Lately in the news, there is a lot of reporting on Apple's suppliers ( http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?hp ). The implicit accusation is that some American device makers who use Chinese factories look the other way as the factories treat workers very badly. The question I have is: what is the proper role of a company when it is using subcontractors? Should it be profit-only or should a company have any "concern" for the workers who work in a subcontractor's factories? After all most of the people working in Chinese factories assembling Apple devices are working voluntarily (the conditions in the factories are presumably much better than rural village life in China). Why do people feel that we should hold Chinese factories to a standard that the West achieved after many decades of progress? The supporters of "workers rights" point to cleaner, nicer factories making sneakers as an example of how to do "the right thing" ? I must admit I am a bit confused on this topic. What do you think ? It strikes me that Western do-gooders may actually be doing more harm than good by interfering in the normal progress of a country as it moves from rural, stoop labor to assembly lines to knowledge work.
Should they care at all? Yes, if it affects their rational self interest. A rational company will take into account all the facts that might affect their interests (including treatment of workers). I can think of numerous ways in which the treatment of suppliers' workers could affect the rational interest of a company---for example, the quality of parts will be lower to the extent the employees are mistreated, the stability of the supply will be lower to the extent that workers are upset (e.g., more strikes, etc.), etc.
However, the extent to which all companies should care (i.e., how much effort they should put into investigating it) cannot be determined as a general matter. Each company is going to care to a different degree, based on the unique facts of their situations (e.g., how many different suppliers do they have, how vital is the part the supplier is making, etc.). It may not be in the company's interest to spend lots of time and money looking into how their suppliers' workers are treated. The proper balance will have to be determined by them like any other business decision.
Furthermore, the fact that it may be in a company's interest to monitor the treatment of foreign workers does not mean that the company has some sort of legal or moral obligation to look after them.
The fact that China (and other 3rd world countries) are not free complicates matters. There might be a moral issue in helping to prop up rights violating states by taking your manufacturing business there---it may not be in your long term interest to do so. However, I do not think it is a clear-cut matter of refusing to do business with China either. They have a mixture of freedom and compulsion in their system (just like us), and it is not a simple matter to determine whether your business with them is helping prop up the good or the bad aspects of their system.
However, I do think that you can say that if a company knows or should know that a supplier is using slave labor (i.e., the workers are forced to work there), it is immoral for them to use that supplier. It cannot be in one's long term rational interest to prop up slavery, even if it is occurring on the other side of the world from where you live. But be careful not to fall into the trap set by those on the left of claiming that paying low wages or asking for long hours or the like is the same as slavery---it is not.