on living standards across the world could be huge – and have a far greater impact than any aid programme.
Large and/or multinational firms (defined by the volume of trade activity and/or imports beyond a certain financial threshold) should be financially liable in EU nation states for the shortcomings of their suppliers in non-EU countries where they cannot demonstrate a comprehensive and robust system of checks and controls to ensure that the minimum rights of workers mentioned above, along with compliance of local laws are being abided by.
Why so? It deals with the problems of outsourcing responsibility, and forces the big brands to act, rather than trying to greenwash their way out of the situation. It shouldn’t be acceptable for corporate firms to make one-off payments to their victims without dealing comprehensively with systematic failings that condemned hundreds of innocent people to their deaths.
Such a move might make clothes more expensive. It might mean reduced profitability. But given the scale of profits and the ability of multinationals to export them to tax havens, doesn’t this limit the benefits the general public gets?
At the same time, for those in favour of ‘markets’, is it not better for goods to be priced in a manner that reflects fully the costs of production, rather than trying to externalise costs onto the workforce through poor conditions, the state/charities to mitigate poor conditions, and the environment through pollution?
More food for thought.