You are snapped out of enjoying your favorite television show to hear your child screaming. You run upstairs to see your spouse with your child’s favorite toy in one hand and a newspaper in the other. No, it was not rolled up. It was open to reveal an article listing the most recent toys that have been recalled for dangerous substances. As you try to calm your child, you skim over the list of toys. It’s a long list and you already see 2 or 3 toys that are currently in your house, and several that used to be. Now you are upset too. How does this kind of thing happen?
What you have just unpleasantly stumbled upon, was one of the unfortunate aspects of dealing with a global market. We have seen similar incidents happen frequently in recent years. The most recent case was just a few days ago. On January 8, 2010, JusticeNewsFlash.com released an article entitled “CPSC Recalls Military Toy Figures for Violating Lead Paint Standard”. The story reports that “Nearly 2,100 military toy figures were sold at Dollar Stores and other discount retail stores from November 2008 to April 2009. The surface paint on the toy figures contains excessive level of lead, which violates the federal lead paint standard.” (Nicole, 2010)
The above story is one of many stories that report consumer health and safety violations. Some recent violations that you may be famliar with are the major toy recall of toys that were maunfactured with paint that exceeds safe levels of lead. This recall was by Mattel, one of the United States leading toy makes and distributers. Many of the toys were manufactured in China.
Another on-going problem with imported products is in the building materials industry. Shortly after Hurricane Katrina, when we were experiencing a shortage in building materials, we began to inport larger quantities of frywall form China. Soon after, consumers began to complain of odors and corrosion in the drywall materials. There are concerns that the drywall odors may cause long-term health effects. “Lennar Corp. has identified 400 homes in Florida that have confirmed problems with defective Chinese drywall, and it has set aside $39.8 million to repair the homes, the Miami-based home builder said in a securities filing Friday.” (Hagerty, 2009)
So from these few examples, you can see that we face a significant problem in the United States with health and safety standards of imported products. I would like to delve a little deeper into why we have these problems and what can be down about them from an ethical standpoint. First of all, let us consider why we import from other countries to begin with. The main reason for importing products from foreign countries is cost. Just as some domestic suppliers can produce products for a lower price than other domestic supplies, foreign manufacturers can sometimes produce certain products at a much lower cost. This allows the distributer to sell more of the product for less money and pocket more net profit.
Importation can be highly profitable for anyone involved in Global Business, however, one major problem that surfaces is the wide variation of public health and safety codes. Some countries may have strict rules and allowances for materials and substances that are known to be dangerous, and some may not enforce manufacturing laws at all. Just as the old saying goes, buyers beware. It is the responsibility of the importer and the distributor of a product to ensure that those products meet the public health and safety requirements of the country or region that the product is going to be sold in.
In the United States, there are many organizations that monitor the importation of products into the US. One of these organizations is the United States Food and Drug Administration, or FDA. The FDA is primarily responsible for setting and enforcing the manufacturing standards of food and drug related products manufactured in the U.S. and imported into the U.S. There are other such organizations that are responsible for monitoring other types of domestic and foreign manufactured products.
Even when everyone plays by the rules, there can still be products that are harmful to the consumer that are discovered after the sale and distribution of the product. When this takes, responsible distributors will issue a recall of said product. In some cases, business ethics can play a key role in this process. If there was a company that was aware of dangerous imported products and imported them anyway, that would most definitely be an ethics violation.
One thing that concerns me about the United States trade policy, is that we have recently encountered dozens of products that have been imported from China that have had to be recalled at the cost of millions of dollars. Consumers that have been exposed to the products may see effects from these products for years to come. Still, it seems that little has been done to crack down on this practice. Chinese manufactures continue to produce products that to not meet our standards. Something must be done to solve this problem. You would think that it would make more business sense to send someone directly to the manufacture’s site to inspect these products before they are even shipped across the Pacific.
In order to give Chinese manufactures the benefit of the doubt, one must consider the possibility that they do not know that they are using dangerous materials in their manufacturing process. We certainly would hope that this is the case. On way that we could help reduce such incidents is to enforce import laws with stricter penalties for such violations. When we consider this same situation from our end of things, we must be cautious to ensure that we are abiding by other countries public health and safety guidelines when exporting our products. To do any less would be unethical. Furthermore, we should apply the same regulations to our exports as we do to our domestic products. It would be very unethical for us to export a product to other countries that did not even meet our own standards. If a product is not safe enough for us, it is not safe for others as well.
In order to avoid the risks and consequences when manufacturing potentially dangerous products, all manufactures should conduct thorough testing of a product before distributing it. If it is discovered internally that a product may contain a dangerous substance, it is the ethical responsibility of the manufacturer to take appropriate action accordingly.
This is one example of an ethical issue that has surfaced due to globalization of our market system. There are many benefits to a global market if everyone involved adheres to strong ethical principles and standards.
References
Hagerty, J. R. (2009, July 13). Real Estate. Retrieved January 11, 2010, from Wall Street
Journal.com: http://online.wsj.com/article/SB124744147604929199.html
Nicole. (2010, January 8). American News Distribution for Justice. Retrieved January 11, 2010,
from JusticeNewsFlash.com: http://www.justicenewsflash.com/2010/01/08/cpsc-recalls-
military-from JusticeNewsFlash.com: http://www.justicenewsflash.com
Trevino, L. K., & Katherine, A. N. (2007). Managing Business Ethics - Straight Talk About How
To Do It Right, Fourth Edition. John Wiley & Sons.
Unknown. (2010, January 12). What does the FDA do? Retrieved January 2010, from Food and
Drug Administration: http://www.fda.gov/AboutFDA/Basics/ucm194877.htm
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