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OM in the News: Human Rights and Overseas Factory Workers

June 2, 2016
Bangladeshi volunteers and rescue workers at the scene of the Rana Plaza building collapse in April 2013 that killed 1,135 people.

Bangladeshi  rescue workers at the scene of the Rana Plaza building collapse in 2013 that killed 1,135 people.

After more than 1,100 deaths exposed dangerous labor conditions in Bangladesh in 2013, brands like H&M, Walmart and Gap were among the most powerful companies that pledged to improve the safety of some of the country’s poorest workers. “But 3 years later,” The New York Times (May 31, 2016) writes, “those promises are still unfulfilled, and that safety, labor and other issues persist in Bangladesh and other countries where global retailers benefit from an inexpensive work force.

A new report by the Asia Floor Wage Alliance has put another spotlight on the conditions. In Bangladesh, tens of thousands of workers sew garments in buildings without proper fire exits. In Indonesia, India and elsewhere, pregnant women are vulnerable to reduced wages and discrimination. In Cambodia, workers who protested for an extra $20 a month were shot and killed.

The brands say that in recent years they have made significant progress in structural repairs and monitoring of factories. But the report accuses Walmart of benefiting from forced labor and other abusive practices in a number of Asian countries. In Cambodia, for instance, workers at factories who make Walmart products are required to work 10-14 hours a day in sweltering heat, without access to clean drinking water or breaks — conditions that have contributed to “mass fainting episodes.” Workers who refuse or who try to speak up for themselves risk being fired.

Factories in many developing countries are under enormous pressure to churn out billions of dollars worth of goods at costs low enough to beat out the competition for business from foreign companies. H&M, with $25 billion in sales, is one of the biggest beneficiaries of the so-called fast-fashion craze, relying on factories in many countries to help quickly refresh its clothing offerings.

Classroom discussion questions:

  1. What are the ethical responsibities of OM managers whose supply chains are in developing countries?
  2. Why is it difficult to meet labor condition commitments?
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Supply Chain Management Research

Andreas Wieland’s supply chain management blog for academics and managers

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