Global labor standards Research Paper

Global labor standards
Global labor standards

Global labor standards

Read the handout “Global labor standards”. (File uploaded) How would you approach the issues associated with subcontracting?

What can western retailers do in counties where the rule of law is week and the incentive to fabricate building certificates and inspection reports is great?

Do you think the NYU Center for Business and Human Rights proposal for “direct, strategic sourcing” (page 26, link below) is a viable alternative? How effective do you think it will be?


On April 24, 2013, an eight-story building comprised of retail stores and garment factories called Rana Plaza collapsed in Savar, an industrial suburb of Dhaka, killing 1,137 people and injuring more than 2,500. Most of the victims were factory workers who stitched garments for export to
developed countries.

Some of the survivors described the collapse as similar to an earthquake, starting with a loud cracking sound followed by the floor opening up beneath their feet as the beams broke in half.

Investigations uncovered that cracks had appeared in Rana Plaza the day before its collapse and the shops on the lower floors had been evacuated. Because of frequent power cuts, heavy generators had been installed on the factory premises to keep the production line active at all times and caused major vibrations throughout the building while running.

Authorities had approved only five of the eight floors that were actually built. Both the police and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), one of the largest trade associations in Bangladesh representing the garment industry, had told Sohel Rana, the
building’s owner, that his building was unsafe, but Rana ignored them and the factories stayed open.

Workers were told by factory managers that the building had been inspected once more and was now considered safe, and also received threats that they would be fired if they did not show up to work.

Rana was arrested and initially charged with negligence. On June 1, 2015 the police in Bangladesh filed formal murder charges against Rana and 40 others, including his parents, several factory owners in the building, and at least a dozen government officials.

Charges for building code violations were also submitted to a court in Dhaka against 18 people, 17 of whom were among those charged with murder, including Rana and his parents.

Before the collapse, Rana Plaza had housed five different garment manufacturers: New Wave Bottoms on the second floor, Phantom Apparels on the third, Phantom Tac on the fourth, and Ether Tex and New Wave Style on the sixth and seventh floors.

Because of widespread subcontracting, few retailers knew straightaway whether their products had been made at Rana Plaza or not. Primark was one of the few companies that promptly admitted that they had contracted with New Wave Bottoms, and made a unilateral commitment to compensate the victims and their families.

Ether Tex claimed to have produced clothing for Walmart at their Rana Plaza facility, but Walmart denied the allegation. As branded garments and copies of contract orders were found in the rubble, some retailers went through their own records and realized they had to walk back some of their previous statements, including Benetton…

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