Operating a Profitable Compliance Business

A middle rank bureaucrat goes to a factory manager to demand a bribe.

Bureaucrat: Give me money or I will ensure you fail your next compliance inspection.

Factory ownerI paid your people yesterday to ensure that I would pass the next surprise compliance inspection scheduled for next Tuesday at 11:00 PM.  Surely they gave you your share.  Why should I pay twice?

Bureaucrat: I retire at the end of the year and I am collecting for my retirement fund.

Factory owner:  What do I care about your retirement fund?   “I pay your people once a month and once is enough.

BureaucratI do not have time to argue.  I have to visit 70 factories this week.  If you do not pay, my team will arrive tomorrow; find 100 deficiencies and close you down.

Factory ownerHow much and will take a check?

Today compliance has little to do with workers’ rights or working conditions.  Compliance is a business, and business has never been better.

For a relatively small sum, factories are informed in advance the dates for unscheduled compliance audits to ensure no child labor, no contract labour and that everything is a-ok.  For a slightly larger sum, bars on the windows, doors chained shut, and sewers working past midnight become invisible to the inspectors

To increase sales volume, governments routinely enact labour laws so rigorous that it is impossible to be in compliance.  This allows corrupt governments to show they are on the side of the angles, while at the same time ensuring that factories join the team.  Factories have no choice — pay up or go out of business

Compliance has become a license to permit the poorest working conditions while at the same time denying workers any rights.

The good news is that once you have paid your dues, you are free to operate totally free from all legal constraints. Anything goes.

  • 10 year old children:  No problem
  • 70 hour weeks:  Go right ahead
  • Bars on the windows:  Be our guest

Pay your dues and receive your very own get-out-jail-card.

The episode of the retiring compliance bureaucrat is a true story and more interestingly did not take place in Bangladesh.

In this regard Bangladesh is not unique, but simply on the leading edge of the compliance extortion industry.

As shown in a recent BBC televised a program, while factories in other countries may force sewers to work a 70-hour week, at least one factory in Bangladesh has moved up to a 19-hour workday. And, while factories in other countries have bars on their windows, the Bangladesh operation now chains their doors shut, trapping the workers inside.

One customer whose garments were physically held up by sewers working in the Dhaka Gulag, claimed that the company does no business with the offending factory and that the garments in question were placed in that factory by people out to get them.  Personally, I am trying to imagine the circumstance in which this assertion may be plausible. The most reasonable scenario involves Voldemort and J.K Rowling’s forthcoming book Harry Potter and the Factory of Doom.

Bear in mind that Bangladesh is the country where government believes that compulsory arbitration is best achieved by gassing and shooting striking workers.

One point is clear; so long as the customers who have banded together to “Save” Bangladesh are unwilling to extend their protection to the workers locked up in the factory of doom or to those demonstrators being assaulted by the armed police, they are complicit.

By refusing to speak out, these same customers have become accomplices.  For the past 15 years customers have given Bangladesh a free pass.  The most recent efforts to “Save” Bangladesh have simply raised the free-pass card from gold to platinum.

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