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Ethical Leadership in the Race to the Bottom

November 3, 2013

Updated July 14, 2015

Rana Plaza 1Update: Not much has changed since this fateful day. Textile and garment workers in developing countries continue to be exploited by profit-at-all-cost companies, while Western consumers close their eyes to their plight. Take a moment to read this excellent commentary by Michael Hobbes The Myth of the Ethical Shopper.

It sounded and felt initially like an earthquake as the building shook, and then quickly collapsed, taking hundreds of mostly female workers to their fate several floors below.

Limbs were crushed, later to be amputated. Many died unnecessarily due to the delays of an inadequately resourced and poorly trained emergency medical response system.

Death toll: 1,129

The world’s worst industrial accident in three decades.

This was Rana Plaza, Bangladesh. April 24, 2013.

The collapse of Rana Plaza was a catastrophe in the making, the consequence of insatiable corporate greed; indifferent consumers in the rich West; and a poor, corrupt government trying to create a pathetic semblance of job creation in one of the world’s poorest countries, yet one that is now second to China in the manufacture of textiles and clothing.

Have you already forgotten this horrendous non-accident? Note the “non.” This was no accident.

In the months following the initial media attention, two Canadian news sources tackled Rana Plaza: The Canada Broadcasting Corporation’s (CBC) award winning The Fifth Estate, and the Globe & Mail, one of the country’s two national newspapers.

This was a painful post to write. I, too, along with my fellow Canadians–and most other citizens of this planet–had moved on to more recent disasters. But Rana Plaza is a study in ethical leadership and doing what is right, separating the hyperbole and the BS that often emanates from the mouths of top corporate leaders.

I’ll first touch on some of the key highlights of The Fifth Estate investigation, led by journalist Mark Kelly.

Kelly and his investigative team spent months digging into the collapse of Rana Plaza, but it was a ledger that was found in the rubble that helped piece together the story. Follow-up interviews with survivors and witnesses bolstered their report.

The Canadian connection to the disaster is Loblaw (the country’s largest grocer and the second largest retailer of children’s clothing) and its partnership with Joe Fresh, created by Joe Minram.

Rana Plaza photo 2 Galen Weston Jr. (son of Galen Weston, Executive Chairman of George Weston Ltd. which controls Loblaw, and who has a net worth of $7.6 billion) is the executive chairman of Loblaw.

He attempted to get out in front of the media story, and compared to other corporate leaders didn’t do a bad job. However, it was nevertheless a rather pathetic spin control attempt, especially in the latter part of the investigations by the CBC and the Globe & Mail. It was particularly shameful that Joe Minram refused to be interviewed by the CBC.

Loblaw, which in late October stated that it would offer some measure of compensation to the victims and their families, isn’t the first major company to be cornered by the media on the topic of corporate socially responsibility. The GAP and Walmart are well familiar with these experiences. Yet what is intriguing was The Fifth Estate’s efforts to speak to Loblaw employees in Canada about clothing items made in Bangladesh, specifically at the former Rana Plaza. Excuses were the norm, essentially telling the reporter (with hidden camera and protecting the employees’ identities) that the articles didn’t come from that factory.

It struck me at that point: why would minimum wage employees lie for their employer? It would have been easier to say, I don’t know, or, I’ll find a manager for you.

Consumers, by and large, don’t want to know about the dirty secrets of the offshore clothing industry. This has started to change in recent years, but it’s a very slow process.

In one telling interview with a young Bangladeshi woman who had to have a leg amputated after the collapse of Rana Plaza, she immediately recognized the same clothing articles as shown to Canadian Loblaw employees. However, memories are short and flagrant abuses of miserably paid workers is not just continuing but actually growing. When the owner of Rana Plaza, who kept adding stories to his factory, was asked by The Fifth Estate if anyone from Loblaw had ever visited his factory he replied no.

The issue is less Loblaw, despite its apparent indifference to what was occurring at Rana Plaza, but that of the corporate world. Walmart continues to be implicated in worker abuses through its supply chain, though it’s savvy enough to place enough middlemen in the process to obfuscate the truth. The GAP took a good whacking a number of years ago (and learned its lesson), and HBC (Hudson’s Bay Company) has more recently been taken out to the wood shed for a spanking.

Rana Plaza photo 3 The offshoring of clothing manufacturing has accelerated in the past decade. Just in the province of Quebec, which historically had a vibrant industry, 75,000 additional jobs have been lost in the span of a few years. Bangladesh is on the heels of China as the go-to country for making dirt cheap clothing. All this is happening in the name of obtaining the lowest price possible. And as noted in the Fifth Estate program, factories can’t say no to retailers.

The Globe & Mail investigation, reported on October 12, 2013, just a few days after The Fifth Estate program, revealed similar findings. Toronto’s garment district, similar to Montreal’s, has been decimated over many years as production has been moved offshore. A few numbers help drive the point home.

With respect to just Bangladesh, the growth in exports of ready-made garments rocketed from near zero in 1983 to $21.5 billion in 2010. The number of garment factories mushroomed from a few hundred to 5,600 in 2012. And employment rose from a couple of hundred workers to some four million by 2010. And of those workers 80% are females, not just adult women but young girls.

As the Globe & Mail poignantly observes:

“…as the ties between countries have become stronger, accountability has become a loose thread. The Globe’s investigation shows how companies such as Loblaw place their orders through middlemen who in turn source work to a network of far-flung factories. The retailer whose shelves are stocked with cheap T-shirts in many cases does not know where in the world it or its materials is going to be produced when an order is placed. Inspecting buildings and working conditions has been beyond the retailer’s scope.”

It continues later in the investigative article: “Although Loblaw was more forthcoming than most affected retailers in the wake of the disaster at Rana Plaza, the lines of responsibility are still blurred.”

As much as the Globe and Mail article was interesting, at times it reminded me of the bureaucratic stuff I read for 30 years in the federal government. Perhaps it’s because the G&M didn’t want to hammer a Canadian icon, recognizing what U.S.-based multinational retailers have wrought upon emerging economies, hungry to get a piece of the job-creation action.

Rana plaza photo 4 It doesn’t matter. The industrialized West’s clothing industry is screwing both poor countries AND Canadian and American workers by taking a hands-off approach to where production should be located, just as long as it’s situated at the moment’s cheapest place.

The race to the bottom of the wage barrel, where workers are mere cogs in the production wheel, flesh and blood beings who are abused and exploited in order to serve the ultimate ends of Western consumers’ insatiable desire for cheap fashion, reveals top corporate leaders’ priority of profits ahead of people.

Overly indebted consumers (read Canadians) turn a blind eye to the plight of downtrodden Bangladeshi workers (not to forget those in Vietnam, Cambodia, Columbia, Honduras, etc.), all in the name of the next car purchase or vacation, or as is often the case, simply trying to care for their families.

It’s one thing for corporate CEOs to chase the bottom line while remaining out of the public eye; it’s quite another to espouse that their company is concerned with the welfare of outsourced, contract workers in some of the world’s poorest countries.

Who are we kidding here?

Reflect on the photos you’ve seen. These are real women who only wanted to put in a hard day’s work to help support their families. They asked nothing more, nothing less from the employer who hired them.

We should all be ashamed.

Tell me and I shall forget. Show me and I may not understand. Involve me and I shall always remember.

– Native American saying

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One Comment leave one →
  1. May 2, 2016 9:30 am

    It’s been three years and I have not forgotten this “horrendous non-accident”.

    My daughter posted this article in April …

    and inspired me to post this today …

    Fashion with compassion,

    ❤ carmen

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