Preventing Factory Fires through Contracts: Case study of Garment Factories in Bangladesh

Authors

  • Sato Hideki Kyushu Sangyo University

DOI:

https://doi.org/10.18533/ijbsr.v5i4.757

Keywords:

Garment factory fires, optimal contract, retailer, safety measures.

Abstract

Following a multi-decade history of lethal fires in the Bangladeshi garment industry, Sato (2012) proposed a contract framework that encourages manufacturers to adopt measures that reduce loss of life. Apart from the humanitarian imperative, the manufacturer has an incentive to sign the contract and adopt its preventative measures because an industrial disaster will cancel its relationship with its global retailer and end the related profits. This theoretical study specifies the optimal contract that incentivizes manufacturers and reduces the occurrence of garment industry fires.

Author Biography

Sato Hideki, Kyushu Sangyo University

Ph.D.Professor,Faculty of Economics

References

Akhter, S., Salahuddin, A. F. M., Iqbal, M., Malek, A. B. M. A., & Jahan, N. (2010). Health and occupational safety for female workforce of garment industries in Bangladesh. Journal of Mechanical Engineering, 41(1), 65–70.

Paul-Majumder, P., & Begum, A. (2000). The Gender Imbalances in the Export Oriented Garment Industry in Bangladesh, Policy Research Report On Gender And Development Working Paper Series, No. 12, The World Bank.

Sato, H. (2012), Protecting against Disaster with Contracts, International Journal of Humanities and Social Science, 2(17), 251–253.

The Daily Star, December 15, 2010c, 26 killed in factory fire, http://www.thedailystar.net/newDesign/news-details.php?nid=166145, accessed November 12, 2013.

The Daily Star, December 14, 2010b, 23 killed in Ha-Meem factory fire. Retrieved from http://www.thedailystar.net/newDesign/latest_news.php?nid=27425.

The Daily Star, February 27, 2010a, Major RMG fires since ‘90. Retrieved from http://www.thedailystar.net/newDesign/latest_news.php?nid=27425.

Walmart Statement on Fire at Bangladesh Garment Factory, Retrieved from http://news.walmart.com/news-archive/2012/11/26/walmart-statement-on-fire-at-bangladesh-garment-factory accessed November 12, 2013.

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Published

2015-04-29

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