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Case 7

Case presented by:


Prashant Yadav (PGP/21/219)
Rahul Kalra (PGP/21/226)
Kunal Anand (PGP/21/371)
Varuni Sinha (PGP/21/242)
Reishi Kumaar T (PGP/21/228)
Abhishek Jayaswal (PGP/21/189)
1) What is/ are the major problems in the case?

The main problem in the case is that of use of Child labor for the harvest of cotton by the Uzbek cotton
industry. This child labor essentially deprives the children of their education.

2) Who are the major parties (stakeholders) in the case? How are they getting affected in the case?

The major stakeholders in the case are:

i) Children: Schools closed during harvesting season and the children are transported to the
harvest fields for work. They are forced to do excess manual work and are a paid a very
low wage
ii) Clothing companies: Discouraged the use of child labor in Uzbekistan by boycotting Uzbek
cotton
iii) Government: It has a strong hold over the cotton production system using Soviet-Style
quota system. Strict measure are implemented to ensure that the target is met.
iv) Farmers: They sustain with a low pay and struggles in not so conducive work
environments. According to Environmental Justice Federation, Cotton production of
Uzbek is one of the exploitative enterprises in the world.
v) The regional governors: Severe cost pressure from the regional governors forcing the
harvesting to be carried by the children
vi) NGO and EJF: Identified the violations caused by the cotton industry and working towards
solving those violations.

3) What is/are the concerns of the business decision-maker/s? How is/are the decision-maker/s trying
to resolve these concerns? (Your arguments should be based exclusively on the decision-maker/s
point/s of view.)

Lets look at the concerns from both Clothing brand, Retailers and Uzbekistan Government perspective
since these are the major decision makers:

Concerns of Clothing Brand and Retailers:

Dealing with problems of Child Labor in their production process: The child labor constitutes a
significant part of the supply chain process of cotton production. There are repercussions
associated with entirely doing away with this all of a sudden and at the same time they are in a
dilemma from ethical standpoint since they know how they have employed children is holding
them back from pursuing multiple opportunities and is taking away their basic right to education.
Evaluation of Human Rights violation against other benefits: They need to evaluate whether the
overall benefits they gain out of employing these children against the loss/benefit they might have
if they dont. The organization can use Utilitarianism or egoism or even rights and justice to
evaluate the ethical viability of their decision to continue employing such children.

Concerns for Uzbekistan Government


The decisions taken by the Government affect the production and export of cotton massively in this case.
The government has the power to regulate the actions of producers and retailer alike through policies and
taxes.

Reputational Damage: The fact that a country is aware that their children and their future is being
exploited at the hands of major industrialists and is planning to accept it or even ignore it will
bring about severe reputational damage and affect their international trade relations too.
Dealing with the fact that since the children would be busy manufacturing and in harvests there
would be an abundant amount of people that would be left uneducated and since its the
governments responsibility to ensure better quality of line, it puts them in serious dilemma.

4) Link the Case with the supplementary Case materials and analyse it from a broader perspective.
(Take into account the additional information in the supplementary Case materialsthe broader
perspective.)

In Sept 2007, the UK based T-shirt manufacturer, Continental Clothing, started labelling all its
garments with the country of origin of the cotton in order to assure consumers that the firms
cotton didnt originate from Uzbekistan.
By 2008, UK retailers Asda, Tesco, and Marks & Spensers, Swedish chain H&M, US brands, Gap
and Levis and other brands and retailers signed up to boycott.
Finnish clothing design company, Marimekko and the Estonian textile producer, Krenholm both
announced a boycott of Uzbek cotton in November 2007.
Despite the ban by large Western companies, Uzbekistan continued to expand its other markets
for exported cotton in the late 2000s, particularly in Asia.
Eg: At the 2008 International Uzbek Cotton Fair, officials signed export deals worth about $1bn,
amouting to some 950,000 tonnes of cotton fibre. Among the chief purchases were China, India,
Pakistan, Bangladesh, South Korea and the UAE.
In September 2008 Uzbekistan Government announced that it would ban children under 16 from
picking cotton and signed ILO conventions committing the country to stop using child labour.

5) Illustrate your arguments with the application of business ethics theory/theories.

Ethics of Egoism: The companies found out that it would be best to serve their interest first, which they
did by boycotting Uzbek cotton, as it would have brought bad name to the company in the long as well as
short run. It would also help them to show their stand against child labour.

Act Utilitarian: The government is using act based utilitarian to maximise the happiness of the entire group
of stakeholders by choosing the best path for them. Such as employing children in harvest and hence
increasing the earnings of the farmers, keeping the costs low etc.

Rule Utilitarian: After opposition and boycott from some nations government brought in the rule to keep
the interests of children above other stuffs and maximisation of happiness be taken care of by keeping
child labour into consideration.

6) See yourself as the decision-maker/s. Now, discuss what you would have done in this type of a
situation. (You may use role-paly for this.)
As a decision maker we can incorporate rule based attitude towards this scenario and keep in mind the
well-being of children into perspective and hence keep boycotting the produce. Will also try to incorporate
proper wages and profits are given to the farmers, their share of profit should not be galloped by someone
else.
System should be made more transparent so as the entire world knows the origin and the rules by which
production happens and the supply chain functions, so that people be aware of the adversities someone
is facing somewhere, ethics of justice should be taken care of at this point.
The companies purchasing such products should be penalised by their local government for promoting
child labour.