Tuesday 23 November 2010

How long is your supply chain?

Two news items have loomed large for us in the last couple of weeks. One concerning the lack of ethical trading standards beginning in a supply chain close to home, the other aimed at clothing manufactured in Asia.

Until 7 December 2010 you can view the episode of Channel 4's Despatches, "Fashion's Dirty Secret" on the "truth behind High Street Fashion" not at "a factory in the developing world" but in a factory in Leicester. In a further quote from the introduction "This is the dark side of cheap fashion".

The factory concerned supplied New Look, BHS, Peacocks, Jane Norman and C&A. Is it news to these companies that they need to look further down the supply chain than their immediate suppliers, that there is such a thing as sub contracting? The answer is of course no, but it certainly seems to be something they need to pay greater attention to.

It is no surprise that the offending firm Sammi Leisurewear, flouting the UK's minimum wage laws and paying cash in hand, has ceased trading.

As an example of reaction, New Look told Despatches "New Look does not permit sub-contracting within its supply base and implements clear and direct guidelines to suppliers not to deal with unauthorised sub-contractors."

That this goes on in the UK is surprising; you would expect local production to be better monitored; if clothes are being produced locally to be sold at rock bottom prices then should this not cause alarm bells to sound?

The second revelation was in this weekend's Observer newspaper and highlighted a retailer that last year was ranked by Ethical Consumer magazine as the most ethical on the UK High Street.

The Observer article writes: "Monsoon, the fashion retailer, proclaims its fair trade values, but its internal audits reveal concern at suppliers' failures to meet minimum ethical standards in India and China". In this case, amongst other ethical offences, the was the pariah of child labour - "children have been discovered working in its supply chain; women working from home may have been paid less than the legal minimum wage; some workers are regularly required to work excessive overtime; and conditions in suppliers' factories sometimes break both local laws and the industry's own ethical code".

What is good here however is that it is not an Observer investigation that was required to reveal the abuses. It was an internal ethical audit by Monsoon's own people. Again there was sub-contracting. They would not have wanted the results of the report to be leaked but at least they were conducting their own monitoring in a way that refused to turn a blind eye. Monsoon highlighted how action was taken against the offending supplier and that that have "policies to sequester" children, "put into a care home" and "repatriate them to the family".

Monsoon is a member of the Ethical Trading Inititive ("ETI"), an ethical code subscribed to by Monsoon - and indeed New Look. The ETI code of conduct, requires "the assumption of responsibility by an organisation for the labour and human rights practices within its supply chain".

The problem with fashion is that its very nature means that you can expect some churn in suppliers. But it's very possibly pressure from retailers to supply more that causes a supplier who is meant not to be sub-contracting to do just that.

At Pier 32 we are too small to have our own monitoring team. And we don't have to juggle suppliers - most of our clothing comes from Starworld whose factory facility (run by a company called Cotton Club) is closely monitored by the independent organisaton WRAP (Worldwide Responsible Accredited Production). We recently asked for and obtained a copy of WRAP's most recent audit report. We were pleased at the depth of the report and the findings that gave the factory a clean bill of health.

In the context of the rest of this article we are particularly pleased to note that the report included the statement that the factory does not get help from sub-contractors to produce their products. So we have confidence that the Starworld clothing we supply is produced within a facility that is monitored and therefore meets the ethical standards that we would like to see.

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