Name of case: THE DHAKA FACTORY FIRE November 24, 2012
Background:
Opened in 2009, the Tazreen Fashion factory, part of the Tuba group, employed 1,630 workers, who produced T-shirts, polo shirts and jackets. The factory produced clothes for various companies, including the US Marines, Dutch company C&A, American company Walmart and Hong Kong company Li & Fung. The Tuba group is a major exporter of garments from Bangladesh to the U.S., Germany, France, Italy and the Netherlands, whose clients include Walmart, Carrefour and IKEA.
According to Tazreen Fashions' web site, the factory was flagged in May 2011 with an "orange" grade by a Walmart ethical sourcing official for "violations and/or conditions which were deemed to be high risk". The notice said that any factory receiving three such assessments in two years would not receive Walmart orders for one year. The orange rating was the first the company had received, and was followed by a "yellow" medium risk rating the following August, which pertained to the factory where the fire occurred. On November 25, a Walmart spokesman said he was "so far unable to confirm that Tazreen is a supplier to Walmart nor if the document referenced in the article is in fact from Walmart"; the company subsequently terminated its relationship with Tazreen, stating that "The Tazreen factory [in Ashulia] was not authorized to produce merchandise for Walmart. A supplier subcontracted work to this factory without authorization and in direct violation of our policies." Walmart critics claim that the company knew about unsafe conditions and blocked efforts to improve them. According to The New York Times, Walmart played a significant role in blocking reforms to have retailers pay more for apparel in order to help Bangladesh factories improve safety standards. Walmart director of ethical sourcing, Sridevi Kalavakolanu, asserted that the company would not agree to pay the higher cost, as such improvements in electrical and fire safety would be a "very extensive and costly modification" and that "it is not financially feasible for the brands to make such investments."
Fire:
The fire, presumably caused by an electrical short circuit, started on the ground floor of the nine-story factory, trapping the workers. Because of the large amount of fabrics and yarn in the factory, the fire quickly spread to other floors, complicating firefighting operations. The fire burned for more than seventeen hours before firefighters succeeded in extinguishing it.
Most victims were found on the second floor, where at least 69 bodies were recovered. Witnesses reported that many workers had been unable to escape through the narrow exits. Twelve of the victims died leaping from windows to escape the flames, some of them dying of their injuries after being taken to area hospitals. Other workers who had escaped teo the roof of the building were successfully rescued. The fire department's operations manager stated that the factory lacked emergency exits that led out of the building. Of the building's three staircases, all three led through the ground floor, making them unusable in the fire.
A crowd of thousands of relatives and onlookers gathered at the scene, and army soldiers were deployed to maintain order.
Analysis:
The largest Bangladesh factory fire in recent times killed 112 people this last November. This horrible incident raises once again the dilemma of who bears responsibility in such a tragedy. As we examine this case, we have singled out specific players who might bear significant responsibility for this particular event. The Bangladeshi government has the dual responsibility of taking care of its citizens as well as maintaining its economy by supporting the $20 billion a year garment industry that serves as 80% of its total export earnings. The workers, mostly women, earn as little as $37 per month and depend on the government for their safety; however, corruption runs rampant in Bangladeshi politics and the country is currently ranked 142nd out of a 176 countries according to the Transparency International Corruption Perception Index. In this case, there are also implications of arson to further political interests of specific parties. Additionally, the owner of the factory constructed five more illegal floors beyond the original structure, and the factory location was in an area that large vehicles, specifically fire trucks, could not easily enter. Major international retailers have often been criticized for not taking responsibility for their subcontractors; companies whose products were produced at this particular factory include major retailers such as Walmart and Sears.

Our response:
We assign the majority of responsibility in this case to the government, which has failed to protect its citizens and factory workers on multiple occasions. This most recent factory fire, although more deadly than any in recent memory, is unfortunately not a rarity in Dhaka. The Bangladeshi government fails to properly enforce safety standards they set because of the fear of the impact that those regulations would have on the garment exports. Although there has been an initial outcry against major companies, such as Sears and Walmart, who have subcontracted labor to different Bangladeshi factories, we believe that they are less culpable than the Bangladeshi government because of their degrees of separation from the actual event. Although we recognize the financial constraints and the associated corruption faced by the Bangladeshi government, we believe that only a local authority could create significant change in how safety is valued. The bottom line is that if the government regulations were properly enforced, factory fires, which are all too common in Bangladesh, would reduce in number resulting in safer working conditions for factory employees. Bringing these factories up to code would, however, create another cost for factory owners. This cost could either cut into the owner’s profits, cut the wages of factory workers, or be paid for by an increase is production costs paid for by subcontractors, which would be passed on to the multinational corporations that use these facilities to create goods. Ultimately, there is a tradeoff here between profit and safety. It has been estimated that a quarter of the factories in Dhaka are not up to current safety codes. If the government enforces these regulations, there will be less business generated because costs would increase, but the factory employees would be able to work in a safe environment and disasters like this fire would become much less like

The question:
Do you think that it is the government’s responsibility to enforce safety regulations and bring these factories up to date, or should more be done by multinational corporations that use these factories in order to ensure the safety of their supply chain employees?