In a globalized economy, ethical problems are becoming more acute and subtle. International sweatshops or plants of multinational companies like Nike and Levi-Strauss, who regard their brand reputation a core asset, have become a matter for public debate, in terms of the ethics induced in economic processes. Critics of sweatshops argue for a development of a universal ethical business approach that would hold those making business decisions more morally responsible. However, there is a threat from the ethical absolutes, which can cause effects opposite to the initially intended ones by the critics. Therefore, Thomas Donaldson’s and Ian Maitland’s opinions on the problem of ethical absolutism and universalism will be reviewed using the example of international sweatshops and Rana Plaza collapse in Bangladesh, the most vivid accidents that sparked a debate about whom to hold accountable for hundreds of deaths and injuries. The ultimate responsibility for the citizens rests with the government, since its function is to provide environment and legal support for the well-being of its people, whereas the objective of a business is to maximize profits.
In April 2013, Rana Plaza, a factory building that hosted Joe Fresh production alongside with a number of other clothing manufacturers, has collapsed killing approximately eleven hundred workers and leaving even more severely injured. The day before the collapse local media reported massive cracks in the building. The reason of the cracks lies with purposeful ignoring of the fact that the building could only have five stories. Despite the permission for a limited number of stories, the owners of the building decided to extend the initial plan with three more levels. Political connections of the owners have secured the construction process, which proves the existence of a corrupted system of Bangladesh (Gomes, 2013).
There are several points about the party’s being responsible for the collapse. From Donaldson’s point of view, Joe Fresh should be held responsible since their strategy involved transferring production to Bangladesh to exploit local workers and use the facilities without prior auditing. Ian Maitland would argue that if companies like Joe Fresh are the ultimate accountable party, it is better not to invest in the developing countries at all emphasizing the non-sense of such opinion. The third view, the one supported in this work, defends Maitland and suggests that governments are responsible for their citizens and the victims of Rana Plaza in particular.
First of all, the review of the critics’ arguments against businesses and their policies in their activities in the developing countries and Donaldson’s position in particular is required. Ian Maitland mentions several major parts of the debate: cheap labor as the major motive for the foreign investors, which explains the low wages paid to workers when compared with hourly rates in the U.S., for example; governments that suppress unions opposing the low working standards and conditions; minimum wage being typically lower than the poverty level; unofficial employment of most workers, which also leads to violations of the minimum wage payment requirements and child labor. All of these have the elements of governmental denial of human rights. Maitland goes on explaining why such practices are not necessarily unethical.
In the case of Rana Plaza, some of the above mentioned statements are relevant. The wages paid to workers at the factory were relatively small, however, as Maitland states that in 1991 women working on garment factories received around $55 dollars per month, which is quite a competitive salary. Still, factory management forced workers to go into the building to work despite common indignation (Mirdha & Rahman, 2013). People were threatened to be deprived of a monthly salary if they refused to work. The fear of losing the income is quite reasonable in countries like Bangladesh.
Another critic’s claim is that foreign investment is a cause for income inequality. Low wages keep the workers poor, and high rates of export provide opportunities for the traders and government. This is how critics explain the growing gap between the rich and the poor. Such claims can refer to the informal sector, where there are no ways for investors to exert control. However, the officially employed workers receive decent payment, which often exceeds the average income threefold. After the accident, the injured and the families who lost their relatives received compensation from Joe Fresh. This fact emphasizes the willingness of the investors to fund the enterprises that bring them profit. All the information about how foreign investment causes financial inequality and damage in the countries does not reflect reality since economic development and dropping unemployment rates state the opposite. Thus, the countries with growing employment have increasing wages due to the scarcity of labor supply. The more the country is open for investment and job creation, the better the outcomes are. It is a fact that in a corrupted country, government will oppose the rapid decline of unemployment since they are afraid that growing wages will make the country not attractive for the investors. This fear is irrational. Governments can create other benefits for the investors if the wages are too high to compete.
Now, there are two major opinions about which party is interested in low wages and poor working conditions: foreign businesses or governments together with local businesses. In the case of Joe Fresh, low wages are appealing and form a part of a cost-cutting strategy. However, the accidents that stop production and cause hundreds of deaths cannot be considered as a benefit that comes along with cheap labor. Such brands value their image. Typically, brands like Nike or Reebok specialize in marketing, not production, which is also the reason behind contracting. In addition, events, such as the Rana Plaza collapse, are extremely costly for them in every respect. On the other hand, corrupted governments are willing to keep wages low since it secures their regime. Thus, it can be stated that in the case of the Rana Plaza factory collapse, Joe Fresh, in particular, are not the responsible party. It is the government who is accountable for the accident.
