It’s easy to villainize a company like Walmart for being unwilling to sign an agreement seeking to improve safety for workers in Bangladesh. What’s harder is to assess the company’s actual motives, and its obligations.
Headlines recently blared that Walmart has refused to sign the new “Accord on Fire and Building Safety in Bangladesh”, despite the fact that 24 other companies (including Europe’s two largest clothing retailers, as well as American brand Tommy Hilfiger and Canada’s Loblaw) had signed.
Other news sources avoided the Walmart-centric hysteria and pointed out that lots of retail chains have in fact opted not to sign. For its part, Walmart says says it plans to undertake its own plan to verify and improve conditions at its suppliers’ factories in Bangladesh. Supporters of the accord, however, are skeptical about the effectiveness of the company’s proposed independent effort.
From the point of view of ethical responsibilities, could a well-intentioned company conscientiously decline to sign the pact?
It’s worth looking at a few reasons why a company might choose not to sign a pact designed to improve, and even save, lives. Walmart presumably believes that its own effort will be sufficient, and perhaps even superior. The company’s famous efficiency and notorious influence over suppliers lend some credibility to such a notion. Other companies have worried that signing the pact would bring new legal liabilities, which of course is precisely the point of a legally-binding document. (Gap, for instance, has said that it will sign only if language regarding arbitration is removed, a stance that effectively amounts to refusal.)
There may also be worries about governance: the accord provides for the appointment of a steering committee “with equal representation chosen by the trade union signatories and company signatories”—equal, but to be chaired by a seventh member selected by the International Labour Organization (ILO). Perhaps some worry that the ILO-appointed chair won’t really be neutral, giving unions an effective majority.
Other companies—including ones like Walmart, which is famous for its efficiency—may worry about the extra administrative burden implied by weaving this accord’s regulatory apparatus into its own systems of supply-chain oversight.
Another worry might be the fact the accord applies only to Bangladesh, and makes that country the subject of a separate set of procedures. The accord also commits signatories to expenditures specifically on safety in Bangladesh, when from a particular company’s point of view Bangladesh might not be a priority. In the wake of the April factory collapse, it’s worth pointing out that there are other places in the world with unsafe factories and crummy working conditions. It’s not unreasonable for at least some companies to focus their efforts on places where conditions are equally bad, and that host even more of their suppliers.
None of this goes any distance toward excusing inaction. None of it condones apathy. The point is simply that while failure to sign a particular accord makes great headlines, we need to look carefully at the reasons, as well as at a company’s full range of obligations, if we are to make sense of such a decision.
Chris MacDonald is Director of the Jim Pattison Ethical Leadership Education & Research Program at the Ted Rogers School of Management