Name: Kenyon Diesle A.

Bernarte
Crse & Sec: Political Science 31
Subject: Political Economy
Professor: Jumel G. Estrañero
University: De La Salle University – Dasmariñas

Multinational Corporate Greed: Labor Malpractice & Exploitation in Developing Countries

I. INTRODUCTION
In the efforts and intentions of the state-government to boost the economic growth
of a country, they welcome private or public foreign investments as a strategy to generate
employment, to contribute to the growth of export, and to expand financial resources.
Comprehensibly, many state-government in the world have relied to international
economic ties as part of their role to keep up with Economic Globalization that has been
rapidly increasing especially in today’s modern time. Specifically, Economic Globalization
refers to the integration of world countries in their goal to globalize the movement of goods
& services, to globalize the financial & capital markets, and to globalize the overall
production of world resources.

Some examples of Multinational Corporation investments include BPO (Business

Process Outsourcing) or the Call Center Companies, Production Factories of foreign brands
or products, foreign mining companies exploiting local resources and many more. These
kinds of foreign investments definitely generated a lot of jobs and improvement of
technology as Economic Globalization relies on their promise that the free market economy
that globalization brings will result for the prosperity of the world. However, together with
the promise of economic prosperity is the rise of a demon in the form of Neoliberalism or
Capitalism. This left a question mark on whether or not economic globalization did
promote the common good of the whole world.

A political approach through Neoliberalism surely favors free-market economy,

deregulation and less government role. This approach resulted into wide spread capitalism
in developing countries in Asia, South America, and Africa through cheap labor, unhealthy
labor practice, and dangerous working environment just for their goal of maximizing profit.
This is a global issue that is not addressed thoroughly because of the regional politics that
is being played out by the state-government and multinational corporations. Not only that,
the natural resources of the developing countries are being exploited by the countries in the
Global North resulting for the countries in the Global South to lose their full economic
potential. The cultural identity and prosperity of those developing countries continues to
be apprehended while the free-market capitalism that is driven by greed rapidly rises in the
21st century.

II. BODY
Multinational Corporate Elites are usually private companies that are based in
Europe and North America. It sets up its own assets and facilities such as factories in
another country usually in developing regions such as Asia, South America and Africa.

Sweatshops in Indonesia
Behind the popular swoosh is a
disgusting labor treatment of a famous
shoe and garment company called Nike
into its own workers. The working
conditions are horrifying as Nike are
paying its own workers with poverty
wages while working in an environment
that is a big risk for their safety.

The factories are constructed near the slums of Indonesia wherein they target poor
desperate workers so that they can easily abuse and exploit them. Families near the
factories are forced to share shelter with each other wherein they are exposed to dirty
sewers that are wrapped up with cockroaches and rats that are a risk for their health.
 Everyone in the family, including children
are being forced to work up to an average 12-14
hours of shift a day. Basic labor rights of the
workers are being violated as they are also being
paid low wages with no benefits, child labor,
dangerous crowded working environments, and
they are also being abused physically, verbally,
and sexually by their supervisors and managers.

Workers also have limited bathroom & food breaks and some of them are reportedly being timed
the whole time. These unpleasant labor practice do not only affect basic labor human rights but
also environmental rights as it poses big threat to the environment.

Since hundred of people are crowded into

a single room together with toxics and chemicals,
this poses a big risk of explosion and fire threats as
factory buildings do not even follow basic hazard
standard. In any cases of disasters, workers would
not be able to quickly evacuate and save
themselves.

As illustrated in the picture, workers are also being forces to burn unused materials outside
of the factories near the homes of the factory workers. These unpleasant actions pose harmful
threats to the environment as burning material such as rubber releases harmful and toxic pollutants
in the air making it hard for the families of the workers to breathe (The Problem with Fast Fashion,
n.d.).

This kind of horrible sweatshop working conditions does not only happen at Indonesia. It
also occurs in other parts of Asia such as Bangladesh, India, China and etc. This is the threat that
the capitalist companies pose into each developing countries also caused by weak regulations and
protectionism policy of state-governments.
The collapse of Rana Plaza in Bangladesh
On April 24th of 2013, the 8th floor of
Rana Plaza in the capital of Bangladesh
collapsed as a result of violation of building
codes and health-safety regulations. It was
reported that over 1,100 factory workers died
on that disaster while working on a factory
that does not have a safety certificate. It was
also reported that the gates are locked and many workers are still inside when the tragedy
happened. Statistically, Bangladesh was considered as the second most exporter of branded clothes
in the world as invested by Multinational Corporations (Daly, 2014).

Nestle Child labor in Africa

Another example of a Multinational
Corporate crime is the child slavery in Africa
as executed by a famous food company which
is Nestle. According to a study of
(Wijesinghe, 2018), The company was
accused of using children to exploit cocoa
farms in Africa while paying them at a low
wages and long hours of shift. It was also
reported that the abuse is also resulting into
the risk of the children as they are being injured mainly due to machetes that are being used in
cocoa farms. Nestle is also accused of using contaminated water in their products while knowing
the water illiteracy in Africa resulting into infant consumers of the said products experiencing
worse diseases (BBC News, 2012).

