Ukraine, Serbia & Hungary: Report by Clean Clothes Campaign details poverty wages & poor working conditions in garment factories producing for global brands; incl. co responses

The report "Europe's Sweatshops" published by Clean Clothes Campaign documents poverty wages and poor working conditions in the garment and shoe industry throughout Eastern and South-Eastern Europe. The report is presented together with new country research into the situation of workers in Ukraine, Serbia and Hungary. The factories featured in the report produce for many global brands, upon whom Clean Clothes Campaign is calling to start paying a living wage and to work with suppliers to improve working conditions.

Business & Human Rights Resource Centre invited the 53 brands named as sourcing from the countries featured in the report to comment, of which 19 responded: Arcadia, Armani, Burberry, Decathlon, Gucci, H&M, Marks&Spencer, Peter Hahn, PVH, s.Oliver, Schoeffel, Tesco, Versace, Esprit, Asos, Adidas, Hugo Boss, Inditex, C&A.

The following companies did not respond to our invitation to comment: Aster Textile, Bäumler, Benetton, Calzedonia, Dolce&Gabbana, Ermenegildo Zegna, Falc, Falcotto, Falke, Fori Textile, Geox, Golden Lady Company, Kirsten, Liz Claiborne, LVMH, Mango, Mart Visser, Max Mara Fashion Group, Mexx, Naturino, Next, Oui Gruppe, Peek&Cloppenburg, Pompea, Prada, Saint James, Schiesser, Stella McCartney, Steps, Strenesse, Triumph, Vero Moda, Wagner, Walbusch. 

All responses/non-responses are available below.

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Company response
19 December 2017

Response by Burberry

Author: Burberry

...The welfare of workers is a priority for Burberry. Burberry is committed to promoting fair and sustainable employment practices throughout its business and supply chain. We believe that all employees and workers in our supply chain should be treated fairly and in accordance with our Responsible Business Principles and Ethical Trading Code of Conduct. We have a comprehensive monitoring process in place designed to ensure our standards are upheld...

One area covered by the Responsible Business Principles is the right to be paid a living wage. Burberry is committed to the promotion and adoption of a living wage in our own operations and supply chain and is proud to become the first luxury retailer and manufacturer to achieve accreditation as a UK Living Wage employer. In 2016, Burberry joined the steering group of the Global Living Wage Initiative to address in-work poverty across all sectors and multiple geographies, as part of a unified, global approach with multi stakeholder participation. 

We have one supplier in Serbia and we are working with them to ensure our standards are upheld. Burberry does not source from the Ukraine, Hungary or Georgia.

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Company response
19 December 2017

Response by C&A

...This response is referring to the allegations of human rights abuses in connection with the report ‘Made in Europe’ by Clean Clothes Campaign. The report mentions C&A as one of the fashion retailers sourcing from suppliers with production units in Ukraine. 

C&A is working hard to increase the transparency of where our products are being made... Since 2015 we have publicly disclosed our suppliers’ production units which now covers 100% of our tier-1 and tier-2 factories [...] for all markets, globally...

Our requirements are set clearly in our Global Supplier Code of Conduct, which is implemented throughout our supply chain. The code provides a uniform set of expectations for suppliers on legal compliance, labour practices and environmental performance, supported by a comprehensive set of guidelines...

C&A is aware of the situation that in some countries like Ukraine the legal minimum wages and even the average wages paid in different industries such as garment & textile may not be high enough to sufficiently cover the living cost of a worker. As a ‘living wage’ is something that cannot be achieved by retailers and brands alone, we have collaborated with others in an industry wide initiative- ACT on living wages...

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Company response
19 December 2017

Response by Decathlon

Author: Decathlon

...Our Code of Conduct is based on the fundamental principles of the Universal Declaration of Human Rights, the fundamental conventions of the International Labor Organization, and the SA 8000 standard of social responsibility. It defines our requirements regarding working conditions, in particular the prohibition of forced labor, child labor, abusive disciplinary practices and respect for working hours and fair salary...One of the main concerns of our charter is the fair compensation of the people working at our suppliers. Indeed, during the aforementioned evaluations, we make sure that the salary defined by the local authorities with all its components (minimum wage, overtime payment, social security system, paid leave ...) is well respected. We also make sure that there are transparent and fair bonus systems linked to collective and individual performance, in all the countries of production where we are present.

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Company response
19 December 2017

Response by Esprit

Author: Esprit

Esprit is aware of the Clean Clothes Campaign’s report  that mentioned one of our supplier factories in Serbia, and found the report’s allegations disturbing. When we learned of the research, we hired a non-profit third party monitor to check the findings... Some of the Clean Clothes Campaign’s allegations were inaccurate, [...] although we agree that the legal wages are very low. We did not find evidence of forced overtime, although we identified gaps in management systems that could potentially allow improper pressure to be exerted on workers.

A key problem in the factory stems from the fact that it is still relatively new... In response, we are in the process of arranging training for management in the local culture to assure more sensitive handling of relations between workers and management. Part of this training will include developing effective grievance mechanisms to assure that worker complaints are handled properly...

Regarding the low legal wages in Serbia, as one of several brands in the factory, most of which were not identified by the Clean Clothes Campaign, our ability to raise wages unilaterally is limited. Esprit is a member of ACT, a group of 17 brands that has joined IndustriALL to promote better wages for apparel workers through promotion of collective bargaining agreements in apparel producing countries.

