Saturday, 18 May 2013

Walmart and the Illusion of Safety

Following a host of workplace tragedies in Bangladesh, Labour rights unions, NGOs and the ILO met with business interests in Germany on April 29, 2013 and outlined an agreement with respect to fire and building safety for the Bangladesh region[1]. Roughly 50% of factories in Bangladesh don’t meet legal safety requirements[2]. This agreement is significant in that it would bind the companies that sign on to the accord to satisfy their safety commitments under the agreement.

Among other things, the accord is said to provide for improved inspections, training, transparency and dispute resolution. Labour groups involved in the agreement also successfully included mechanisms that would require employers to step up and pay more to suppliers in order to secure living wages for the workers. The agreement would go a long way toward protecting Banagladesh workers from future calamities. Signing the agreement is voluntary. Yesterday was the deadline set for retailers to join the agreement. At least 24 retailers have signed on.  

Despite there being broad recognition that safety and living wages are crucial to the development of a workplace culture that protects and values the lives of workers, not all major retailers are on side. The most notable dissenter, unsurprisingly, is Walmart. Walmart asserts that it has its own fire and safety plan that goes beyond the goals set by the agreement[3]. This may be true, but before anyone applauds Walmart for its plan, it’s worthwhile to note that its plan has some stark differences from the agreement. Perhaps most importantly, the Walmart plan is not legally binding[4]. Factories that fail to follow the so-called safety plan designed by Walmart will face extremely limited consequences, if any at all. Of the options available to Walmart, this one is clearly on the inadequate end.

If Walmart truly cared about workers, there are proactive steps the company could take to protect workers, even while refusing to sign the agreement. One measure that would send a clear message to any factory that refuses to abide by safety plans would be to limit business with the factory. Such a negative impact on the bottom line of any factory could not but encourage compliance with safety measures. But Walmart has shown no signs it would enact any such kind of enforcement mechanism. Despite the company touting that its plan imposes more stringent fire and safety standards than the agreement crafted in Germany, if there is no enforcement mechanism Walmart’s plan is potentially worthless. Walmart could promise the most comprehensive protection of workers’ rights in its plan, but if there’s no incentive for the factories to abide by the plan, nothing will improve.

In fact, the plan might even end up benefiting factories that don’t abide. The factories that don’t enact the safety requirement in the plan will keep their costs down. From a bottom line perspective, there’s a danger that Walmart may prefer these companies to those that would cut into costs by attempting to protect workers.  In short, the regrettable likelihood is that the Walmart plan is simply business as usual. We can only hope the agreement and the international attention the conditions have garnered will foster an environment welcoming of unionization in Bangladesh.

Walmart is the world’s largest retailer and could have taken a leading role in these discussions, protected workers and created a workplace safety culture that would ripple across the region. While Walmart has demonstrated its unwillingness to show regard for Bangladesh workers, the companies that have signed on to the safety accord may yet provide the first step toward making up the safety deficit left by Walmart. If workers with new protections are able to parlay the recent interest in workers’ rights in the region into unionization, future tragedies may yet be prevented. A large union presence has been repeatedly proven to elevate conditions for all workers. For those workers employed in factories that supply Walmart the collateral effect of unionization across the region could be their best chance to see the implementation of true safety standards. If Walmart won’t sign the agreement to give workers improved conditions the least the company could do is take away the carrot from companies who undermine those conditions.


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