Ethical Dimensions of The Rana Plaza Scandal _ Business Ethics Reflection

The Tragedy

Dhaka is one of the poorest cities in the world. 75% of all export income derives from the
manufacture of clothes for wealthier nations. {{329 Journeyman 2013}}

On 24 April 2013, the deadliest accidental building collapse in history occurred. The Rana
Plaza building catastrophically collapsed, bringing down the entire 8-storey structure. 1,136
workers were killed and over 2,500 were injured (International Labour Organisation, 2015).
Many of the survivors are unable to find work due to disabilities from their injuries and
others are too traumatised to return to work.

Multiple factors lead to the inadequacy of the buildings structure, including: illegal
construction; poor code regulations; lack of inspections; and decisions of the managerial
staff. The building was built without observing appropriate building codes and laws, using
poor materials without concerned authorities enforcing regulations.

Ethical Dimensions

There were many stakeholders {{326 Freeman,R.Edward 1984}} involved in this tragedy and
we have identified the victims and their community, the Bangladeshi government, the
consumers, the owners of Rana Plaza and ourselves, Wal-Mart, amongst others to have had
an involvement in this. Workers were forced into an unsafe work environment, regulations
were not adhered to and the consumerism culture of driving prices downwards have all
been part of a tragedy that requires a global adoption of higher ethical standards from all
stakeholders.

Sohel Rana, owner of Rana Plaza, used his aggressive tenacity and political connections to
acquire illegal permits and bribe government officials for constriction approvals. Emdadul
Islan, chief engineer of the state-run Capital Development Authority, told the media:

“The owner of the building obtained a permit for a 5-storey building. The building was
however, illegally extended to a total of eight.” {{328 Gomes, W. 2013}}

On the day prior to the collapse, warning signs developed through numerous cracks to the
structure followed by caution reports from engineers, were ignored by the garment factory
owner and managers, leading to an unsafe working environment for the garment
employees. Reluctant employees returned to work within the building through ultimatums
made by the owner.
The Bangladeshi authority has neglected their obligations to enforce working regulations
and general considerations for human rights. The Bangladeshi Prime Minister, Sheikh
Hasina, has callously dismissed the tragedy in Savar by stating on CNN that “accidents
happen”. Additional, Finance Minister Abdul Muhith remarked, after the death toll
surpassed 530, the disaster was not “really serious”. The state has a duty to protect its
citizens against human rights abuse through regulation, policy-making, investigation and
enforcement {{328 Gomes, W. 2013}}

In the aftermath of this collapse, the Bangladeshi government has begun implementation of
new building codes, inspection procedures and safety standards of factories. These
initiatives are designed to encourage sager construction practices and working conditions to
empower industry inspectors. This has created an increased involvement from corporations
who contract work to factories in Bangladesh.

Wal-Mart did not deliberately engage with contractors who practised unethical behaviour.
Neither was it our belief that our suppliers would neglect the high standards we ask of them
to agree to. In saying this, we acknowledge an improvement of both internal and external
ethical practises is required to ensure compliance to our Standards for Suppliers.

Wal-Mart has been creating employment and economic development by engaging with the
Bangladeshi textile industry and has been contributory in introducing this industry to the
global markets for development. As is our commitment to this industry, we will continue our
engagement with the Bangladeshi government in establishing ethical work practices of an
international standard.

Due to our commitment, we request our customers, the consumers to be understanding of

our standards and further improvements. In our efforts to build a stronger global society,
we would ask our customers to commit to Wal-Marts efforts by supporting our incremental
price increases in continuing efforts of improving the ready-made garment industry in
Bangladesh. By working together in our developed nation, we can assist developing nations
to better their standards of work as well as pressure their governments to regulate the
industry more stringently.

Standards for Suppliers

Through this tragedy we have seen human rights violations that were not visible to us prior.

Wal-Mart has a firm commitment of care in our supply chain with safety of workers as a
priority. Further measures have been implemented to prevent “un-authorised sub-
contracting” through our “zero-tolerance policy” {{330 Mosk, M. 2013}}. In 1992, we created
a code of conduct for suppliers, called “Standard for Suppliers. This code was created with
the intention to monitor suppliers based on price control, quality and deliverance of
products. This did not include legal obligations towards the employees of the suppliers nor
the engineering construction of buildings. We are working closely with industry stakeholders
to improve standards for workers across the industry and continue to update our Standards
for Suppliers.

By working with the stakeholders, including the Bangladeshi government, we are committed
to reforms within the industry. Wal-Mart has taken the lead by founding the Alliance for
Bangladesh Worker Safety (Alliance) and employed an independent body, Bureau Veritas, to
complete inspections of factories in Bangladesh {{327 Walmart}}.

Wal-Mart has contributed $3 million to BRAC, a global NGO in Bangladesh, with $1 million
directly to Rana Plaza Donors Trust Fund.

Management Educations Role

{{331 Smit,Arnold 2013}} argues that management education has a responsibility in “shaping
ethical and functional paradigms”. He believes that, although businesses have progressed
economically, they have increased in complexity and have sustainability concerns. These
concerns require management educational institutes have the responsibility of developing
meaningful theories related to ethical practises for managers in business.

{{332 Buchholz,Rogene A. 1982}} outlines the objectives of a business ethics course is to

guide students in both “personal and professional decisions”, while considering the various
stakeholders and society.

{{291 Duska,Ronald F. 1991}} argues that management education requires evaluation on

how it is taught. He believes there are a number of commonly accepted morals that can
serve as a base for a global code of ethical conduct.

Conclusions

The Rana Plaza collapse was and is remembered as a very tragic incident. Without such an
incident, the developed world would not have known about the related ethical issues that
have been prevalent in Bangladesh. These issues include: child labour; unsafe work
environments; government corruption; below poverty pay rates; forced labour; and many
more which developed nations view as unethical. Although it was a tragic event, developed
nations would be blissfully unaware as they continued to purchase clothing from major
retail brands manufactured in that factory.

It is evident that developed nations consumers have a responsibility in ensuring that the
products they consume are from reputable retail outlets, which have traceable supply
chains. This holds true for the same corporations who have a responsibility to ensure their
supply chain is ethically sound.

Amongst all these revelations, management education has been brought to the forefront of
managers’ ethical behaviours. Educational institutes have a responsibility in ensuring that
ethically education is taught in a holistic manner but also that relevant managers are
equipped with the means to make informed decisions.

References

International Labour Organization (23 April 2015) Rana Plaza commemoration highlights
progress made and challenges ahead in Bangladesh ready-made garment sector. Last
accessed 11/06/2015
http://www.ilo.org/dhaka/Informationresources/Publicinformation/Pressreleases/WCMS_3
62988/lang--en/index.htm