“Bad Goods,” Imported by Amazon, Inc.
The Rana Plaza building in Dhaka, Bangladesh, once housed five garment factories, many of which supplied U.S. apparel companies. The eight-story building contained clothing factories, a bank, apartments, and several shops. The shops and the bank on the lower floors were immediately closed after cracks were discovered in the building on April 23, 2013. But garment workers on upper floors were ordered to return the following day. The building collapsed during the morning rush hour. The collapse killed at least 1,132 people and injured more than 2,500. Five months earlier, at least 112 workers had lost their lives in another tragic accident, trapped inside the burning Tazreen Fashions factory on the outskirts of Dhaka.
For a photo of the collapsed building, see https://www.nytimes.com/2013/05/23/world/asia/report-on-bangladesh-building-collapse-finds-widespread-blame.html
After the Rana Plaza tragedy, most of the biggest U.S. apparel retailers joined safety-monitoring groups that required them to stop selling clothing from factories that violated certain safety standards. While other U.S. retailers such as Walmart Inc., Target Corp., Costco Wholesale Corp. and Gap Inc. have agreed to honor bans imposed by the two monitoring groups, to have their supply chains inspected, and to disclose to the groups the factories that supply them, among those that did not join was Amazon, Inc. According to a Wall Street Journal investigation, the Amazon website offers a steady stream of clothing from dozens of Bangladeshi factories that most leading retailers have said are too dangerous to allow into their supply chains.
(See Amazon Sells Clothes from Factories Other Retailers Blacklist. Wall Street Journal, Oct. 23, 2019. ) https://www.wsj.com/articles/amazon-sells-clothes-from-factories-other-retailers-shun-as-dangerous-11571845003
For example, a yellow gingham toddler top embroidered with flowers was among those clothes, listed on Amazon for $4.99 by a New York City retailer. The Journal traced the toddler top to a factory in Chittagong, Bangladesh, that has no fire alarms and where the doors allow managers to lock and keep workers inside. A laborer at the factory, 18-year-old Nasreen Begum, said she spends 12-hour days there stitching shirts with 300 others. “You’re trapped inside until the time you complete the orders,” she said.
Most of Amazon’s huge selection is offered by “third party sellers.” This means that Amazon is not the “seller” in the traditional sense, but is rather a platform on which sellers and buyers make deals. In litigation, Amazon has used its status as a platform to argue against any liability based on warranties (via contract law) or negligence (in tort law). Buyers using the Amazon platform to make purchases may not know or be able to learn about where the product is made.
Besides clothing, many non-apparel products sold on Amazon pose certain hazards, such as illegal levels of lead and cadmium in toys that are made overseas.
The Hidden Safety Risks of Your Amazon Order. Wall Street Journal, Aug.23, 2019. https://www.youtube.com/watch?v=7yUbvuFJFhk
Toys and many other products made overseas can appeal to consumers based on very low price, but their quality for human health and safety can be both low and dangerous. A Wall Street Journal investigation published in August of 2019 claimed that Amazon’s platform enabled the sale of some 4,000 items that were deemed unsafe by U.S. federal agencies. An earlier WSJ investigation counted many more. There were a few personal injuries, and at least one house that burned down as a result. The hoverboards largely shipped from unknown factories in China, and nearly half were bought through Amazon’s site.
Non-government organizations and some retailers are starting to criticize Amazon for allowing these goods (apparel, toys, and other products) to be sold on their platform; but the Wall Street Journal, which did a lot of the investigative reporting noted above, reported on the best-managed companies of 2019: Amazon took the #1 spot. (Microsoft, Apple, Alphabet, Cisco, and Facebook took spots #2 – #6). Amazon got “three stars” for social responsibility, Alphabet and Facebook got “four stars” while Apple and Microsoft got five stars.
The industry is being disrupted by Amazon, and other retailers are scrambling to keep up: retailers continually must keep up with Amazon’s moves, and the more they spend to do so, the more their profits drop. Even when they manage to attract customers, Amazon comes up with new ways to deliver inexpensive items quickly and conveniently.
In August, three U.S. senators wrote a letter to CEO Jeff Bezos, asking him to take action to stop the sale of unsafe items and to ensure accurate warning labels on his company’s giant sales platform. The letter, signed by Senate commerce committee members Richard Blumenthal (D., Conn.) and Ed Markey (D., Mass.), along with Bob Menendez (D., N.J.), detailed the findings from an August 2019 Wall Street Journal article, and asked for a response from Mr. Bezos.
What will happen? Will
Jeff Bezos respond? Maybe. But it’s unlikely that a company is well insulated
from legal accountability will worry too much about its reputation, especially
where the same Wall Street Journal both celebrates Amazon as the best managed
company and reveals the devilish details in its overseas suppliers.