The problem of outsourcing: what should be done?

[Drake Tungsten]

Priya.

[Ogie Oglethorpe]

Key to job retention is to make the environment more friendly for businesses both small and large.

That includes long hard looks at regulation, labor, taxation policy etc.

You want jobs you need to incent industry to stay not drive it away via onerous policies.

[Arrian]

[attempted threadjack]This isn't something the really applies to outsource IT tech support, but would something like this be possible:

If a company wishes to do business in the United States, and has operations outside the United States, those international operations must comply with EPA guidelines for the environment, as well as workplace safety guidlines, or suffer the same penalties/fines they would suffer in the US for such non-compliance. Repeated non-compliance = expulsion from the US marketplace.

Thus, a multinational corporation seeking to cut costs by setting up production in 3rd-world countries would be forced to pay attention to the environment (not that our standards are really all THAT stringent) and the safety of their employees. I left out wages, because I think it's dumb to try to force a particular wage level on a different economy.

-Arrian

[Ogie Oglethorpe]

Originally posted by Arrian
[attempted threadjack]This isn't something the really applies to outsource IT tech support, but would something like this be possible:

If a company wishes to do business in the United States, and has operations outside the United States, those international operations must comply with EPA guidelines for the environment, as well as workplace safety guidlines, or suffer the same penalties/fines they would suffer in the US for such non-compliance. Repeated non-compliance = expulsion from the US marketplace.

Thus, a multinational corporation seeking to cut costs by setting up production in 3rd-world countries would be forced to pay attention to the environment (not that our standards are really all THAT stringent) and the safety of their employees. I left out wages, because I think it's dumb to try to force a particular wage level on a different economy.

-Arrian

Many ways to get around this. Private labeling by third party companies, distributors, etc. Let alone the enforcement?

As for stingency of environmental standards, you really need to have dealt with the regs first before making broad brush judgements.

[Imran Siddiqui]

True, Ogie has a point. Enforcement would be incredibly hard.

[Arrian]

Many ways to get around this. Private labeling by third party companies, distributors, etc. Let alone the enforcement?

Yes, enforcement would be a major issue. The best way is probably to make the penalties harsh, and do unannounced inspections. That way you don't have to check up on each and every facility. You nail a few offenders, and the rest will take the hint.

As for stingency of environmental standards, you really need to have dealt with the regs first before making broad brush judgements

I do deal with them, albeit in an indirect fashion (I handle environmental claims for a major insurance company).

-Arrian

[Ogie Oglethorpe]

Originally posted by Arrian


Yes, enforcement would be a major issue. The best way is probably to make the penalties harsh, and do unannounced inspections. That way you don't have to check up on each and every facility. You nail a few offenders, and the rest will take the hint.

More government now to deal with outside companies. A function of the already too powerful EPA. ugg.

I do deal with them, albeit in an indirect fashion (I handle environmental claims for a major insurance company).

-Arrian

Then you must realize that the current regs have devolved down to nothing but legal mumbo jumbo requiring a staff of onsite reg interpreters who add what value to industry or for that matter true environmental performance (pollution reduction)?

For the most part simply added cost, doubly so to the small firms.

[Arrian]

More government now to deal with outside companies. A function of the already too powerful EPA. ugg.

Well, given that this should help the host countries of these facilities, I hope we could convince their governments to assist us in the regulation (though that raises issues of bribery of the local officials by the companies, I know).

As for the regs, well, I'm most familiar with the guildelines for cleanup of a historical pollution problem, as opposed to regs for current operations. What I know from the cleanups is that they take FOREVER, sometimes due to the government moving with all the speed of a glacier, but also because businesses will try almost anything to avoid having to pay for a cleanup. Look at what GE did with the Hudson River PCB thing. I've seen similar stuff, just on a small scale.

So while the government is certainly to blame for some of the problems, so is private industry.

-Arrian

[Ogie Oglethorpe]

Originally posted by Arrian


Well, given that this should help the host countries of these facilities, I hope we could convince their governments to assist us in the regulation (though that raises issues of bribery of the local officials by the companies, I know).

As for the regs, well, I'm most familiar with the guildelines for cleanup of a historical pollution problem, as opposed to regs for current operations. What I know from the cleanups is that they take FOREVER, sometimes due to the government moving with all the speed of a glacier, but also because businesses will try almost anything to avoid having to pay for a cleanup. Look at what GE did with the Hudson River PCB thing. I've seen similar stuff, just on a small scale.

So while the government is certainly to blame for some of the problems, so is private industry.

-Arrian

I'll not argue that.

But your example go to the heart of what I talk about. The whole regulation issue has come down to nothing but employment for lawyers. Couple that with fear of litigation and US companies have opted to move out rather than risk continued operations.

As you are aware the precedents are set that even if companies are operating in good faith and operating using good acceptable practices of today they can be held liable for operations today if and when regulations changed in the future (ex. Superfund cleanup) Why would anyone with half a brain operate manufacturing in the US knowing that.

[Arrian]

As you are aware the precedents are set that even if companies are operating in good faith and operating using good acceptable practices of today they can be held liable for operations today if and when regulations changed in the future (ex. Superfund cleanup)

Yes, this sucks in a major way.

First, the principle blows. You operate in a totally legal manner, obeying your permits, etc, and then you get slapped with a cleanup bill.

Somebody has to clean it up. Which means somebody has to pay to clean it up. The Superfund thing was born of a desire to "make the polluters pay!" It just doesn't often actually work that way. What actually happens is that a few big polluters actually get nailed (after decades-long legal and PR battles, like in the case of GE), but also a host of small businesses that didn't really do anything wrong get nailed too. And then there is the insurance angle.

Insurance policies written 40 years ago are being dug up and claims are being filed. They were written in an era that pre-dated Superfund law, and thus did not contemplate this stuff (just like Joe's widget shop didn't contemplate that sending his waste to a licensed landfill was going to bite him in the ass 20 yrs later). By the 70s, you had the beginnings of pollution exclusions. By the mid-80s, there were much better ones, and specialty lines of pollution insurance. But various state court cases have often re-written insurance policies for public policy reasons. Sometimes I see the logic to the decisions, and agree. Often, however, I wonder how in the hell they could have made such a decision. "Sudden and accidental" =! "unexpected and unintended," unless of course you're in New Jersey (and now some other states too).

Basic concept: Insurance company sold insurance the gas station. The gas station paid premium! The tanks leaked. Ergo, insurance company should pay for the cleanup. Nevermind the policy conditions/exclusions. Insurance companies are evil anyway!

So you have lawyers in the fight between companies (responsible for pollution) and the government, lawyers in the fight between the companies (over who is liable for what) and lawyers in the fight between the companies and their insurers (over whether or not it's a covered loss). And sometimes lawyers in the fight between insurance companies over who owes what.

And in the end, who pays? The public, of course. Insurance premiums rise, the cost of doing business rises... etc.

But how do we fix it? There's the rub.

-Arrian

[Ned]

I wonder how all this talk about repealing NAFTA is affecting Kerry's standing in Mexico and the Mexican-American community?