Unethical Practices and Sweatshops in Developing Countries

The Phenomenon of Sweatshops

The global marketplace is driven by intense price competition as well as quality considerations. This means that those exporters who can offer quality at the lowest price often bag the orders from the global corporations like Nike, GAP, Apple, and other western multinationals who outsource their production to emerging markets. Since the exporters have to cut costs to actualize profits at the lower rates that are competitive, they often resort to making the workers work in abominable conditions along with paying them paltry sums of money as wages. This phenomenon has been termed as the rise of the sweatshop culture where workers in garment factories, chip making units, diamond polishing facilities, and factories of the global exporters work in conditions that take away safety and benefits.

Indeed, the situation has become so critical that in recent months, there have been a spate of incidents in these sweatshops that have brought back the spotlight on them. Starting with the collapse of a building in a garment-making unit in Bangladesh, to outbreaks of violence in Apple product making factories in China, to organized violence in automobile factories in India, workers are increasingly turning their ire on these unethical practices and the perpetrators of these practices.

The Role of the Corporations, Exporters, Governments, and Consumers

Some of the blame for this situation obviously lies with the global exporters. However, governments and the governmental agencies in the emerging markets like the labor officers and the law enforcement personnel cannot escape their share of the blame. Though it is good to be competitive in the global arena, this competitiveness cannot come at the expense of compromises on safety and the health of the workforce.

Further, the global exporters often point to the fact that if they do not deliver the volumes at low prices, other exporters in competitor countries would take the business away from them. While this defense is indeed valid and true to some extent, the larger point about the need for global exporters to forego some profits for the workers welfare cannot be ruled out. Moreover, the global corporations have to take some of the burden of ensuring that their products are made in safe and healthy work conditions.

The consumers in the west are also stakeholders as their need for ever and more and more cheaper products is resulting in the creation of sweatshops around the world. To sum up, all stakeholders of the global manufacturing supply chain have to agree that they can do their bit to improve the conditions of the poor workers in sweatshops in developing and industrialized countries.

Steps to Mitigate the Problem

The steps to create safe and healthy conditions for the workers in emerging markets would include:

  1. Better enforcement of the labor laws

  2. Lobbying by activist and advocacy groups with the western governments to insist on their corporations to agree to voluntary and law mandated monitoring of their production facilities in Third world countries.

  3. Finally, the spreading of the awareness among global consumers that the products that they think are cheap are indeed coming at the expense of the lives of millions of poor who cannot afford them anyway.

This means that all stakeholders have a part to play in this process. There is already a movement towards certification of the products consumed in the West as being labor friendly on the lines of the “Green” label that mark products made in an environmentally friendly manner.

The point here is that whereas environmental responsibility has entered the global consciousness, social responsibility has still not steeped into the consumer mindset. This is partly because the Green movement has been successful in convincing consumers and warning them of the dangers of environmental destruction. Likewise, there is a need for activists and governments to persuade the corporations to adopt a label on their products, which indicates that the product has complied with social norms and worker welfare.

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Corporate Social Responsibility