Cases in Global Business Ethics

The largest Bangladesh factory fire in recent times killed 112 people this last November. This horrible incident raises once again the dilemma of who bears responsibility in such a tragedy.

As we examine this case, we have singled out specific players who might bear significant responsibility for this particular event. The Bangladeshi government has the dual responsibility of taking care of its citizens as well as maintaining its economy by supporting the $20 billion-a-year garment industry that serves as 80% of its total export earnings. The workers, mostly women, earn as little as $37 per month and depend on the government for their safety; however, corruption runs rampant in Bangladeshi politics and the country is currently ranked 142nd out of a 176 countries according to the Transparency International Corruption Perception Index. In this case, there are also implications of arson to further political interests of specific parties.

Additionally, the owner of the factory constructed five more illegal floors beyond the original structure, and the factory location was in an area in which large vehicles, specifically fire trucks, could not easily enter. Major international retailers have often been criticized for not taking responsibility for their subcontractors; companies whose products were produced at this particular factory include major retailers such as Walmart and Sears.

Do you think that it is the government’s responsibility to enforce safety regulations and bring these factories up to date or should more be done by multinational corporations that use these factories in order to ensure the safety of their supply chain employees?

We assign the majority of responsibility in this case to the government, which has failed to protect its citizens and factory workers on multiple occasions. This most recent factory fire, although more deadly than any in recent memory, is unfortunately not a rarity in Dhaka. The Bangladeshi government fails to properly enforce safety standards they set because they fear the impact that those regulations would have on the garment exports. Although there has been an initial outcry against major companies, such as Sears and Walmart, who have subcontracted labor to different Bangladeshi factories, we believe that they are less culpable than the Bangladeshi government because of their degrees of separation from the actual event. Although we recognize the financial constraints and the associated corruption faced by the Bangladeshi government, we believe that only a local authority could create significant change in how safety is valued. The bottom line is that if the government regulations were properly enforced, factory fires, which are all too common in Bangladesh, would reduce in number resulting in safer working conditions for factory employees.

Bringing these factories up to code would, however, create another cost for factory owners. This cost could either cut into the owner’s profits, cut the wages of factory workers, or be paid for by an increase in production costs paid for by subcontractors, which would be passed on to the multinational corporations that use these facilities to create goods.

Ultimately, there is a tradeoff here between profit and safety. It has been estimated that a quarter of the factories in Dhaka are not up to current safety codes. If the government enforces these regulations, there will be less business generated because costs would increase, but the factory employees would be able to work in a safe environment and disasters like this fire would become much less likely.

Who do you think bears responsibility for this tragedy? What other ethical frameworks (social, political, etc…) can help unpack this complicated scenario? How would you use these other frameworks to decide who is responsible? Is your answer an ideal or realistic scenario? Explain.

Photo by BatulTheGreat used under a Creative Commons License