Tag Archives: Rana Plaza

Corruption and Deadly Accidents

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After last week’s catastrophic explosion in Beirut—which killed over 150 people, injured thousands, and left hundreds of thousands homeless—Lebanese citizens are rightly demanding a full investigation of the incident and accountability for those responsible. The official reports so far have stated that the source of the blast was an abandoned Russian cargo ship carrying a large quantity of ammonium nitrate; it is not clear why that vessel and its dangerous cargo, which arrived at the port in 2013, were allowed to remain for so long despite repeated warnings about the dangers. Some commentators have expressed skepticism about the official account, and suggested that the blast was caused by illegal munitions being smuggled through Lebanon. We do not yet know, and may never know, the full story.

Much of the coverage of the incident has emphasized the widespread corruption of the Lebanese government, and many Lebanese protestors have emphasized this same theme. It is not yet clear whether corruption had much directly to do with this incident. The official account so far suggests negligence and mismanagement rather than intentional malfeasance. But the instinct to suspect corruption is entirely understandable, because there is ample evidence that corruption is often a significant contributing cause of many deadly accidents. Indeed, while much of the public discussion about the costs of corruption, particularly by donor agencies and international institutions, focuses on macroeconomic outcomes (such as per capita income, GDP growth rates, and economic inequality) or on other measures of human development (such as education, literacy, and health), corruption is also a significant contributing cause of avoidable accidental deaths. Continue reading →

We Need An Extraterritorial Law To Hold Companies Responsible For Clean Global Supply Chains.

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Six years ago, the deadliest garment industry accident in modern history killed more than 1,100 people and injured 2,500 in an apparel manufacturing facility, Rana Plaza, in Bangladesh. Perhaps the worst part is that the tragedy was entirely preventable, and the result of corrupt practices by the politically well-connected owner. The Rana Plaza building violated codes, with the four upper floors having been constructed illegally without permits. The foundation was substandard, and despite safety warnings that led shop owners and a bank branch on lower floors to immediately close, owners of the garment factories on the upper floors instructed employees to work the next day to keep up with customer demand. The customers that the garment factory was trying to satisfy? Mango, Primark, Walmart, the Dutch retailer C & A, Benetton, and Cato Fashions, among other recognizable global brands. And yet none of the US brands accepted responsibility for the problems in their supply chains that enabled this disaster (unlike non-US brands that contributed millions of dollars into a victim support fund).

Years later, not much has changed. Despite some recent encouraging developments, the current legal regime still does not do enough to hold international companies responsible for health and safety violations by their suppliers, and two-thirds of corporations continue to turn a blind eye to supply chain corruption. Such corruption can lower production costs and increase profits by enabling suppliers to engage in a wide range of insidious practices, including cutting critical corners on labor, health and safety. And when an accident does happen, companies can walk away free of any liability for the practices of their subcontractors, as in Rana Plaza. The beneficiaries of these corrupt practices are not only the owners of the supply factories, but also the multinational purchasers and their consumers in rich countries, who get cheaper goods at the expense of the health and safety of disadvantaged workers in low-cost manufacturing hubs.

This is ethically unacceptable.  And because we cannot expect companies to engage in responsible sourcing on their own volition, the right response is more expansive liability on companies that do not take sufficient steps to ensure clean supply chains. While the ideal solution might be some sort of broad international legal regime, that isn’t going to be feasible anytime soon, meaning that countries like the United States should act unilaterally and create a bill focused on bringing about clean supply chains.

The law I advocate here would have the following features:

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