UK companies should be held responsible for their activities in developing countries

Written by
Mark Learmonth

29 Aug 2016

29 Aug 2016 • by Mark Learmonth

Sports Direct scandal

Mike Ashley was rightly criticised for turning a blind eye to (or not knowing about) the appalling situation in his UK Sports Direct warehouse. Fortunately, the kinds of practices undertaken by Sports Direct in Derbyshire – deliberately paying staff less than the minimum wage and denigrating and humiliating workers as a matter of a policy – are unusual in the UK. We are lucky that on the whole executives are aware they are unlikely to get away with such things for long. More importantly, most would surely find them ethically unacceptable.

However, if we were to take a more global perspective on the issue of worker exploitation, what seems to have happened is that rather than having stopped, these kinds of practices have merely been exported overseas. In fact, many are still widespread throughout the Global South – and often the abuses are much, much worse than those perpetrated by Sports Direct. The reality is executives in UK companies are more likely to be able to turn a blind eye with impunity, even to the most inexcusable practices in work places in developing countries. Except when there are huge disasters – such as the collapse of the Rana Plaza building in Bangladesh (in which at least 1,137 people died) – widespread exploitation can take place under the radar of the British public.

Being aware of your surroundings

And even in the case of the Rana Plaza – which many of us will have at least heard about – the full story has not been widely told in the UK. This is in spite of the fact that most of the people killed were making garments for clothing brands that are very well-known to us. Did you realise, for example, that workers refused to enter the building on the morning of the disaster because there were major cracks in the walls, but the owner paid people to beat them with sticks and force them into the factory? Or that of the 29 brands identified as having sourced products from the Rana Plaza, only nine attended meetings to agree on compensation to the victims, and several companies refused to sign?

While there has been a positive response from the fashion industry to the disaster – most notably the creation of a legally binding Accord on Fire and Building Safety in Bangladesh – it seems likely that many less catastrophic abuses still go on throughout the Global South. The report about Sports Direct contains a tacit acknowledgment that in this respect the UK is lucky: “for this [scandal] to occur in the UK in 2016 is a serious indictment of the management at Sports Direct”. I think the challenge facing UK companies is to try harder to stamp out similar abuses internationally. Another pressing matter is the role of consumers; the continued demand for cheap goods can only be met at the cost of exploitative wages and working conditions. As consumers, we are aware of this and should therefore take part of the blame. 

In regards to the wrongful practices denounced at Sports Direct and those of some companies in developing countries, more surely can and should be done. The report expresses the view that “in a well-run company, widespread evidence of poor working practices would be detected at an early stage, reported to the board and properly addressed.” Quite; let’s make sure that this comment is acted upon fully, not just in the UK but across the world.