Outsourcing atrocities rock Australia

by HCA26 Jun 2013

Outrage over poor working conditions has prompted Australian consumers to demand better working conditions for outsourced employees of clothing manufacturers, a report from Oxfam found.

The disastrous working conditions bring to light the necessity for organisations to have a deep understanding of their supply chain and the moral decisions of suppliers, clients and customers.

Of the people surveyed, 83 per cent stated they wanted clothing retailers to be more transparent about the locations of their supplier’s factories. Additionally, almost 70 per cent said they would gladly pay more for goods if it meant for better conditions for the workers involved.

The concerns and reports stem primarily from the collapse of the Rana Plaza in Bangladesh on 24 April. The collapse of the illegally built factory claimed the lives of more than 1,000 workers, as reported by The Sydney Morning Herald (SMH).

The disaster is simply one of many, with the poor conditions of buildings carrying over to the inhumane living conditions of the workers. SMH reported on the one-room home of a sewing machine worker, who earns the equivalent of $69 per month. The man lives with his wife, and the couple share four toilets with more than 100 others.

Coles, Target, Cotton On and Forever New have all been named as companies that have outsourced to illegal and dangerous factories in Bangladesh. However, Cotton On, Target and Forever New recently signed on to The Bangladesh Accord on Fire and Building Safety along with Kmart.

This accord results in the creation of publically available, independent reports on the working conditions, as well as allowing employees to refuse dangerous work.

Coles has said they will be pulling out of Bangladesh for the most part, and if they choose to return will only do so if conditions improve, The Guardian reported. Coles also stated they are prepared to sign The Bangladesh Accord if they return.

 “Corporations have to take responsibility for the supply chain, and that comes out in lots of different ways,” Katherine Teh-White, managing director at FutureEye, told HC.

The development of corporate social responsibility (CSR) as a core part of an organisation’s culture is crucial, as it is too late once lives have already been lost.

“It shouldn't take a really significant crisis to realise ‘oh I see, we’re really out of line with society’s expectations’,” Teh-White said. “The lower cost way is looking at lead indicators of what are the social norms of society, and doing a gap analysis of the way you think as an organisation, and the way your leaders think, and the way society thinks, and how that impacts on the behaviours and sorts of issues that you may confront – and plan those out earlier.”

Teh-White argues that indicators of poor working conditions are evident to organisations far before the consequences are reaped. “I think the modern-day expectation is really that if you don’t take in the spirit of responsibility of the supply chain, and that includes all of the people that are being employed by you either directly or via your contractors, then you haven’t understood the social responsibility dynamic that has been emerging over the last 15 years.”

Interested readers should review the cover story on CSR in an offshore world in Human Capital issue 11.05.


  • by Rob 26/06/2013 3:15:49 PM

    This issue goes right to the heart of what organisations deem to be value. In all of the companies mentioned value = $$ and are prepared to do whatever it takes to appease the shareholders. I would also challenge the HR functions of these companies and ask why they let a culture of gain and greed develop - If HR is going to play a strategic role, then this is an excellent example of what not to do. I would encourage readers to read the book "The Puritan Gift" - it's a great read on why so many companies go into downfall when they only see value as $$'s. I would also suggest understanding your organisational HR Maturity level - it is a significant and trusted KPI that will allude to why these issues happen in companies.

  • by Alex Martin 17/09/2013 6:14:13 PM

    equal rights should be observe for every employee. A good working condition and environment for the employee can make a lot difference for their productivity too

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