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Bangladesh’s Lessons for Enlightened Corporate Interest

Authors: Mark P. Lagon, Adjunct Senior Fellow for Human Rights, and Andrew Reddie, Research Associate, International Institutions and Global Governance
August 5, 2013
Georgetown Journal of International Affairs

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The Rana Plaza tragedy in which 1,127 people were killed and over 2,500 injured has finally led to international action for labor reforms that will improve worker welfare. While the new EU-ILO-Bangladeshi Sustainability Compact for Continuous Improvements in Labour Rights and Factory Safetyframework is a positive first step, international corporations continue to face the dilemma of whether responsibilities to their current and future employees outweigh profits and benefit to shareholders. Questions have also been raised by Wal-Mart, Gap, and Target refusing to sign the most recent, binding agreement on work conditions in Bangladesh.

In the wake of the factory collapse, customers, the public, shareholders, and the media have all made clear their collective disgust at deplorable working conditions in the country—it is estimated that these conditions have led to dozens of fires and other disasters over the past five years. With contracts in Bangladesh worth an estimated $20 billion per year, a whole host of corporations including Primark, Benetton, H&M, and Sears have had to question their continued participation in the Bangladeshi market.

In the days following the collapse, the Walt Disney Company announced its long-standing plan to pull out of the country and several other "high-risk" states, while others, including UK-based Primark, decided to offer victims compensation. In the coming months, companies will have to address how to respond to the latest in a long line of disasters to plague the local textile industry.

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