Reports allege poor working conditions in shoe supply chains in Eastern Europe; company responses included

credit:  Davide del Giudice, Change Your Shoes campaign

The recently released reports by the Clean Clothes Campaign (CCC), “Labour on a Shoestring” and “Trampling Workers Rights Underfoot”, as well as the initiative “Change your Shoes” demonstrate the responsibility for respecting human rights for shoe brands and their suppliers.  

The reports found widespread denial of labour rights, including a living wage.  For example interviews with 179 shoe workers from factories in 6 countries - Albania, Bosnia-Herzegovina, Macedonia, Poland, Romania, Slovakia - found that most are not paid minimum wages.

Through the use of questions provided by the reports' authors to Business & Human Rights Resource Centre, we reached out to a total of 28 firms mentioned in the reports. The companies were asked for information regarding their efforts and work in the area of sustainability and social responsibility, precisely on sourcing policies with regard to Eastern Europe: 

1) Does your company source from Eastern Europe? If yes, from which countries and what are the shares?

2) How does your company assess the wage levels and make sure that the amount it pays is enough for a decent wage?

3) What wages does your company pay at its 5 top suppliers? Please, specify countries.

4) What wages does your company pay at factories in Eastern Europe, including Albania, Bosnia & Herzegovina, Macedonia, Poland, Romania, Slovakia?

5) How does your company make sure that the piece rate system is not leading to abuses such as unpaid overtime, hurdles to use PPEs?

6) How does the company make sure that PPE is provided? Is your company aware of the issues described in "Labour on a shoestring" report, such as hot/cold temperatures, fainting, etc.? If yes, what does the company do about it?

The companies' responses and non-responses are provided below. 

Responses from 14 companies: Adidas, Bata, Birkenstock, Clarks,  Deichmann, ECCO, Eurosko, Geox Mango, Manor, Migros, LederundSchuh, Lowa, Nilson

Non-responses from 14 companies: Ferragamo, Tods, Vögele, Ara, Bally, Gabor, El Naturalista, Prada, Navyboot, Pasito-Fricker, Rieker, Wojas, CCC, Camper

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Company response
4 October 2016

response by Geox

Author: Geox

Geox shoes are currently produced in Serbia, within our new fully owned factory (launched in January 2016)...[T]he Serbian Plant will cover around 4% of total production with the goal to reach 15 % of the total production in 2018...In the owned factory in Serbia Geox is committed to grant wages 20% higher than the minimum required by the local laws. Geox oblige each supplier to subscribe and follow our Code of Conduct which highlights the fact that the compliance to the local/ country laws as well as the commitment to foster that all suppliers pay at least the legal minimum wage is mandatory...Geox is strongly committed in guaranteeing the highest level of safety in our manufacturing processes as well as in our products. 

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Company response
15 August 2016

response by Bata

Author: Bata

...Bata Europe is producing 15% of its products from its own manufacturing facility in the Czech Republic which is constantly monitored and third party audited (SGS), Otherwise Bata Europe is sourcing 35% mainly from Italian suppliers which have also facilities or subcontractors in the Balkans or Eastern Europe. All our suppliers have signed the Bata Supplier Code of Conduct, and as such it obliges them or their subcontractors and/or agents to operate their respective businesses in compliance with the requirements of the Bata Supplier Code of Conduct. Bata Europe understands and recognizes the concept of a living wage. However, it also acknowledges and understands that there is currently no commonly recognized standard for the determination and implementation of a living wage. Bata Europe expects its suppliers to provide remuneration and benefits that comply with local laws or, in the absence of local laws, which are fair and competitive both within the footwear industry and within the local community in which the supplier operates. We will be intensifying our oversights in this area in order to be absolutely certain that facilities producing for Bata abide by such conditions.

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Report
29 July 2016

Labour on a shoe string

Author: Christa Luginbühl, Berne Declaration/Clean Clothes Campaign Switzerland

Often consumers in Western Europe believe that “Made in Europe” is a synonym for working conditions that are better than in production countries in Asia. This report shows that this is not always the case, and that problematic working conditions and very low wages in particular, are occurring endemically across global supply chains worldwide. In Europe’s lowwage countries, the clothing and shoe industry is notorious for poor pay and bad conditions. We conducted research in six European low-wage production countries. We found that global shoe supply chains include low-wage countries in Europe as well as in other world regions, and that there are strong interlinkages between, for example, European and Asian shoe production and the industries’ distinctive roles in global supply chains. We chose Albania, Bosnia-Herzegovina and the Former Yugoslav Republic of Macedonia as examples of European production countries outside the EU but with a significant share of shoe production as well as export markets in the EU.

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Company response
29 July 2016

response by Mango

Author: Mango

MANGO production in Eastern Europe is very low as explained in the Report. MANGO has recently released the Sustainability Report 2015 (available on mango.com) with complete information of supplying countries, the monitoring process of Mango Code of Conduct along the supply chain, audits results, etc. Compliance on the same is a compulsory requirement to become a MANGO supplier and therefore, it is included in the business contract and later audited by external auditing companies to assure that workers’ rights are respected in all cases.

As mentioned in the Report, none of the production factories are owned by MANGO but we work with most of our suppliers on a long term basis.

