How can you know whether the products you buy have been manufactured responsibly?
The issue of employee standards has been renewed by a Wall Street Journal investigation that found Amazon has been selling clothes from dozens of factories in Bangladesh that have been blacklisted by most leading retailers for dangerous workplace conditions.
The Journal also found banned items on Walmart.com and Target. Additionally, Sears and Kmart have been importing from blacklisted factories, the Journal reported.
“These [dangerous] factories that cannot get certified are selling to third parties, who then sell in marketplaces that are hosted by Amazon,” says Shawn Bhimani, a visiting assistant professor of supply chain management at Northeastern. “And that’s how we get into the trouble that we see today.”
Public awareness of these issues can be traced back to factory disasters of the past decade, epitomized tragically by the 2013 collapse of the Rana Plaza factory in Bangladesh that killed more than 1,100 people. In response to the international outcry, 200 brands of clothing sellers formed two groups: the Accord on Fire and Building Safety in Bangladesh, which is associated mainly with European retailers; and the Alliance for Bangladesh Worker Safety, which includes American companies Walmart, Target, and Costco.
Amazon, which is competing with Walmart to become the leading seller of clothes in the U.S., has not joined either of the safety-monitoring groups.
Amazon responded to the Journal investigation by removing some of the items from blacklisted factories and saying that it was reviewing the others, the Journal reported.
The Journal noted that more than two-thirds of the banned items were being sold by third-party sellers on Amazon’s marketplace platform, which includes millions of individual sellers—many of them anonymous. An Amazon spokesman told the paper that Amazon expects wholesalers and sellers to adhere to safety standards. According to the Journal, however, Amazon’s agreement with third-party sellers doesn’t explicitly hold them to that standard.
Bhimani explains how you can do your own instant investigations on the products you buy, and how Northeastern can help companies take responsibility for supply chains.
How is Amazon different from other American retailers?
Every major brand around the world is aware of the best practices, which ensure that products are made with fair pay in sustainable environments that are not reliant on forced labor, human trafficking, or unsafe working conditions.
Amazon doesn’t have necessarily the same obligations for its marketplace. Anybody can buy and sell on it, and not everybody plays by the same rules as major brands.
For Amazon’s own brand, they hire inspectors to certify their products. But for third-party sellers, I don’t foresee that Amazon would inspect all products because the scale is so huge—unless they’re forced to do it, which brings in government intervention and oversight as a possible way to make that happen.
Is the U.S. government pursuing measures to reduce the risk of unsafe supply chains?
The Business Supply Chain Transparency on Trafficking and Slavery Act, or H.R.7089, has been introduced to the House of Representatives. If that act were to become law, any company with over $100 million in sales would have to create transparency on where its products are coming from. The United Kingdom has already instituted similar requirements with the U.K. Modern Slavery Act. California was ahead of everybody else in the U.S. in 2012 when it implemented the California Transparency in Supply Chains Act.
The U.K. and California laws are forcing companies to implement best practices, but of course we’re not there yet from a global perspective.
Is it possible for consumers to find out whether the products they buy have been manufactured in a responsible way?
It’s not foolproof, but there are many systems in place to empower consumers.
There’s an organization out of the United Kingdom called Provenance. It’s a blockchain startup that enables consumers to scan a product and understand what was its provenance—where it came from, how it was made, and its impact on the environment and society.
There’s also the EWG Healthy Living app from the Environmental Working Group. You can scan products, and it can tell you not only the provenance of some products, but also how those products impact human health.
How can companies become more responsible?
Through Northeastern’s Corporate Learning programs, which includes faculty across the D’Amore-McKim School of Business, we can train companies in what we call “responsible sourcing,” which is how to limit the impact that we have on people and the planet when we create products and services and sell them across the world. From responsible sourcing to process improvement, we offer varieties of training that are available to improve corporate supply chains and reduce the real risks they face.