Let No Global Supply Chain Disaster Go to Waste: Op-Ed by Dean Chakravorti

The Huffington Post

Bhaskar Chakravorti is a Senior Associate Dean at The Fletcher School of Law and Diplomacy, Tufts University.

Rana Plaza, Foxconn, Deepwater Horizon: Let No Serious Global Supply Chain Disaster Go to Waste

The Financial Times ran a June 20, 2013 editorial about the potential abuses of the compensation process associated with the $8 billion set aside by BP to fund the victims of the Deepwater Horizon rig disaster. The FT urges, "Gulf settlement should be fair, not an exercise in extortion." Methinks that, the FT doth protest too much. While the distortions of the US tort system are far from ideal, there are worse problems to be had when dealing with the consequences of corporate supply chains going rogue. Moreover, with companies chasing low cost locations, willing governments eager to welcome foreign investments and potential for untapped natural resources, the global supply chains are growing in the developing world; these are also the regions least equipped to deal with the associated challenges. While the developing economies have grown quickly, the institutions (such as rule of law, labor, environmental, workplace, health and safety, human rights standards, anti-corruption measures, etc.) have not kept pace.

It is hard not to remember the rising daily death count from Rana Plaza, the Bangladesh garment factory building, that collapsed on April 24 and led to the loss of over a 1,100 lives. Prior to that, were the stories of Foxconn and its insanity-inducing working conditions producing -- what Steve Jobs loved to call the "insanely great" -- products from Apple. Will there be a honeypot anywhere close to the $8 billion set aside for Deepwater Horizon to compensate the destitute and exploited workers from these other supply chains? More broadly, will there be any real and enforceable action on systematically preventing irresponsible behaviors and outright abuses from happening?

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