This past Tuesday I had the honour of being invited to testify before the Standing Committee on Foreign Affairs of Canada’s House of Commons. The hearing was part of a “study on corporate practices by companies supplying and manufacturing products in developing countries for Canadian consumers.” The discussion wasn’t specifically about the factory that last month collapsed in Bangladesh, but that sad event was certainly on everyone’s mind.
Other witnesses included representatives from the Retail Council of Canada (RCC), Loblaw, the Shareholder Association for Research and Education (SHARE), and Gildan Activewear Inc.
Not surprisingly, a range of views were presented to the Committee. Strong government intervention? Solo efforts by individual companies? Collective action through groups like the RCC? Opinions differed on just how to proceed.
Equally unsurprising was that the witnesses were unified in their expression of deep sympathy for the people of Bangladesh. Everyone, as far as I could tell, was also in favour of improving working conditions in places like Bangladesh. Shareholders, for example, according to SHARE’s Peter Chapman, are and ought to be concerned about the “ESG” (ethics, social and governance) obligations of the companies they invest in. Robert Chant—a senior VP at Loblaw, a company that commissioned clothing from one of the companies that worked out of the doomed Bangladesh factory—said that while his company has always been concerned to monitor working conditions, they simply hadn’t thought to have their subcontractors’ buildings inspected. It wasn’t on their radar. Chant, who showed genuine emotion during his testimony, said the tragedy “shook us to the core,” and has spurred his company to commit to doing better.
In my own testimony, I made three key points and three recommendations:
First, I noted that Canadian companies do indeed have ethical obligations that go beyond the legal minimum required by the governments of the countries in which they operate. Adherence to the law is seldom enough to guarantee that a company or individual has satisfied all relevant ethical obligations. This is of special significance in developing countries with underdeveloped legal and regulatory systems.
Second, we cannot expect companies operating in places like Bangladesh or China to adhere to Canadian labour standards. And perhaps no one expects that. Canadians generally enjoy high pay and high labour standards because we can afford to. Other countries, unfortunately, are not there yet. Our most reasonable hope is for steady progress on working conditions, not revolutionary change.
Third, I suggested three ways Canadians can contribute to the well-being of those who work in factories in places like Bangladesh. One, Canadians can continue buying things made in places like Bangladesh, because that is what gives a high proportion of Bangladeshis jobs. Two, make charitable donations, both to humanitarian groups as well as to groups that are focused on issues like good governance and fighting corruption. And three, continue encouraging Canadian institutions—businesses, governments, and NGOs—to keep working toward making things better. All have a role to play in encouraging and offering guidance on the pursuit of incremental improvements in working conditions in developing nations.
Chris MacDonald is Director of the Jim Pattison Ethical Leadership Education & Research Program at the Ted Rogers School of Management