When Job-Killing Regulations Are Removed, Jobs Become Killers

The city of Karachi is shut down today:

Public transport was suspended and schools and colleges closed. Factories and markets also shut while attendance at offices was thin.

This city of 18 million is in mourning for the deaths of 258 people in a fire at a garment factory. The fire was horrific:

Workers were suffocated or burnt alive at the Ali Enterprises garment factory in Karachi, which made ready-to-wear clothing for Western export, when a massive fire tore through the building during the evening shift on Tuesday.

Up to 600 people were working inside at the time, in a building that officials said was in poor condition without emergency exits, forcing dozens to jump from upper storeys to escape the flames, but trapping dozens in the basement where they perished.

How can a factory be allowed to operate when it is in such poor condition that nearly half the workforce present dies when a fire breaks out? One place to look for an answer to that question is the labor minister of Sindh province, where Karachi is located:

Ameer Nawab, who has just resigned from his post as Sindh labour minister, has said that Chief Minister Syed Qaim Ali Shah had stopped him from taking action against factories violating labour rules.

This point was corroborated by Sharafat Ali of the Pakistan Institute of Labour Education and Research, an organisation that works for labour rights. He alleged on Wednesday that the CM had verbally issued directives to government officials to stop the inspections of factories in Sindh.

Noor Muhammad of the Pakistan Workers Confederation and Ayub Qureshi of the Pakistan Trade Union Federation had damning words for how regulations are enforced:

“The state and its machinery is responsible because they silently allow the violation of laws and regulations established to ensure health and safety at work,” said Muhammad.

The National Trade Union Federation held a protest outside the press club and demanded Rs700,000 for those who died in the fire and Rs300,000 for the injured.

“If inspections are allowed in jails where people serve time for their crimes then why is this right denied to labourers who strive to earn by lawful means?” asked Ayub Qureshi of the Pakistan Trade Union Federation. “Industrialists and entrepreneurs have been allowed to treat their labourers even worse than animals.”

Those in the US who rail against “job-killing regulations” should take a moment to ponder Karachi’s mourning today. The cost of allowing garment manufacturers in Pakistan to operate without inspections of their facilities was around 300 lives just this week, as another 25 lives were lost in a shoe factory fire in Lahore. Factory inspections also had been halted in Punjab province, where Lahore is located. Earlier this year, over 100 Pakistanis lost their lives due to contaminated heart medication that was produced as a result of lax regulation.

These tragedies in Pakistan should stand as a stern warning for what happens when regulations are brushed aside in favor of “industrialists and entrepreneurs”. And if you think that can’t happen here, try telling it to the four million families who lost their homes as $7 trillion in family home values was wiped out by the unregulated market for various derivatives based on mortgages that were packaged and sold in “creative” ways. If other US industries are allowed to go Galt in the way the financial industry has, days of mourning could be coming to a city near you.

The “Good Faith” Dodge: Moving From Torture to Business?

One short phrase in an article bmaz alerted me to yesterday set my blood to boiling.  I fumed about it off and on through the rest of the day and even found myself going back to thinking about it when I should have been drifting off to sleep.

The phrase?  “Good faith”

Here’s the phrase in the context of the article:

The U.S. Justice Department’s stepped up enforcement in the pharmaceutical industry has struck “the fear of God” in executives, a top lawyer at GlaxoSmithKline said today, addressing whether prosecutors have gone too far in building cases rooted in business conduct.


The panel’s moderator, Jonathan Rosen, a white-collar defense partner in the Washington office of Shook, Hardy & Bacon, described what he called a “highly aggressive” enforcement environment.

Rosen posed questions to the panel members to explore the extent to which the government is criminalizing good-faith business decisions.

So, why would the longer phrase “criminalizing good-faith business decisions” set me off so? When I read that phrase, my mind flashed back to April, 2009 and the release of the torture memos.  Here is Eric Holder, as quoted by ABC News:

“Those intelligence community officials who acted reasonably and in good faith and in reliance on Department of Justice opinions are not going to be prosecuted,” he told members of a House Appropriations Subcommittee, reaffirming the White House sentiment. “It would not be fair, in my view, to bring such prosecutions.”

But Holder left open the door to some legal action, saying that though he “will not permit the criminalization of policy differences,” he is responsible as attorney general to enforce the law.

Uh-oh.  Now it’s even worse.  See the additional parallel?  Holder decried the “criminalization of policy differences” at the same time he said he wouldn’t prosecute those who acted in “good faith” on the torture memos.  The “good faith” in the business article above was smack in the middle of “criminalizing” “business decisions”. Read more