Tuesday 11 March 2008

Ethical Brand Profile - Hanes

Hanes is a line of promotional clothing produced by HanesBrands, a clothing company headquartered in North Carolina USA which employs 50,000 people internationally.
Hanesbrands owns several other well known brands including Champion (its second largest brand) and Playtex.

So as clothing companies go, Hanes is one of the biggest. How does it stack up on ethics and the environment? Let's take a look at the "Our Values" section of the Hanes website.

Hanesbrands' Vision is "to be a world-class consumer goods company with a distinctive competence in operating a low-cost global supply chain." The last bit here is potentially a bit worrying, if the vision driver is low cost then where does this take you?

Looking further, Hanesbrands' Core Values include "integrity/Ethical Standards" which is more encouraging. They have a Global Business Practices, an employee code of conduct that has been their guiding practice since the 1990s and a set of Global Standards for Suppliers, a supplier code of conduct, has been in place for a similar period, "years longer than similar codes".

Right at the top of the employee code of conduct is the message from the Executive Chairman "These Global Business Standards were developed to provide you with information and resources to make informed business decisions and act on them with integrity. These standards are also a declaration to our customers, business partners and stockholders that we are committed to conducting business as we always have – by doing the right thing. In your career, you may be faced with a situation that does not appear to support our business values or you’re not sure if it is the right course of action." It then goes onto list contact points where to go for advice, outside the individual's direct chain of command.

An interesting statement aimed at empowering the individual employee. I like it although it's difficult to tell how this sort of thing works in practice.

Moving away from employees, how does the
"low-cost global supply chain" work?

In the recent article on B&C we highlighted operations in Bangladesh. The National Labor Committee in the US have been to Bangladesh and their report here from 2006 was not good reading for Hanes. The reaction of Hanes and Wal-Mart (also cited) was to terminate supplies. On the face of it, good, but then some (United Students Against Sweatshops)
say "instead of staying to correct the situation, Hanes abandoned the factory, leaving workers without jobs".

You may think damned if you do take supplies from developing countries, damned if you don't. And with the wide range of interests of people willing to criticise, you are of course right.

That article actually focuses on Hanes' operations in the Dominican Republic - "abusive and unsafe working conditions" - something that is confronted head on and prominently on the Hanesbrands website (a link on the main Values page) and by an independent report.

Hanes have not abandoned their operations but recognised 'managerial issues' and 'overtime pay practices' and other issues that needed addressing and it is to be welcomes that they appear to have addressed them, including the retrospective payment of overtime.

What's the big difference between the Dominican Republic and Bangladesh? In the former the workers are employed by Hanes, in the latter by the sub-contractor.

Ethical Corporation
writes "while brand pullouts from specific factories such as those by Wal-Mart and Hanesbrands may jolt Bangladeshi employers into putting their houses in order, they still are not seen as the most effective way of dealing with a sticky situation, especially when the decision could leave many impoverished".

I am not sure. Closure may seem harsh and simply an easy way to appease some critics, but we do not know what messages were coming from the current owners; in the long run if a consistent approach is taken those in Bangladesh or other places who profit from unethical labour practices will have to changes their ways.

But some engagement with (including where appropriate inspection of) suppliers is important.

That thought takes me back to Hanesbrands' Global Standards for Suppliers, an interesting read. Asides from what you would expect to see in terms of ethical business practices there is some quite refreshing content (such as "Gifts, favors and entertainment are not needed in order
to conduct business with Hanesbrands,") and an ethical "Mirror Test".

The Global Standards say....

"Failure to observe and abide by these Global Standards for Suppliers may result in Hanesbrands ceasing to do business with such supplier. As evidence of their concurrence, suppliers will enter into a written commitment to comply with these Standards and sign the attached Acknowledgement Card."

The document includes a tear off reply slip to certify "I hereby acknowledge receipt of Hanesbrands’ Global Standards for Suppliers, and certify that our company is, and will continue to be, in compliance with the provisions of the Global Standards for Suppliers."

I assume the Bangladeshi factory owners had looked in the mirror, admired their well cut suits, and then returned the reply slip! Hanesbrands' written standards point to their heart being in the right place but perhaps they need to be a bit more proactive in getting out there into the field and seeing first hand what is going on.

There is only limited time for each of these brand profile summaries - I welcome any further feedback on this or others.

1 comment:

  1. In response to the excerpt, "Hanesbrands' written standards point to their heart being in the right place but perhaps they need to be a bit more proactive in getting out there into the field and seeing first hand what is going on."

    I can assure you that Hanesbrands written standards are an indication that they have a PR team that realizes the importance of having ethical LOOKING policies ON PAPER. What consumers are actually going to spend time in the factories to verify this?

    Most consumers will just look at the website and think that they are involved with the factory management since they have this great code of conduct written out.

    Hanesbrands' Code of Conduct that makes such an impression on those who visit their website is something that does not become anything more than ink on paper. The reason is complex.

    The truth is that the code of conduct is posted at the factory. (Note, most factories around the world produce for a number of different buyers at the same time, and there is usually a board on the factory floor littered with the numerous codes of conduct with the specific regulations each buyer requires.) The factory workers may or may not be able to read it. The management of the factory squeeze as much as they can out of their workers (24 hour shifts, no bathroom breaks, unpaid overtime, abusive managers standing over workers in a threatening manner), and they have no incentive to actually follow the code of conduct.
    The buyer, in this case Hanesbrands, does not pay the factory enough money for the product to obey the code. So much labor is squeezed out of the workers for so little compensation. It costs more money to follow a code of conduct that limits work week hours, enforces breaks, pays for overtime, etc. Brands negotiate over pennies with the factories to get the lowest price per garment possible, that they will not pay the necessary amount of money needed to produce garments following an ethical code of conduct.

    So, I urge you to reach beyond what's written on paper and consider media reports and worker's testimonies with more credibility.

    Full disclosure: I researched garment factories producing for Nike, Hanes, Adidas, and other smaller brands in Guatemala. It became clear that brands do not support the workers of the factories.