Company response
26 July 2016

response by LederundSchuh

Author: LederundSchuh

The company LederundSchuh, one of Europe’s largest shoe retailers, employs over 3,300  people in more than 321 locations in 9 countries (by 12/2015). Responsible behaviour is the forefront of our work ethic throughout all aspects of the value chain. This is our policy from the development of our collections to production and distribution as well as our products. The LederundSchuh Group does not own any production facilities; instead it has its products manufactured by hundred of partners worldwide. Our Code of Conduct commits all suppliers to comply not only with local regulations regarding labour, social and environmental laws but with international standards as well. Only a small part of our production (about 1%) is directly sourced from Eastern Europe.

Company response
22 July 2016

response by Deichmann

Author: Deichmann

...As a footwear retailer Deichmann also purchases products from European shoe manufacturers. However, Deichmann has no direct business partners in the Eastern European footwear sector.

Usually Deichmann buys products from collections of Italian and German shoe manufacturers. These shoe manufacturers mostly have their own production facilities in Eastern Europe or have local partners who produce their products (or parts of them) in Eastern Europe. Deichmann takes no influence on the selection of production sites. An exception is the sourcing in Poland. Here we source a part of the slippers directly from local producers. The share of European products of the Deichmann collection is approximately 15%. All production facilities in countries of risk are regularly monitored by independent auditors.

Production countries Eastern Europe: i.a. Albania, Bosnia & Herzegovina, Macedonia, Poland, Romania, Bulgaria... 

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Company response
20 July 2016

response by Adidas

Author: Adidas

...With respect to the general questions posed on footwear production in Eastern Europe we can share the following information:

  • The vast majority of our footwear production takes place in Asia (96%) and in South America (3%).

  • Within Europe, a small amount (less than 1%) of specialty product is made in an adidas- owned footwear manufacturing plant in Southern Germany and we have recently launched a new, highly innovative and fully automated “speed factory”, which is also located in Germany.

  • We do subcontract a small amount of upper stitching to a factory in Bosnia & Herzegovina, which is named in our Tier 2 public disclosure list (see http://www.adidas- group.com/en/sustainability/supply-chain/supply-chain-structure/).

  • The uppers manufacturer is regularly audited for social and environmental compliance, including occupational safety. We have seen no evidence of unpaid overtime or the provision of PPE being a problem at this plant. We have, however, addressed the need for improved fire safety...

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Article
20 July 2016

response by Birkenstock

Author: Birkenstock

Thank you for giving us the opportunity to comment on the findings of the “Labour on a shoestring” study...we welcome the aim of the study, which is to point out the precarious working conditions in the global footwear industry. As a company that predominately manufactures its products in its own production facilities in Germany, however, we feel that the study does not directly apply to us. The conditions mainly highlighted in eastern and southern Europe are not comparable in any way to the production realities in our own facilities. Our core products, sandals, which make up the vast majority of our overall revenue, are exclusively made in Germany. Preliminary products, such as buckles, rivets, upper material, etc., are also made in our own production facilities. This high level of in-house production depth, which is atypical of the footwear industry, allows us as a premium manufacturer to control the added value chain almost completely. Natural raw materials are purchased from long-standing partners in line with our Code of Conduct.

Birkenstock currently has around 3,000 employees, of which about 2,900 work in Germany. The approximately 100 remaining employees work in sales offices in Brazil, Spain, Hong Kong, and the USA. Our products are manufactured under optimal conditions in line with German employment legislation and EU law. Work compensation in our production facilities is also not comparable in any way to the conditions highlighted in the study. Our employees even in the lower wage brackets receive compensation that is significantly higher than the statutory minimum wage, with additional performance-related bonuses of up to 20% of their base wage. Furthermore, our employees receive additional benefits: in the last fiscal year, they received a general pay raise, plus a one-off bonus for their contributions to the business’s positive growth. All industrial employees receive 13 monthly salaries and are entitled to 30 days of leave. Older employees receive two additional days of leave from the age of 58.

Article
20 July 2016

response by Clarks

Author: Clarks

...It’s really important that we understand the working conditions of people making Clarks products and we do this by auditing and assessing our supplier factories. In 2015 the audit programme covered over 99% of our first tier footwear production, i.e. the factories that produce the finished product. We also undertake audits of second tier material and component suppliers. These audits currently cover tanneries and sole suppliers that supply approximately 80% of the volume of these materials from Clarks' nominated suppliers as well as some other component and material suppliers. Using the information gathered during these audits, we work with our suppliers to ensure that the high standards that we expect in our products are reflected in the workingconditionsinwhichtheyaremade. Withdrawingourbusinessremainsthefinalsanction.

Onlyaverysmallproportion,circa 2% of Clarks total footwear production takes place within Europe. The standards we expect of our suppliers there are the same as for all other sourcing locations...

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Article
20 July 2016

response by ECCO

Author: ECCO

...In general ECCO also provides a number of initiatives on top of paid wages, benefits and overtime compensation for our employees at our factories. Among others, ECCO provides free medical service, donates money to handicap associations, and provides student aid to support education of children from financially disadvantaged families. We also invest in training, so workers have the chance to improve their skills and make higher earnings. We need skilled employees to produce quality products, and we are willing to pay a competitive salary for the high level of skills we need. Especially for ECCO Slovakia it can be added, that the factory is having a status as preferred Employer for many years. The factory was established in 1999 and does now employ the 2nd generation of shoemakers. ECCO Slovakia is a respected and appreciated member of local business and community. Our factory in Slovakia is offering equal pay to all gender and age groups. With our intensive education programme we further develop individuals as well as teams. Furthermore, there is an intensive social program available as well as activities focusing of heath, culture and social issues. The aim is to promote an active life-style for employees and their family members...

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