In a globally competitive marketplace, manufacturers have to maintain competitive prices, while enhancing product quality. That puts constant pressure on companies to reduce manufacturing costs. Increasingly, that has led to outsourcing and offshoring manufacturing activities. That being said, a company’s pursuit of lower cost in no way justifies putting the health and well being of the employees of suppliers at risk.
There are many steps that companies can take to promote worker safety in factories abroad, starting with the contract they sign with suppliers overseas. Those contracts need to be very specific about the conditions under which their products are manufactured. Continued violation of those guidelines should lead to cancellation of the contracts. It is also incumbent upon the U.S. companies to work with those suppliers to create the desired work environment.
Another issue is assuring that the suppliers are complying with those guidelines. In some instances companies use “in-plants” of company managers in the factories. That is expensive, but also the most likely strategy to work. The company may also make periodic visits to the plants to see working conditions first-hand. Those visits are most effective if they are unannounced. The company may also use reputable third parties in the region to make those factory visits.
So from all information above, I think U.S. companies should take primary responsibility for working conditions in their international suppliers’ factories.