Harvard Business Review: One Cost of Increased Globalization – More Industrial Accidents

Economic globalization— trade, foreign direct investment and low tariffs—has a twofold effect in making costly, environmentally harmful and deadly industrial accidents more probable, according to professors Robert G. Blanton and Dursun Peksen in a discussion of their study in Harvard Business Review. First, there is more room for error as byzantine international supply chains straddle countries with varying levels of technological capacity and workplace safety standards. More nebulously, firms may neglect their corporate social responsibility and “intentionally seek out countries with less enforcement of safety regulations or choose to move particularly dangerous industries, such as ship-breaking or toxic-waste removal, abroad.” While developing governments should enforce strict labor and safety regulations, these can be expensive in the short-term. NGOs, the International Labor Organization and consumers in developed countries can also play an increased advocacy role in preventing accidents. – YaleGlobal