Why It’s Important That European Governments Are Moving To Regulate The Treatment Of Workers Globally.
By Michael Posner
Dollar General, the discount retailer, was fined $265,000 by the federal government last week for systemic hazards in violation of federal workplace health and safety standards, for example by stacking boxes that block access to aisles, emergency exits, and fire extinguishers. Since 2017, the Occupational Safety and Health Administration (OSHA) has conducted 240 inspections of Dollar General stores and fined the company more than $21 million. Last week’s fines received scant public attention because regulatory actions like this are now so routine. But this was not always so. OSHA didn’t exist until 1970, the year the Nixon Administration and Congress created the agency to ensure “safe and healthful conditions” for workers. Over the last five decades, OSHA has developed hundreds of workplace standards, which are enforced by about 1,800 inspectors.
Around the world, hundreds of millions of people work in factories, on farms, and in mining operations where life-threatening hazards are routine and government oversight is minimal. In countries in the Global South, local laws protecting workers are weak, and enforcement weaker still. Global companies make a business case for outsourcing production to these countries, mostly to reduce costs. But in this largely unregulated environment, the outsourcing of responsibility for the well-being of workers can no longer be ignored. Global companies make a business case for outsourcing production to the developing world, mostly to reduce costs. But in this largely unregulated environment, the outsourcing of responsibility for the well-being of workers can no longer be ignored.
The European Parliament, the legislative arm of the European Union, last week endorsed a directive calling for “mandatory due diligence” laws throughout Europe. These laws would regulate the human rights and environmental performance of companies throughout their values chains. This directive still needs endorsement from the EU Council, which includes representatives of EU member states, and the European Commission, which is the EU’s administrative body comprised of about 32,000 European civil servants. Most predict that this will happen within the next year. Once finally approved, the EU directive will require each of its 27 member states to adopt national legislation within two years.
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Michael Posner is the Jerome Kohlberg Professor of Ethics and Finance, Professor of Business and Society and Director of the NYU Stern Center for Business and Human Rights.