Zara owner Inditex faces fines in Brazil over poor working conditions claim
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Version 0 of 1. Zara’s parent company, Inditex, could be fined up to 25m real (£5.29m) by the Brazilian government, which says it has failed to deal with employment abuses in its supply chain. Inditex signed an agreement with the Brazilian labour ministry in 2011 to improve conditions for workers, but the ministry found evidence that 7,000 workers had been poorly treated since 2012. Problems identified at 67 factories covered by a labour ministry report published by the São Paulo-based pressure group Repórter Brasil, included 84 accidents or cases of illness at work, 22 cases of “excessive work” – where people were working longer than 16 hours a day or not having a single day off in a week. The Spanish company, the world’s biggest clothing retailer, which owns a string of other fashion chains including Pull & Bear and Massimo Dutti, signed the deal with the Brazilian government after an investigation in 2011 unveiled sweatshop practices. In one instance, the government “rescued” 15 workers from a factory subcontracted by AHA, the company responsible for 90% of Zara’s Brazilian production. Fourteen of the workers were Bolivians with one from Peru. One worker was aged 14. In the wake of the scandal, Inditex promised it would thoroughly check on conditions for workers and cooperate with suppliers to improve matters. The ministry’s latest report claims that instead of improving conditions in factories which had been checked and found wanting, Inditex cut off relations. It claimed that, as a result 31 companies were forced to close. Felix Poza, director of corporate social responsibility for Inditex, said that the company had appealed against the labour inspection report. He said the report “lacked credible grounds” to suggest Inditex had broken its agreement in Brazil. The company said the vast majority of the incidents flagged by the government were minor infringements, such as seating issues, and it had already worked to improve conditions in its supply chain. Meanwhile, it said the government report contained inaccuracies. The Spanish retailer, which is signed up to a global deal to protect supply chain workers with the union IndustriALL, has carried out more than 2,800 audits of its Brazilian manufacturers since 2012, a significant increase on previous years. Inditex’s clothing only made up 15% of the production of the factories covered by the labour ministry’s report. Five of the factories mentioned have never been Inditex suppliers while others have since been excluded from its supply chain. The company said the Brazilian government should have alerted Inditex to any problems at an earlier stage so that they could be dealt with. “Under Inditex’s 2011 agreement with the labour inspection department in Brazil the authorities are obliged to communicate issues, and provide Inditex with 10 days to resolve them. Inditex has been solving any issues as soon as it finds them,” the company said. However, the centre for research on multinational corporations, the Dutch campaign group, said Inditex’s demand for low prices and tight delivery deadlines, inevitably led to an “obscure supply chain” in which human rights abuses could occur. “To meet tight deadlines and to be able to complete unanticipated orders, manufacturers may subcontract certain production processes or even shift complete orders to other factories and workplaces, often without informing the buyer,” it said in a report on Inditex. The campaign group said the Brazilian government’s effort to hold companies to account for human rights violations in their production chain was therefore important. “Supply chain liability is nothing more than a legal basis to hold companies to account for what fashion companies like Zara say they are already doing: make sure that they are not complicit in human rights violations.” |