With global profits should come global corporate responsibility
The collapse of the eight-storey Rana Plaza factory building near the Bangladeshi capital, Dhaka, has now claimed over 1,000 lives.
The tragedy, one of the most deadly industrial building collapses anywhere, has raised questions about the liability of western retailers for the working conditions of those in their supply chains.
So far there have been nine arrests, including engineers and the Rana Plaza’s owner, Mohammed Sohel Rana, who is suspected of illegally adding more floors to the building which housed five garment factories that supply leading brands including Primark, Matalan, Mango and Benetton.
Primark has announced it will provide long-term aid for children who lost parents and financial aid to those who were injured. But in doing so, do they run the risk of admitting legal liability?
For operations in the UK Primark and other employers have a general duty under the Health & Safety at Work Act 1974 to ensure, so far as is reasonably practicable, the health, safety and welfare at work of employees, including maintaining places of work in a safe condition. But the act expressly has no effect outside this jurisdiction (see s.84) unless by secondary legislation.
Moreover, the Bangladeshi factory producing the clothes for Primark was not operated by it, but by New Wave, an independent supplier, and the building in which the factory was housed was apparently controlled by Rana – ie not New Wave and not Primark. On the face of it, Primark are too distant to be held liable.
But even if no legal liability arises, do Primark and other retailers have a moral liability to secure safe working conditions for those who supply their fashion lines?
The best hope for the safety of workers, in Bangladesh at least, may be an announcement by the Ethical Trading Initiative (ETI), whose members include Primark, Marks & Spencer and Gap, among others.
We are told ETI members sourcing from Bangladesh, alongside trade unions and NGOs, will “adopt a common approach to address fire and building safety” in that country’s garment sector, and will support efforts “to bring local stakeholders together for the effective implementation of the National Tripartite Plan of Action on Fire Safety (NAP)”, and “make their support for the NAP explicitly clear”.
Fine words, but are they enough? News reports tell us Primark stopped short of meeting the demands of campaigning organisations and trade unions to sign up to a building safety action plan which, it could be argued, might generate more immediate and tangible results. The ETI is, however, working to finalise an agreement on safety.
In November 2012 Primark owner Associated British Foods reported profits of £761m, citing “exceptional” performance from its discount fashion chain. With global trading, and consequently large profits, surely comes global corporate social responsibility.