In early June, the authorities in Bangladesh filed murder charges against those involved in the collapse of the Rana Plaza factory in 2013. The owner, his parents and several government officials all face the death penalty if convicted. This is a stronger charge than the expected homicide charges and is based on the fact that they overlooked sudden cracks in the structure of the building, ordering employees back to work.
Meanwhile, the major U.S. clothing companies that used that factory and many others in Bangladesh have been increasing their checking of safety at their suppliers, and have formed consortia to effectively coordinate these checks. This is a big step forward from the earlier practice of rare checks (or no checks), but they are still checking less than one-third of the clothing factories in Bangladesh, leaving many unsafe factories with less-known (but usually foreign) customers.
In Bangladesh, people held responsible are being punished. In the U.S., companies buying from the factory were facing publicity problems and could also have been targeted by social movements against sweatshops if they had not acted quickly. So what drove the reforms? Threats of punishment or better understanding of the factory dangers?
Read more: How Firms Change Bad Practices | INSEAD Knowledge
