MAJOR UK RETAILER'S CHILD LABOR PROBLEM

UNCLAS LONDON 001703

SIPDIS

E.O. 12958: N/A
TAGS: ELAB PHUM ETRD UK IN
SUBJECT: MAJOR UK RETAILER'S CHILD LABOR PROBLEM


1. SUMMARY: Retail giant Primark dropped three suppliers after a
BBC investigation revealed they were using unauthorized home
workers, including child labor, in India. Primark usually learns of
abuse through either its own auditors or their independent auditor.
If Associated British Foods, Primark's parent company, determines
that one of its 1000 suppliers needs improvement, it tries to work
with them through its remediation programs. UK human rights
campaigners blasted Primark for making matters worse by summarily
dropping the suppliers. END SUMMARY


2. A Panorama investigation by the BBC, which aired on June 23,
revealed that suppliers to UK retail giant Primark were using
unauthorized home workers, including child labor, in India. Primark,
the UK's second largest clothing retailer, prides itself on its
"strict code of conduct." According to Primark's website, children
are expressly forbidden to work on clothes produced for them, none
of their suppliers has permission to sub-contract production, and
the sub-contracting was done without Primark's knowledge or consent.
Upon notification from the BBC of these practices, Primark officials
dropped three suppliers and removed all items purchased from them,
about 0.04% of Primark's worldwide sourcing.


3. Although in this particular incident Primark representatives
were notified by the BBC, Geoff Lancaster, head of the External
Affairs division of Primark's parent company, Associated British
Foods (ABF),told us Primark usually learns of abuse through either
its own auditors or their independent auditor SGS. Primark reports
on its activities to the Ethical Trading Initiative, an organization
set up by retailers, NGOs, and trade unions to promote and improve
the implementation of corporate codes of practice, including supply
chain working conditions.


4. According to Lancaster, Primark has about 1000 suppliers. It
monitors them through its risk assessment program, which determines
which suppliers need to enter its remediation program. The
remediation program is designed to help suppliers that do not
currently comply with Primark's Code of Conduct meet its guidelines.
Primark prefers to work with suppliers to improve them, and only
drops them as a last resort. Lancaster believes the remediation
program is successful. Prior to this investigation, Primark had only
sacked one of its suppliers in the past few years.


5. Risk assessors consider factors such as the country of origin in
deciding where to focus their scrutiny. To help ensure that other
suppliers are not employing children, ABF will appoint an NGO in
southern India. In addition, it will continue to conduct hundreds of
audits every year, with the help of the ETI and SGS. Primark claims
that over one-third of audits are unannounced. If remediation is
needed, follow-up audits are conducted three months after the
initial one.


6. War on Want, a London-based anti-poverty charity that focuses on
corporations and their link to third-world poverty, condemned
Primark for responding to Panorama's findings by terminating
contracts with three suppliers, which it believes could cost
hundreds of jobs.


7. Simon McRae, senior campaigns officer at War on Want, told the
press: "Pressure on Indian suppliers to deliver fast fashion at rock
bottom prices has made sweatshop labor inevitable. Again and again,
scandals exposing UK retailers exploiting garment workers underline
that the public cannot trust stores to police themselves. It is high
time the British government introduced regulation to stop this
shameful abuse." He and the BBC also contend that unreasonable
demands placed by companies such as Primark to deliver fashionable
items at low prices often force suppliers to accept losses on
certain orders and hire home labor in order to retain business.


8. ETI provided us a press release they prepared to respond to the
Panorama and related stories. It call on companies to take remedial
action to ensure a quick transition of children from work into
education, to monitor further down the supply chain, including
subcontractors, and to exhaust all options in commercial leverage in
order to obtain improvement for workers before terminating
contracts.

TUTTLE