Case Discussion Questions

1. "From an economic perspective, was the shift to a free trade

regime in the textile industry good for Bangladesh?"
- It depends on how you look at it. From one aspect, the Pew
Research center reported that 76% of Bangladeshis hold favorable
views toward the United States, as of 2014. According to the reading,
they seemed to maintain their growth, despite the global recession.
Still, I can't help but feel that, if a free trade market is going to benefit
off of their low wage rates, that the global companies should also
fulfill social obligations toward the very people who are making the
United States CEOs rich. I feel like free trade is a good concept if it's
done responsibly, because it gives this imagery of, "I earn what I
make", but I can't help feeling like "corporate America" isn't really
free trade, at all. The succession of Bangladeshi disasters give me the
further impression that "free trade" as it's "sold to us", isn't really free
trade, so much as it is a financial plutocracy. I understand that
Bangladesh's economy has been improving because of its trade with
the US, but at the cost of people's lives? People's fathers and mothers,
who were killed in these disasters? $250 doesn't bring back a person's
loved ones; no amount of money does - that's an insult. I don't feel
that companies should stop utilizing poorer nations, but that
companies who outsource to these countries should specifically be
required to ensure the safety of the foreign employees. If they're to get
rich off of foreigners, it shouldn't be at the expense of their lives.

2. "Economically who benefits when retailers from Europe and

the United States source textiles from low-wage countries such
as Bangladesh? Who might lose? Do the gains outweigh the
losses?"
- Countries on both sides of the deal benefit. I think that this is a
positive sum game; though undoubtedly, Anglo-based businesses
benefit far greater than the Bangladeshi employees who put in all the
effort - would it be the capitalist's "ideal capitalism" (dog-eat-dog) if
the significant wealth gap, in favor of the corporate elites, didn't
occur? Isn't it for this reason - cheaper production for greater profits -
that companies choose to outsource? It couldn't possibly be that these
companies are doing it for philanthropic reasons. Nevertheless,
the "invisible hand" of trickle-down economics is working it's slow,
ineffective "wonders" in Bangladesh, possibly because Bangladesh
is still poor enough for the imaginary hand to continue being
effective.

3. "What are the causes of the weak safety record of the

Bangladesh garment industry?
Do Western companies that import garments from Bangladesh
bear any responsibility for what happened at the Rana Plaza
and other workplace accidents?"
- In my opinion, yes, Western companies do bear responsibility for
what happened. I see it as a greedy desire for "more, more,
cheaper, cheaper", without any concern for the people who are
making them rich. If they had concern for the "little guy", they never
would have outsourced, to begin with, because they'd be perfectly fine
with making a little bit less profit, annually, for the sake of
contributing back to their national employees who pushed them to the
ranks of success. Some capitalists are honorable and philanthropic,
while understanding that, "If you've got a business—you didn't build
that. Somebody else made that happen." (BHO) Other capitalists are
greedy, prideful scoundrels, who won't sign agreements to oversee
safety inspections in those same poorer, foreign nations, because they
might be sued.

4. "Do you think the legally binding agreement signed by H&M,

Zara, Tesco, and others will make a difference? Does it go far
enough? What else might be done?"
- We're only given a brief, general outline of the binding agreement in
this discussion, but as far as the overall concept goes - yes, I do
think that the general idea would make a difference. In fact, I believe
that it is this type of agreement which should be mandatory / lawfully-
binding upon all global companies. Since many of the companies buy
political favors through lobbyists, palm-greasing, and bribes, this may
be a very difficult concept to implement in all of the world's
developed nations, without some sort of political advocacy being
pushed by the majority of the people. However, if the general concept
could first be implemented, it could then be expanded upon. "Give an
inch, take a mile." Implementing this agreement as law could provide
more leverage to require global companies to give back to the
nations they leech off of.

5. "What do you think about Walt Disney's decision not to

purchase merchandise from Bangladesh? Is this an appropriate
way of dealing with the problem?"
- Appropriate? Yes and no. From the angle that Walt Disney did not
indirectly cause themselves to be implicit in unsafe operations,
which led to the harm of other individuals, yes, Walt Disney made the
right move. They couldn't have actually known, for sure, that
these disasters would occur, but since they considered it too risky,
they did themselves a favor. However, I'd also say no, they didn't
make the right decision, for two reasons: 1) For philanthropic reasons,
if you observe a poor nations status, don't you want to help them
develop? If I had that opportunity, I'd like to do it; 2) Taking the time
and money to fix the Bangladeshi infrastructure, so that these
incidents didn't occur, and that the people could operate under safe
working conditions, could have benefited Walt Disney, as well. If
they had invested in the opportunity, they also could have reaped
some benefits, but instead, they missed out.

