A business professor regulates worker and consumer safety

    Prakash Sethi is an elderly business school professor and grandfather who has made it a personal crusade to battle against the "march to the bottom", i.e., the tendency to move manufacturing to the location where it is performed with the fewest protections and where labor can be procured with the fewest restrictions at the lowest cost.  As a result of a 1996 dispute with the Mattel Corporation over under-aged workers being abused in Mattel factories, Sethi created the International Center for Corporate Accountability at Baruch College in New York.  Ultimately, Mattel executives hired Sethi and the Institute to help them monitor working conditions in overseas Mattel factories. 

    Other toy manufacturers, such as Hasbro, have refused to actively monitor overseas manufacturing and instead have attempted to limit regulation to voluntary compliance with the "Sullivan Principles" which were created during the Apartheid era.  Sethi and the Institute created and perform a thorough audit of overseas manufacturing that guards against a multitude of abuses, including child labor, unsanitary living conditions, unsafe work conditions, noise, temperature, safety equipment, you name it.  They don't rely upon any form of self-reporting, as it has proven to be unreliable.  Now, there is pressure to apply the same principles to guard against defects and unsafe conditions in the product manufactured, as a result of the recent flood of Chinese-made product defects and recalls. 

     Since recalls can be expensive, are always embarassing to someone like Mattell, and rarely bring more than 10-30 percent of products back from the market, a significant production monitoring cost could be justified on economic, as well as public policy bases.  Other toy makers refuse to go along, however, instead relying on a public relations device to deflect criticism:  the adoption of the "Caring, Awareness, Responsible, Ethical" [ICTI CARE] voluntary standard of conduct.  The Co-
Chairman of " ICTI CARE" is the chairman of Hasbro, who was recently quoted blaming government bureaucracy for safety problems in China.  Sethi notes that CARE lacks the one quality that true regulation requires:  a disinterested, reliable third-party monitor.  He notes that the so-called ICTI CARE standards are simply one more example of an industry code that represents institutionalization of the "lowest common denominator" in safety, wages, health and standard of living.

     Keep these relative positions in mind if you ever have the opportunity to choose between a toy made by Mattel and one made by Hasbro.  At least Mattel is attempting to live by an American standard of decency:  at Hasbro, apparently, immediate profit is the sole issue.