These are the examples of crimes that Multinational Corporations commit in other
countries. They also commit other forms of illegal activities such as tax evasion, pollution, human
rights violation, corruption, and other financial crimes.
 III. ANALYSIS

These aforementioned crimes that are being committed by Multinational Corporations

have detrimental effects on the economy of a nation-state. The elites from these Multinational
Corporation should be held responsible for these crimes and that the government from the
public sector should take action to address these issues. The diminishing role of the state
government should be scrutinized as their function to regulate investments from the foreign
companies is imperative in making sure that one country would gain more politically and
economically.

It can not be denied that these multinational corporations have distinct advantages to
the economy of one country as it can generate employment and boost the Foreign Direct
Investment of a country. However, these said advantages are only decoys for these
Multinational Corporations only have the intention of exploiting the economy to gain as much
profit as they can. The elites have been paying low wages to workers forcing them to work on
long hours of shift while working on a dangerous working condition. Some corporate elites
even exploit one country’s natural resources and destroy their culture, environment, and self-
identity. This have been possible because of the reduced role of the government brought upon
by globalization. Their role to set up a strong protectionism policy is diminished not only
because of capitalism but also to the fact that politics is also being played out driven by greed
and corruption letting these corporations get away with flexible policies in exchange with
money.

Creating a strong protectionism policy will help one country to make sure that they will
get political gains through strong regulations on labor laws, environmental laws, and strong
control on tariffs, quotas, and taxation. The government of once country should take part that
no single thing will be exploited and abused. Multinational corporations can definitely invest
on another country for global prosperity but they should be regulated strongly by the
government to avoid exploitation.
 IV. RECOMMENDATION

The study shows that Multinational Corporations commits many crimes especially in
developing regions in Asia, South America, and Africa. Mostly, the study showed cases
frequently related to labor malpractice in the forms of child labor, harmful working condition,
cheap labor, abuses by supervisors, and long hours of shifts. On this basis, future studies and
researches should scrutinize other Multinational Corporate crimes in the other forms of Tax
Evasion, corruption, exploitation of natural resources and other financial crimes so in that way
future readers will be educated on concrete and real cases that is happening all over the world.
It is also recommended that future researches and studies should examine on how Multinational
Corporations can be held accountable for their crimes as elites can just swiftly escape from
their actions because of power and wealth. The study can also be recommended to Philippine
government and political dynamics as a basis to raise this growing issue for further action.
Lastly, the study is highly recommended for everyone especially to students as this can raise
awareness on how corporations outside of a country can have a negative impact on its
economy.

V. CONCLUSION

Investments from other countries can help boost one country’s economy as this can
generate jobs and a source of income for government expenditures as this can be as strategy to
contribute to the growth of export and a way to expand financial resources. While the goal of
globalization is for economic global prosperity, this has not been the case as it also resulted
into the rise of capitalism. This is evident as cases of sweatshop factories are reported in many
countries especially in the Asian region. Workers are experiencing labor malpractice as they
are forced to work in a crowded room while being paid cheaply and being abused by their
employers. Weak regulations and a protectionism policy of the state-government made this
possible as wealthy and powerful businesses abused and exploited these flexible regulations
that are made in their favor. With that being said, it is timely to revolt against this inhumane
strategy of the capitalist to gain profit as much as they can. It is just right to act as the
sovereignty and basic rights of a country and its citizen must be defended against MNC’s.
 VI. REFERENCES

BBC News. (2012, June 29). Nestle 'failing' on child labour abuse, says FLA report. Retrieved
January 20, 2023, from https://www.bbc.com/news/world-africa-18644870

Daly, R. (2014, May 4). 7 Countries with Horrific Sweatshop Situation. The Richest.
TheRicheshttps://www.therichest.com/most-shocking/7-countries-with-horrific-
sweatshop-situations/t

The Problem with Fast Fashion. (n.d.). Nike Sweatshops in Indonesia. Weebly.com.
Retrieved January 20, 2023, from
https://theproblemwithfastfashion.weebly.com/case-study-nike-sweatshops-in-
indonesia.html

Wijesinghe, Prasadi, Human Rights Violations by Multinational Corporations: Nestle as the

Culprit (March 8, 2018). Available at
SSRN: https://ssrn.com/abstract=3136321 or http://dx.doi.org/10.2139/ssrn.3136321
 MESSAGE TO YOUR PROFESSOR

I am amazed up to this day on how you have handled the pressure of teaching in the
academe while working in the government and being a law student at the same time. In the span
of 5 months, I have learned a lot in your teachings and lessons and rest assured I will use this
wisdom and knowledge to make our country and the whole world a better place. Although this is
the end of the semester and the subject itself, I am looking forward to keep learning with you and
possible work with you in the future. I will always wish you nothing but the best. It was definitely
a fruitful semester. GOD BLESS AND GOD SPEED.