New Look has been working with Impactt on a series of projects developing innovative solutions for sustainably improving working conditions in the supply chain. The projects demonstrate that improving working conditions can result in more productive and profitable factories, as well as happier and better-rewarded workers.

We are currently working with New Look, one of its key suppliers and a factory in Delhi to understand how it could pull off this win:win of better business and better jobs.

Our initial assessment found a situation which is typical in the Delhi export garment industry – casual and contract workers working long hours, with few rest days, low pay, and very high levels of absenteeism and worker turnover.  Workers were not particularly loyal to the factory and had no real incentive to work productively or stay for the long-term.  Unsurprisingly, the team also found low levels of productivity and efficiency.

Together, the improvement team identified the need to work side by side with the factory and support it to:

• Reduce its reliance on casual workers
• Offer permanent jobs to contract workers and provide access to social security and provident fund
• Improve communication between management and workers
• Offer incentives to workers to encourage more efficiency and productivity
• Improve management’s capacity to plan production and to work efficiently and productively

This work involves two workstreams:

• Workstream One: regularising employment terms
• Workstream Two: incentivising workers to improve productivity

We are pleased to publish a more detailed case study on this productivity incentives work on our website. We hope you find it inspiring and look forward to your comments.

Primark are again on the receiving end of allegations relating to labour abuses in their supply chain, this time the factory involved is in the UK.  The Observer, BBC and News of the World this weekend alleged that illegal immigrants are being paid just over half the minimum wage in a Manchester-based garment firm supplying Primark. The supplier, TNS Knitwear, may have breached a number of key employment and immigration laws. Illegal Pakistani, Afghan and Indian migrant workers were allegedly being paid £3 an hour and working 12-hour days, seven days a week. TNS Knitwear supplies an estimated 20,000 garments to Primark every week. Undercover footage of the factory is available to view on the BBC website and Lucy Siegle in the Guardian has started a blog on the scandal. These allegations occur only six months after outsourcing and child labour was found in Primark’s Indian supply chain.

In response to the allegations, Primark have announced they are conducting an internal investigation into employment conditions at TNS Knitwear. Unusually, they have also published audits conducted in April and December 2008, along with the Corrective and Preventative Action Plan, on their ethicalprimark.com website.

In an agreement with the Ethical Trading Initiative Primark, members of the ETI, will remove all references to the ETI from its stores and its corporate website. An ETI spokesperson stated “We are horrified at the allegations of abuses exposed by this investigation… First, we have met with Primark and demanded that it provides us with a prompt, full and frank response to the allegations. Where they are substantiated, the company has a clear obligation to work with the suppliers concerned to put things right.  Second, we have immediately launched a formal inquiry to establish whether or not there is a systematic failure on Primark’s part to implement the ETI base code. If such a failure were established, this would be grounds for formal sanctions.”

Although Impactt does not have access to the specific findings of this investigation, our experience of working with garment and food suppliers in the UK has raised significant numbers of labour abuses.    In 22 UK audits carried out between August 2007 and July 2008, 33% of sites employed casual and temporary workers, who are more vulnerable to abuse , 35% of sites were working more than 60 hours per week (the limit set in the ETI base code) and 26% of sites failed to pay the minimum wage.

UK-based suppliers perform an important role filling shortfalls in orders and producing garments for the UK market at shorter lead times than firms based overseas. However, they are under tremendous pressure to deliver product at short notice and at competitive prices. This pressure can lead to workers’ wages being squeezed and factories working long hours. Impactt often finds that workers being paid poor wages are forced to work excessive hours in order to make ends meet.

UK-based suppliers are often assumed to be at low risk of breaching labour standards; the UK is a developed country with extensive employment regulations and protection for workers.  This case illustrates that this assumption may not be well-founded; poor labour standards and exploitation of workers not only occurs in China, India and the developing world they can happen in our own back yard.

• A clear set of operational principles setting out the ground rules for efficient and ethical purchasing.
• scorecards for buyers and suppliers to incentivise efficiency and better ethical behaviour

These give players in the garment industry the opportunity to create a virtuous circle, ‘better, cheaper, faster, more ethical’, delivering commercial targets, efficiencies, labour standards targets and reputational risk reduction. The report is based on interviews with retailers, sourcing offices, agents, manufacturers and workers. The research was conducted in the UK, Hong Kong, China, Bangladesh and Cambodia.Impactt and Traidcraft hope that the recommendations in this report will help sourcing directors in fashion brands to deliver the goods for business and workers.

Following the news stories last week and speculation in the Ethical Trading community, the BBC is set to show its investigation into the ethical standards of Primark’s supply chain this Monday at 9pm. A potentially controversial trailer is available on YouTube:

The footage shows outsourced finishing in the backstreet slums of India and child labour in Tamil refugee camps usually closed to outsiders. The programme uncovers organised middlemen running off-the-record order books for a factory supplying Primark and distributing finishing work amongst slum-workers.

The documentary raises important questions about low-cost fashion and how it is produced; but we wonder whether it is just low-cost fashion retailers who are vulnerable to these practices. This depiction is reminiscent of the Gap exposé last October which revealed child labour in unknown subcontracted factories. As we commented last year, if Gap could be caught in a situation like that, after developing arguably one of the most comprehensive ethical trading programmes in the industry, any company sourcing from India could be caught out. Clearly controlling supply chains is well-nigh impossible.  We at Impactt think that it is time for another approach.  The need is to identify these informal supply chains, which after all provide some income for very poor people, to develop ways to keep adults in the supply chain, but working under better conditions and to support working children back to school, whilst maintaining the family’s income.

Primark’s response to the allegations has been to drop three suppliers for using undeclared subcontractors. Primark have a point here, since the suppliers are in breach of their agreement – however, walking away is never going to solve the problem.  This type of action will leave adults without jobs and the children caught in the media glare in an even more vulnerable position.  To be fair, Primark has announced its intention to establish the ‘Primark Better Lives Foundation’, which will provide financial assistance to organisations devoted to improving the lives of young people; whether or not this will address the needs of the children found in their subcontracted factories remains to be seen.

For those who want to catch a glimpse of the programme, the BBC has posted some interesting clips on You Tube:

• Richard discusses wages and the barriers to education with a factory worker.
• Georgina discusses the conditions for migrant workers with a factory manager.

It is testament to the growing interest in ethical trade that the programme has been made at all, but it is far from the only ethical trade project in media at the moment. Alexa Chung is planning a similar experiment in her own sweat shop in Covent Garden, while the BBC has recently launched a website about ethical trade in the fashion industry. This new interest in ethical trade, and the BBC TV programme in particular, has created quite a stir in the blogosphere and have been the subject of several blogs.

New interest in ethical trade is always warmly received, and if media projects such as these can help change consumer attitudes to working conditions abroad, then companies will feel even more pressure to control standards in their supply chains.