On one side we have the Europeans. On the other, the United States.
The different approaches the two are taking to provide aid to Bangladesh factory workers says a good bit about the cultural differences involved.
Euro retailers, led by Primark, an Anglo-Irish company, and C&A, Dutch-German company, are deeply involved in getting long-term compensation funds off the ground, according to a report in The New York Times November 23. One is for Rana Plaza building collapse victims and one for the victims of the Tarzeen fire, which killed 112 workers in November, 2012.
The International Labor Organization is working with Bangladeshi officials, labor groups, and several retailers to create ambitious compensation funds not only for families of the victims, but also for more than 1,800 workers who were injured, some of them still hospitalized.
But none of the American retailers who have contracted business in Bangladesh support the compensation plan. Neither Walmart, Sears, Children’s Place nor any other U.S. firms that were selling goods produced at Tarzeen or Rana Plaza have agreed to contribute cash to the effort.
Compensation advocates say a long-term plan is necessary to pay for medical care for workers who are paralyzed or otherwise badly injured, to provide income after a breadwinner has died, and to give families enough income so that children are not force to quit school and go to work.
Bangladeshi workers earn at least a minimum wage of $38 a month. Primark has paid somewhat more than the minimum wage for each worker, totaling at least $138,000 a month, according to The New York Times.
Loblaw, a Canadian retailer, has agreed to join the compensation effort. “We believe we have a moral obligation to support the workers who produce our products,” Bob Chant, Loblaw’s senior vp for corporate affairs, told The Times.
“Compensation is so important because so many families are suffering -- many families don’t have anyone left to support them, Kalpona Akter, executive director of the Bangladesh Center for Worker Solidarity, told The Times.
“There’s been a good response from some European brands, but so far none of the U.S. retailers have agreed to pay a single penny for compensation.”
U.S. retailers have disputed their obligations. Walmart has strenuously asserted that unauthorized contractors were producing Walmart garments without the company’s knowledge.
Sears also states an unauthorized contractor had been producing on its behalf at Tazreen.
Walmart, Sears and 23 other American and Canadian companies have formed an alliance to upgrade factory safety in Bangladesh.
Walmart has posted on its website the results of 75 inspections that it commissioned for factories it uses in Bangladesh, according to The Times.
Kevin Gardner, a Walmart spokesman, told The Times the reports showed that many factories had “made real improvements that are making the supply chain safer for thousands of workers in Bangladesh.”
Gardner said that 34 of the 75 factories had moved from having a D or C rating to having an A or B rating.
“This is the first time a retailer has published results of factory audits on this scale,” Gardner said. “We believe transparency is vital to improve worker safety in Bangladesh.”
Sears says it is committed to improving conditions in the factories in Bangladesh it uses, but did not indicate an intention to provide monetary aid.
Why the difference in attitudes and intentions regarding compensation?
Liability and image-consciousness. Some industry analysts say Walmart, Sears and other American retailers are reluctant to join in on the compensation efforts because they fear it could be perceived as an admission of guilt or wrongdoing, leading to legal liability. Some also say American firms fear they will appear hypocritical if they contribute to a compensate fund after asserting that any production done for them in those factories was unauthorized.
