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Reuters blog archive
from The Great Debate:
Can Western companies put an end to Bangladesh factory disasters?
On Wednesday, while a Bangladeshi survivor of last November’s Tazreen fire that killed 113 people was talking to a Seattle audience about the need for corporations to be held liable for safety violations, it happened again. That day, a factory housing dozens of garment manufacturers in Bangladesh collapsed outside of Dhaka. Since then the death toll has skyrocketed to more than 300 workers, with hundreds more still trapped in the rubble.
Could it be that the so-called convenience of economic globalization is collapsing, too?
Sumi Abedin survived the Tazreen fire in a Bangladeshi garment factory by jumping out a window, breaking an arm and a leg. The Tazreen factory manufactured clothes for a number of Western companies, including Wal-Mart Stores, Sears, Sean John and Disney.
Workers smelled smoke and tried to leave the building but they were told it was a false alarm and were sent back to their sewing machines. As the room filled with smoke, workers tried to escape but found doors and windows locked — apparently to prevent workers from stealing garments. Abedin said she jumped not to save her life but for another reason. “I wanted my family to be able to identify my dead body. If I had stayed there, it would have burned and they would not have been able to find me,” Abedin told a packed audience.
from Stories I’d like to see:
A working legislature, post informant life and Wal-Mart’s guns
A legislature that works:
Maybe it’s because I live in New York and have to read all the time about what may be the world’s two most dysfunctional legislative bodies – in Albany and Washington. But I wish a reporter for a national news organization would try to find the country’s best state legislature. A place where Democrats and Republicans actually work together. A place where money isn’t everything, and where everything isn’t done at the 11th hour, or later, followed by an orgy of self-congratulation.
We’ve got 50 states. They can’t all be governed by lawmakers who embarrass their constituents. Which ones function well, and why? What conflict-of-interest, campaign-spending or other rules do they have that help keep things in line? What makes them different, and how can we export their success to the rest of our capitals?
from The Great Debate:
Why Republicans should pressure Wal-Mart
Some Republicans, like Bobby Jindal, the governor of Louisiana, are arguing that the GOP needs to move away from big business and become a more populist defender of the middle class. That is good advice, and one dramatic way for Jindal or other party leaders to turn over a new leaf would be to join the pressure campaign on Wal-Mart to raise wages for its 2.2 million workers – a campaign that led to protests at Wal-Mart stores nationwide on Black Friday. The protests were coordinated by a labor-backed group of Wal-Mart Associates that wants the company to pay a minimum of $13 an hour, among other demands.
Republican criticism of Wal-Mart is not as unthinkable as it might seem. While the right heaps praise on Wal-Mart for its cheap consumer goods, the company’s low-wage business model should be problematic for conservatives for several reasons.
from Alison Frankel:
How much should corporations admit to SEC, Justice Department?
Last April, as a follow-up to revelations that Wal-Mart had allegedly covered up bribes paid by its Mexican subsidiary, the great Corporate Counsel reporter Sue Reisinger ran a very surprising piece. Despite the scandal engulfing Wal-Mart, defense lawyers told Reisinger that the company may have made a strategically smart decision not to disclose the matter to the government. Smart? Really? Would Wal-Mart's alleged bribery have blown up into a public relations fiasco that cried out for governmental consequences if the company had quietly admitted the facts to the Securities and Exchange Commission or the Justice Department?
I figured Dodd-Frank's whistle-blower provisions would make corporate self-reporting even more of a no-brainer, since insiders now have not only a moral and legal incentive but also a powerful financial motive to alert the SEC when they suspect wrongdoing. According to BuckleySandler partner Thomas Sporkin, who until last June was chief of the SEC's Office of Market Intelligence, the commission receives 1.2 whistle-blower tips a day, on average. If I were a corporate official wondering whether to self-report, I'd assume that one of those tips was about my company and run to the feds before they came to me.
from Breakingviews:
Wal-Mart’s banking twist curls through many cracks
By Daniel Indiviglio
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Wal-Mart and American Express have teamed up for a useful kind of financial innovation. The Bluebird card they unveiled on Monday targets Americans lacking access to many banking services. It may also tempt other customers with a model that’s neither credit nor typical debit. But with deposits uninsured, regulators will have to watch closely.
from India Insight:
A kirana of one’s own
India's kiranas, or small general stores, fear that the country's decision to allow Wal-Mart and other foreign companies to invest in grocery stores and other kinds of retailers will hurt their businesses.
