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.

Following the Primark news stories and Panorama documentary a couple of weeks ago about the undeclared outsourcing and child labour in the Indian supply chains of Primark, we thought we would write a blog about homeworking and the challenges it represents, particularly in the Indian garment industry.

As we noted before homeworking is endemic in the Indian garment industry. It is a fallacy to believe that only Primark and low-cost garment retailers are vulnerable to the problems, such as child labour, associated with homeworking. The issues homeworking presents to retailers and brands are complex. All too often companies’ responses have been to ‘cut and run’, which has left workers in a more vulnerable position than they were in before. Retailers and brands should be responding to the issue in a progressive manner; improving working conditions for adults, whilst reducing the incidence of child labour in these relationships.

Homeworking in India exists for a number of reasons.  It is linked to old craft traditions, but increasingly it is being taken up due to declining opportunities for workers in the formal sector. It also relates directly to the growth in demand for hand-made and crafted items. It is characterised by women workers, young workers and low pay. As the Panorama documentary demonstrated middlemen organise the outsourcing to the homeworkers. The system is far from transparent and homeworkers often have irregular work and no contractual relationship with middlemen. Lack of rights, combined with limited transparency over working conditions means homeworkers are especially vulnerable and the incidence of child labour is high.

However, homeworking has a number of advantages to the workers themselves and to the factories with varied production schedules. In many cases homeworking is a key part of workers livelihoods and survival strategies. For many women, homework constitutes their employment of first choice as it can be combined with domestic work. In cultures where women’s mobility is restricted homeworking is the only employment option. There is some evidence to suggest that homeworkers’ working conditions can be better than some factory workers. Homeworkers can plan when they work and how they work. For the factories, homeworkers provide a pool of skilled workers, doing jobs such as embellishments that are difficult to mechanise. Homeworkers can be relied upon when a factory needs to increase production quickly.

So what can retailers or brands do to improve terms and working conditions for homeworkers? The ETI have produced the ETI homeworker guidelines: recommendations for working with homeworkers, which is an excellent first step. It has a number of recommendations which are particularly pertinent to homeworking on the Indian subcontinent. Another great resource is the HomeWorkers Worldwide website, which has a number of interesting research reports and resources for understanding the issue.

The first step should be to map supply chains to understand where outsourcing to homeworkers is occurring and identify where an intervention by a retailer/brand could have maximum impact. The ETI guidelines suggest that many efforts to improve conditions for homeworkers have been counter-productive because there was no initial effort to get a full understanding of the complex supply chains before embarking on a remediation programme.

Once the supply chains are understood, brands should work to ensure that the homeworking relationships become visible and the working conditions for homeworkers can be monitored and improved. Some brands and retailers have had success through the establishment of community centres where homeworkers can come together to work. The best of these are run and operated by an independent NGO or homeworkers’ organisation; are located close to workers homes, and are run as a central distribution centre. They have flexible opening hours; and are used as a focal point for introducing other schemes to benefit workers, such as training and social security schemes.

Other retailers and brands have helped the support of microcredit schemes and collective social insurance. Perhaps one of the most high profile of these schemes is Benetton’s partnership with Birima micro-credit programme in Senegal. It is not clear to what extent Benetton is sourcing from the recipients of this scheme, but it shows the potential of what a retailer or brand could do.

There remains much scope for companies and their suppliers to innovate in this area, to create new ways of working with homeworkers and create better conditions for these workers.

Our main beef with the programme was its failure to give workers a voice.  The only time any worker spoke was to confirm their age. We are therefore none the wiser about how workers (adults and children) felt about their situation.  Whilst the conditions shown in the film were far from ideal, the people stitching the garments may well be dependent on their earnings from this work.  Getting their view on how Primark could improve their lot would have been useful.  It would certainly have make it harder for the Tirapur Export Association to release a statement alleging that the children captured on film were not actually working.

Hand embellishment of garments in India is almost invariably subcontracted to informal units or homeworkers, carrying the risk of child labour.  We welcome the clear view Panorama gave us down these supply chains.  The overwhelming public and consumer reaction to the film has been to urge companies to stay in and work with their suppliers and workers on these difficult issues.  Criticism of Primark has been focused on the decision to ‘cut and run‘ rather than on the discovery of problems in the first place. Maybe it’s time to move on from denial and distancing towards a more grown-up approach of engagement and improvement.

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.

This latest news only adds to the pressure on the company’s ethical standards following recent unwanted attention after the cancellation of Alexa Chung’s sweatshop experiment in Covent Garden entitled ‘The Devil Wears Primark’. The programme was cancelled by Channel 4 at very short notice at the beginning of June, leaving many viewers disappointed that a seemingly promising exposé of the garment industry was instead replaced by Without a Paddle – a film about a camping trip.

The child labour issue and the focus of the television documentary coincide with the release of a Primark video on its specially created ethics website ‘Ethical Primark’, which aims to dispel some of the assumptions about the company’s purchasing practices and how it manages to keep its prices so low. Entitled ‘How Do They Do It’ the video talks about the company’s business model – claiming that low margins, no advertising expenditure and economies of scale, rather than compromising on product quality or working conditions, help to keep prices down.

Although Primark are being targeted in this show, our research shows that poor labour standards, including poor health and safety, excessive overtime, poor wages, discrimination and even child labour are common place in many workplaces across the world.  These issues are persistent and systemic across all sectors and all countries.  The causes are complex, and include the failure of governments to enforce laws, as well as lack of good management in factories, and problems caused by the pressures which retailers and brands can put on their suppliers.

Whilst Channel 4 blame ‘editorial reasons‘, we suspect that Channel 4 is dealing with some legal challenges from Primark. Hopefully these issues will be resolved and the programme can be shown at a later date.  Whilst it’s a shame that the show has been pulled, we welcome the spotlight that Alexa Chung’s involvement has brought to the subject of labour standards and hope that this is the start of a challenging and informed debate.

Like ‘Blood Sweat and T-Shirts’ the shows concerns the working conditions of Indian workers making clothes for Britain’s low cost fashion industry. These include poor health and safety, low wages, excessive overtime, discrimination, physical abuse and even child labour.

The format is expected to be similar to the BBC3 show. The programme makers use undercover footage from factories which are allegedly producing for Primark, combined with interviews with workers and former workers. In a new twist on the ‘reality sweatshop’ theme, the programme will show host Alexa Chung’s sweatshop which was set up in London’s West End staffed by 15 volunteer members of the public.

With the increasing downward pressure on prices of clothing, Primark is an easy target for criticism. In December 2006 the War on Want report ‘Fashion Victims‘ found workers making clothes for Primark working eighty-hour weeks for 5p an hour, forced overtime and potentially deadly working conditions in Bangladesh. A 2007 update with Labour behind the Label found very little improvement. Primark is the leading low-cost fashion retailer and as such has become synonymous with the argument that low cost at the point of purchase means poor wages in the factory. There is some evidence that Primark are moving to improve this image, joining the Ethical Trading Initiative in 2006 and developing a new strategy for ethical trade.

On balance we thought that the Blood Sweat and T-shirts programme, whilst including a large dose of ‘reality TV’ drama, raised some relevant issues, and dealt with them sensitively. We eagerly await the results of Channel 4′s effort.