Last summer the BBC exposed how some of Primark’s fashion clothing range came from Far East sweatshops.
Now the BBC has done it again, this time showing that Primark’s continues to engage suppliers who use unsustainable employment practices.
Reaction to the news will been varied. Fashionistas may shake their heads sadly and say that the cheap, ethical fashion Primark which claims to sell simply cannot exist.
On the other hand, political deep-reds may get all agitated, saying corporations simply cannot be trusted. Both are, to some extent, correct.
Sustainable Company Flouts Minimum Wage
It’s accepted that the price of cheap goods in the West is often subsidised by exploitative and unsustainable employment practices. Improving those practices will undoubtedly lead to rising prices.
That these Primark sweatshops were in the UK not the Far East which is a great worry and the BBC investigation exposed that the supplier (TNS Knitware) was paying only two-thirds of the National Minimum Wage (£5.73 / $8 per hour).
The revelation is doubly embarrassing as 2008 saw Primark overtake George At Asda as the UK’s leading value fashion retailer. They will not like the insinuation that this success is based upon double standards.
Leading Companies Can’t Get Sustainability Assurance Right
One important fact is that Primark is not a small niche company but part of Associated British Food (ABF), a FTSE100 company. Other brands owned by the company include Ryvita, Ovaltine and Twinings, all of which are deeply embedded in the British psyche.
What’s more, Primark didn’t really do anything wrong. They used an external ethical standard (the Ethical Trading Initiative) to ensure their principles remained unsullied by commercial interests.
They also used the independent auditors The Reassurance Network who have been acknowledged as a market leader in the Corporate Responsibility Assurance, according to the first survey of its kind undertaken by Verdantix.
Is Independent Sustainability Assurance The Solution?
Bizarrely, this may be precisely where the problem lies.
Independent auditing is widely recognised as a keystone in providing good quality assurance. However Corporate Responsibility Assurance is a very new field and like all the companies involved in the sector are still finding their way in it.
For instance, and with the benefit of 20/20 hindsight, a few facts spring out from Primark’s December 2008 audit of TNS Knitwear:
- the company has only just started keeping personnel files, required to store details such as contractual agreements and disciplinary records
- the company was not keeping the correct documentation to show that an individual was permitted to work in the UK
- documentary proof of the hours staff worked was not available to the auditors and the company does not keep track of holiday entitlements
- staff could not remember there having been a fire drill despite management saying there had been one.
Many of these indicate a failure to adhere to long standing UK regulations. In some cases TNS Knitwear pleaded that they weren’t aware of those regulations, a strange defence for a company which has been operating since 1989.
To re-emphasise, I’m writing this with the benefit of 20/20 hindsight. However, from my previous experience as an IT auditor, I would have expected this kind of behaviour to make an auditor suspicious and seek to dig deeper.
It’s unclear whether this happened in this case or whether it would have led the auditor to uncover the illegal wage levels exposed by the BBC investigation.
Strengthening Independent Sustainability Assurance
How can the industry learn from such an apparent failing by a leading UK independent auditor working for one of the largest companies in the country?
Are there patterns in behaviour which ought to be watched out for? Or perhaps a set of best practice guidelines which can be applied to all standards and schemes?
Maybe an independent certification scheme is required, which will ensure all corporate responsibility auditors have reached an appropriate level of competence?
Please share your thoughts and tell us how you believe assurance can be improved and how those improvements can be best communicated on corporate websites.
We shall also be running a series of articles looking at the issues thrown up by this latest entanglement of Primark, trying to chart a way to practical solutions and their online application.
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