There are few reasons to believe that the Disney Company was unaware of the miserable situation of the Haitian workers employed to produce its products. It first glance, it may appear that Disney might have been uninformed or misinformed about the situation, taking into account a long line of authority delegation (the Disney Company had licensing agreements with two American contractors, L.V. Myles and H.H. Cutler, which in turn were responsible for outsourcing production to four assembly factories in Haiti, namely L.V. Myles, N.S. Mart, Classic and Gilanex).
However, given the importance of business ethics and increased media attention to corporate misconduct, every large corporation oversees the ethical dimensions of its own behavior as well as of its contractors. Scandals concerning abuse of child labor or generally poor conditions of work in third world countries have the ability to make headlines for weeks. Reputation and goodwill being an invaluable resource for contemporary organizations, the Disney Company must have ignored the horrible situation of Haitian workers with regard to collecting overprofits and hoping that the case would not become known to media or general public.
Whether it was a malicious intent or inability to investigate all aspects of the outsourcing deal, the Disney Company must have paid a closer attention to the process of actual production of its clothing. Regular inspection of factories where the clothing is produced is highly advisable.
Workers in Haiti also cannot be offered the same pay as their American counterparts, since equal pay will eliminate the advantages of cross-national business. However, the Disney Company, together with all its contractors, must have looked into the Haitian job market and overall situation to advice on the acceptable salary levels for workers: as the Open Letter indicates, the salary of Haitian workers is barely sufficient for them to make a humble living, especially taking into account the fact that many of them are single providers for families with many children.
The Disney Company must have also ensured decent working conditions at its factories. Unfortunately, workers in Haiti are not entitled to the same rights as workers in developed countries. However, it is a primary responsibility of companies from the developed world to introduce appropriate labor standards in developing countries. The Open Letter has mentioned that the Haitian government’s Ministry of Social Affairs (responsible for enforcing laws regarding safety in the workplace) does not have resources to carry out its duties. The Open Letter has drawn attention to the fact that factories were hot, dusty and poorly lit, which led to eyesight and respiratory problems, headaches, and other diseases originating from inadequate working conditions. Furthermore, some employers did not provide sick leaves, did not act upon sexual harassment, and fired workers arbitrarily.
The Disney Company must have implemented Western standards in accordance with key laws as listed in the Kaplan eGuide to Ethics and the Legal Environment, such as the Civil Rights Act, Family and Medical Leave Act, and Occupational Safety and Health Act and the Occupational Safety and Health Administration.
Therefore, a careful analysis of all the stakeholders affected by a decision should be conducted before making the decision. Failure to conduct such an analysis might result in stakeholder controversies similar to this one.
The Kaplan eGuide to Ethics and the Legal Environment, Chapter 3.
Kernaghan, Ch. (1996). ‘An Open Letter to Walt Disney.’ Retrieved June 22, 2008, from http://www.nlcnet.org/campaigns/archive/haiti/DISNEY/Disapp.shtml