They should go to Bangalore and talk to Nandini. She might brighten their mood.
Nandini, who lives in Bangalore's Indiranagar neighbourhood, was at Aditya Birla Group's More retail store, eyeing the detergents when I interviewed her about the new rules on foreign direct investment, or FDI.
from Alison Frankel:
Del. judges mean it: Don’t file derivative suit pre-investigation
There's an antitrust conspiracy in Delaware Chancery Court. Chancellor Leo Strine and Vice Chancellor Travis Laster are engaged in a cooperative effort to restrain the trade of shareholder lawyers who file derivative suits without obtaining books and records discovery. I've told you about Laster's decision in the Allergan case, in which he found that shareholders who rushed to sue in California didn't adequately represent the corporation (the nominal plaintiff in derivative litigation); and about Laster's follow-up explanation that "diligent plaintiffs should get to litigate," when he certified the case for appeal. On Monday, Strine echoed Laster when he refused to appoint a lead plaintiff in the derivative litigation over Wal-Mart's alleged bribes in Mexico.
"More energy was spent by dueling plaintiffs over who gets to be lead counsel and lead plaintiff than was spent writing the complaints," Strine said, according to my Reuters colleague Tom Hals. The chancellor chastised the two state pension fund giants vying to be named lead plaintiff for basing their complaints on the New York Times scoop on Wal-Mart's alleged payments rather than on their own investigations, and said everyone should come back to court after the Indiana Electrical Workers Pension Trust Fund, IBEW, and its lawyers at Grant & Eisenhofer have obtained access to Wal-Mart's books and records through the demand they have served on Wal-Mart's board.
from Breakingviews:
Wal-Mart jamboree missing one thing – a vote count
By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.Wal-Mart pulled out all the stops for its shareholder meeting on Friday. Justin Timberlake emceed at the event, which also doubled as a golden jubilee celebration. Lionel Richie had the arena-sized audience on its feet with “All Night Long” and Celine Dion closed down the party just in time for lunch. It’s a shame the mega-retailer’s organizational skills don’t extend to the basics, like providing more timely color on the controversial re-election of its board.
The 15 directors are under fire for their handling of a multi-year bribery scandal in Mexico that the New York Times brought to light in April. If the allegations prove to be true, the firm could face more serious charges as it may have violated the U.S. Foreign Corrupt Practices Act.
Yet the only information Chairman Robson Walton gave about the outcome of the vote was that a majority of shareholders had voted to re-elect everyone on the board. But that was pretty much a foregone conclusion: the Walton family controls about half of the company’s 3.4 billion shares.
from Stories I’d like to see:
Drachma redux, Hoffa’s killers, besting JPMorgan
1. Printing drachmas?
What actually will happen if Greece leaves the euro zone and goes back to its own currency? How would that work? Is there a printing press somewhere busily churning out drachmas just in case? Or did they keep the old ones in storage? How will Greeks get new drachmas? Will they exchange their euros for them? How will the exchange rates be determined? How will all the software for cash registers and credit card and e-commerce transactions be reprogrammed?
2. Searching for Jimmy Hoffa’s assassins:
We’re approaching, in two months, the 37th anniversary of the disappearance of Teamsters Union leader Jimmy Hoffa. I wrote a book about the union three years after his disappearance that pinpointed how he was murdered and who did it. Although the FBI spelled out in an internal memo and in various affidavits seeking search warrants pretty much the same scenario and suspects that I reported, the feds were never able to make a case because no one would talk and Hoffa’s body was never found. (It was probably incinerated in a mob-connected sanitation plant near Detroit.)
from Stories I’d like to see:
Homeland loses focus, ditching the filibuster, unions that own big business
1. Protecting the Homeland….in New Zealand
Is Homeland Security Secretary Janet Napolitano completely on the sidelines? And has she not gotten the memo about limiting government travel? How else to explain that on May 2 she began a trip to New Zealand and Australia? May 2 was the anniversary of Osama bin Laden’s death, when we were supposedly on high alert for possible al Qaeda attacks; and it was also when the prostitution scandal involving the Secret Service – which is part of Napolitano’s department – was raging. A Department of Homeland Security press release described the trip this way:
In Wellington [New Zealand], Secretary Napolitano will meet with Prime Minister John Key, and participate in bilateral meetings with New Zealand counterparts to discuss a variety of issues including information sharing, combating transnational crime and human trafficking.