6) "What do you think of Walmart's approach to this problem? Is

the company doing enough? What else could it do?"
- From an ethical standpoint, Walmart was just being Walmart -
meaning, no ethics were really involved. They often just abide
by socioeconomics on a legal level. The reason for this is clear: their
mottos have been, "Always low prices", and, "Save money. Live
better." They need to maintain this reputation, and social
responsibility is not really a priority. Realizing this, what else they
could do to improve becomes clear: they could operate more
responsibly, in an activist manner.
Introduction:
Textile and clothing sector plays a vital role in the growth of economy; generation of more
than 65% of the country’s industrial employment and 81% of the export earnings. The
industry employs about 5 million workers of whom 80% are women. Until the liberation of
Bangladesh, the textile sector was primarily an import-substitution industry. It began
exporting ready-made garments (RMG) including woven, knitted and sweater garments in
1978, which grew spectacularly during the next two and a half decades from US$3.5 million
in 1981 to US$10.7 billion in FY 2007. Apparel exports grew, but initially, the RMG industry
was not adequately supported by the growth up and down the domestic supply chain (e.g.
spinning, weaving, knitting, fabric processing, and the garment accessories industries).
Until FY 1994, Bangladesh’s RMG industry was mostly dependent on imported fabrics- the
primary textile sector (PTS) was not producing the necessary fabrics and yarn.

Fig: Bangladesh textile industry

It is essential to identify and analyze the problems of primary sectors. Supporting basic
textile industries such as spinning, weaving/knitting, dyeing and finishing industries are
known as backward linkage industries. RMG sector and printing and packaging sector are
known as forward linkage industries. From study of textile sectors; it was found that:

 Most of the textile mills are running with poor capacity utilization.
 We are always dependent on the foreign machinery as well as technicians.
 We have to borrow engineers/ experts from other countries; but this cannot be a
long tern solution for the economic and technological growth of our country.
 It is the well known to all of us that Bangladesh lacks of necessary adequate
research and development facilities.
Case overview
The collapse of Rana Plaza in Bangladesh, considered the deadliest disaster
in the history of the garment industry, killed more than 1,100 people in
2013. In its wake, international outcry highlighted some of the abysmal
conditions factory workers were subjected to in the Asian country.
Recently murder charges were filed in Bangladesh against people accused
of ignoring building code violations before the collapse.
Here’s some background on the fatal incident.

Rana Plaza, where clothes were made

The clothing manufactured in Rana Plaza — also known as the Sacar
building — was for brands such as the Canada-based Joe Fresh and U.S.
retailer JCPenney. Thousands of workers were packed into several floors in
the building daily to churn out garments.
Bangladesh has a $20-billion textile export industry — the world’s second-
largest, after China — powered by extremely cheap labor costs. It’s a major
supplier of clothing to U.S. and European apparel companies.

Before collapse, cracks were showing

On the morning of April 24, 2013, the concrete building caved in, killing
more than 1,100 people and injuring more than 2,000 others. It took
several weeks for searchers to recover all the bodies.
Several days before the collapse, concerns were raised about visible cracks
in the building. Some workers said they were told to enter the building
despite their worries.

Charges filed
On June 1, 2015, murder charges were filed against 42 people — including
the building’s owner, Sohel Rana, as well as owners of factories inside the
building and at least a dozen government officials. Rana tried to flee the
country after the building collapsed, but he was captured by authorities and
held until he was charged.

Compensation to victims
In the aftermath of the collapse, some companies provided donations to aid
the thousands of affected families. Several companies, such as Wal-Mart,
Gap and Children's Place donated. The Arkansas-based Wal-Mart — which
in the past had used factories in Rana Plaza — donated indirectly to the
victims by giving $3 million to BRAC USA, the North American affiliate of
the Bangladeshi development organization that helped supply aid to victims
and families. Gap, which was not directly linked to Rana Plaza, supplied
half a million dollars to BRAC USA.