Such situations often spark debates about the issue of international unified standards of labor. The utopian claims of absolutism, as described by Donaldson, are not applicable and can be damaging and morally corrupt. He also attacks cultural relativism stating that it is ”morally blind”. This leads to a conclusion that denying both points the author contradicts himself: ethics depend on the context, but there are fundamental or absolute ethics. Such approach is simply logically deficient. The double contradiction lies with the combination of the two ideas and their prior denial. One can state that Donaldson would argue that Joe Fresh had to audit contractors before outsourcing their production and then refuse to move production to Bangladesh due to the violation of the government regulations. However, it does not mean that the building would not be exploited by some other investor or that it would not collapse. As it has been discussed above, the responsibility for the regulation enforcement primarily concerns the government. There can be no moral responsibility of the companies if the other parties initiated the actions.
In order to get a more clear understanding of Donaldson’s position, it is necessary to refer to the three principles he developed. They emphasize the importance of respect for the core human values (an absolute moral threshold) and respect for the local traditions and contexts for decision making. His definition of the core human values includes human dignity, respect for the basic rights, and good citizenship. As expected, the three should have provided some clarity to the definition of the core values; however, it can be observed that it is not the case. To begin with, the definition of ”value” has been an ongoing problem in axiology and the never-ending philosophical debate. Secondly, there is no guideline for defining what should be a core value and what should not. Thirdly, human dignity, basic right, and good citizenship have no definite interpretation. Thus, the ultimate question of what is ”good” will have an answer that will vary depending on the situations and contexts. Though ethics as a concept tends to universalize its claims, the practicality contradicts this method. The importance of the context is greater since the contexts are practical and require specific answers that can be immediately utilized. There cannot possibly be a set of guidelines or a moral code that people would apply without contemplation. This does not mean, however, that there are no common rules for common situations. Contexts coincide: they can be similar or resemble each other to a great extent and will have similar or even identical solutions. This is how the moral standards, in fact, any standards, occur: what applies to an extended number of situations is considered a law.
Reviewing Maitland’s position, it can be summarized that a defense against absolutes burdens the investors with responsibility. Maitland would claim that there is a serious threat from the absolutes. Though they seem to preserve values and once good practices, they still can become damaging and even dangerous in some cases. Nothing is stable since societies are dynamic and unpredictable in their development. Thus, any ethical code or absolute can create an inflexible culture, and adaptability, as it is known, is the most important skill for survival. Maitland regards the problem of absolutes and standards from the economic point of view. He claims that raising minimum wages to seem ”more ethical” causes unethical effects: the gap between the rich and the poor increases depriving those in the informal sector of a decent existence. The higher the salaries in the formal sector, the greater the level of unemployment is, which makes the income inequality gap increasingly difficult to bridge. In the developing countries, working conditions are typically substandard, as in the case of Rana Plaza; yet, people working in an informal sector are paid less and work in the more dangerous conditions. Even in the discussed case, the tragedy was almost avoided since the factory was closed until the local engineer provided misleading information, and people got threatened with salary cuts (Human Rights Watch, 2015). There is no ethical justification for killing innocent workers, same as there is no economic justification for such actions. Since capitalists are typically blamed for their unethical methods and disrespect for workers the in developing countries, clarification should be made. What Western societies consider evil is actually good in other contexts. The thing is that various societies have different stages of development, and their moral laws and ethical standards depend on their worldview. It is possible to enforce and promote Western values, but it does not mean they are able to accept them.
In my opinion that supports and expands Maitland’s argument, in the case of Joe Fresh factory collapse, the responsibility of providing and implementing ethical standards regarding labor and work conditions lies with the government of Bangladesh and all the people who directly benefit from illegal construction. The real question is who is responsible for such corrupt system. The people of Bangladesh are also responsible for their authorities. It is up to them to decide whether they are willing to comply with the existing system. More people can become the victims of corruption and criminals. Surely, the opponents of such position may argue that there are commonly accepted basic human rights that companies have to respect. However, the corporate social responsibility is a subject for a debate by itself.
In conclusion, having reviewed the major attitudes to the accountability and ethics in the global economy, it became evident that absolutism does not provide a valid basis for decision making. In the case of the factory collapse, Joe Fresh acted ethically within their activities and competencies. Corrupted governments are to be responsible for the absence of the economic and social goodwill in the country while investors bringing the benefits of capitalism need to be appreciated in their efforts.
Donaldson, T. (2008). Values in tension: Ethics away from home. In Donaldson, T., Werhane, P., & Van Zandt, J. Ethical issues in business: A philosophical approach (pp. 476-486). Upper Saddle River, NJ: Pearson/Prentice Hall.
Gomes, W. (2013, May 9). Reason and responsibility: the Rana Plaza collapse. Open Security.
Human Rights Watch. (2015, April 22). Whoever raises their head suffers the most: Workers’ rights in Bangladesh’s garment factories.
Maitland, I. (2008). The great non-debate over international sweatshops. In Donaldson, T., Werhane, P., & Van Zandt, J. Ethical issues in business: A philosophical approach (pp. 584-595). Upper Saddle River, NJ: Pearson/Prentice Hall.
Mirdha, U., & Rahman, S. (2013, April 25). Workers forced to join work. The Daily Star.