The Walt Disney Company pulls out of Bangladesh: Will that make workers safer?

The Walt Disney Company pulls out of five developing countries – including Bangladesh, site of a devastating building collapse of a garment factory – telling licensees of Disney-brand items of its decision to phase out production there. Critics say pulling out is not the best response.

The Walt Disney Co. is pulling out of Bangladesh and several other developing countries, in part because of fatal accidents in factories that produced branded merchandise for Western firms.

Announcement of the move follows last week’s collapse of a Bangladesh garment factory building, a tragedy that may be the worst such accident in world history. The official death toll is now more that 500 and keeps climbing as rescue workers continue the slow process of working through building rubble.

Disney officials said their pull-out decision was actually made in March, after a fire in a Bangladesh factory last November that killed more than 100. The company has told licensees that it wants to phase out production of Disney-brand items made in Bangladesh, Pakistan, Belarus, Ecuador, and Venezuela.

Disney said it relied on World Bank Governing Indicators, which measure rule of law, corruption, and other national characteristics, to help make its decision.

“After much thought and discussion we felt this was the most responsible way to manage the challenges associated with our supply chain,” said Bob Chapek, president of Disney Consumer Products, according to a CNN report.

Are Western firms such as Disney, the Gap, and Benetton in part responsible for the conditions that lead to these tragedies in low-wage nations? Disney’s move shows that some feel their reputations are at risk, at the least, if they are tied too closely to foreign workplace tragedies.

Customers may avoid brands they suspect of abetting worker abuse. And a number of international nongovernment organizations today stand ready to publicize poor conditions found in factories linked to major nation retail brands.

But these NGOs don’t necessarily want their pressure to result in pull-outs. They want corporations to use their economic muscle to improve conditions.

The Washington-based Workers Rights Consortium, for instance, says it works with big companies and their foreign licenses to try to remedy problems before issuing public reports.

“The WRC views ‘cutting and running’ from a factory as a serious abrogation of a licensee’s responsibilities,” says the group in a statement.

Worker groups often want foreign firms to stay to preserve jobs and economic development. Some experts say the blame for tragedies such as the Bangladesh building collapse should be directed at local and national authorities who have the responsibility to protect their workers.

“By misassigning the responsibility for the recent tragedies to global retailers, western media and consumer movements allow the real culprits to get away scot-free and further diminish the likelihood of governance reform in poor countries,” wrote Jagdish Bhagwati, senior fellow for international economics at the Council on Foreign Relations, and Amrita Narlikar, director of the Centre for Rising Powers at the University of Cambridge, last month in the British magazine Prospect.

Other experts put the problem in a larger political frame. The real problem in Bangladesh has been the complex trade apparatus erected by the US, which consumes most of the cheap clothing produced in developing nations, wrote Mallika Shakya, an assistant professor of sociology at South Asian University in Delhi, in the Indian newspaper The Hindu.

Between 1974 and 2004, the US Multi-Fiber Arrangement virtually dictated, item by item, the amount of clothing that third-world countries could export to the US, according to Ms. Shakya. Potential rivals to America such as China got small quotas, while Bangladesh and other unprepared nations got large ones.

The result was that Bangladeshi authorities could not keep up with the explosive growth of their country's garment industry.

“That is a reason why most factory buildings are found to be built haphazardly, without acquiring the necessary clearance from state agencies,” wrote Shakya.