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Company response
19 December 2017

Response by H&M

Author: H&M

...The H&M group does not own any factories. Our products are made by independent suppliers, based in many countries across the world, including several in Europe... [A]ll our 1st tier suppliers (product manufacturers and the processing factories subcontracted by them) must sign our Sustainability Commitment if they want to start or continue working with us. The Sustainability Commitment [...] expresses the fundamental expectations, or minimum requirements, our suppliers need to meet to start or continue doing business with the H&M group. These fundamental requirements include payment of legally required minimum wages, or wages agreed upon in a collective bargaining agreement, whichever is higher... 

The Sustainability Commitment is applicable to, and signed by, all H&M suppliers, in Europe as well as in other parts of the world. For a full list of our suppliers please see our public supplier list here...

If a supplier is found to be violating our minimum requirements we have a system in place that enables us to give the appropriate consequences to the supplier... Minimum requirement violations will result in business consequences and repeated violations will result in a termination of the business relationship and phase out of the factory...

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Company response
19 December 2017

Response by Hugo Boss

Author: Hugo Boss

...HUGO BOSS does have sourcing relationships with 6 vendors in Serbia and Ukraine and is hence mentioned along with a number of other well-known companies in the report. We transparently report on the number of suppliers in different countries in our supplier map, which is publicly available on our website at: http://group.hugoboss.com/en/sustainability/partners/

In its report, the CCC focuses not only on general working conditions but above all on the question of reliable and adequate remuneration for work done in the factories. The topic of minimum wages is part of the HUGO BOSS Social Standards and is regularly reviewed as part of our social program. The last observed cases of a minimum wage shortfall of HUGO BOSS suppliers in the examined countries lie more than 2 years back. In the context of the corresponding Corrective Action Plans, steps and measures have been taken - together with the suppliers concerned - and the detected shortcomings were remedied.

The gap between national minimum wages and a need-covering living wage deemed necessary for securing the livelihoods of a family that is denounced regularly by the CCC is undoubtedly there. However, an alignment in this regard cannot be solved by a company on its own... For this reason, HUGO BOSS together with peers and stakeholders has worked in various initiatives such as the Fair Labor Association and the Alliance for Sustainable Textiles...

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Company response
19 December 2017

Response by Inditex

...In 2016, only 3 factories from Serbia and 2 factory from Ukraine produced for Inditex... All five factories have been monitored and reviewed by Inditex in terms of labour standards and working conditions, including wages and working hours, with positive result in all cases...

All factories and suppliers of Inditex’s supply chain are subject to the same policies and standards – such as the Code of Conduct for Manufacturers and Suppliers and the Inditex Policy on Human Rights – and are included into Inditex’s Sustainability programmes and activities. These include not only the performance of audits to verify that the conditions of factories and suppliers comply with the requirements [...] and apply remediation whenever a breach is discovered, but also the development of different programmes aimed at ensuring workers well-being and promoting their labor and human rights...

Inditex has designed programmes in focused areas identified as priorities, with the common goal of having the “worker at the centre”. These issues include, among others, women empowerment and worker representation...

In relation with the recommendations given on the report to brands and retailers, Inditex is already working in these lines [...] throughout all its supply chain:

Pay a living wage...

Work with suppliers/subcontractors to remediate the reported rights violations...

Practice Human Rights Due Diligence...

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Article
19 December 2017

Response by Marks & Spencer

Author: Marks & Spencer

...All our suppliers, wherever they are in the world and whatever size they are, must adhere to our strict ethical standards as a condition of working with us. These include providing good working conditions, freedom of association, treating workers with respect, health & safety in the workplace, limits on overtime and paying fair rates of pay. We take all appropriate measures to implement and enforce compliance with these principles in all of our contracted suppliers and every factory is audited annually by independent global third party audit companies and are also visited regularly by Marks & Spencer’s local Compliance Managers.

Therefore, we take any allegation of the potential violation of our Global Sourcing Principles and Human Rights Policy extremely seriously. M&S currently sources [...] from a small number of clothing factories across the East and South Eastern Europe region highlighted in the report, as you can see from our publicly available supplier map and specifically from only 2 factories in Serbia and 1 in Ukraine.  We have completed an audit and verified the wage data in all of these factories and can confirm that the lowest paid worker in each of the sites is paid significantly above the legal minimum wages of these countries...

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Company response
19 December 2017

Response by Peter Hahn

Author: Peter Hahn

...We have only one direct supplier in Hungary - a long-term, renowned supplier with renowned customers. Our quality technicians visit this factory regularly. We immediately addressed this topic with our Hungarian supplier when we first read the CCC study. ln regards to wages, our supplier informed us that the minimum wage in Hungary was raised by 20% in 2017. The wages of employees at the Hungarian factory (after taxes etc. are deducted) are about 40% higher than the minimum wage...

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Company response
19 December 2017

Response by PVH

Author: PVH

...We take these matters very seriously and appreciate your sharing with us the information included in the Clean Clothes Campaign Report. We will investigate your report findings at the factories in Serbia and Ukraine, where we are actively sourcing. Since 1991, we have required all of our suppliers to adhere to our Code of Conduct, “A Shared Commitment.” We take a proactive approach to lowering risks and driving value by assessing our suppliers’ practices, addressing any violations and partnering with them to remediate and improve performance. Increasingly, we are moving beyond mere compliance by empowering our suppliers to make changes that improve workers’ lives and providing guidance and tools to support such efforts...

Previous audits of factories in the countries covered by the report did not identify any of the problems reported... [T]he issues surrounding “living” wages is complex. PVH believes working through multi-stakeholder organizations is the best way to make sustainable and positive impact. To this end, PVH has supported the Fair Labor Association’s fair compensation work and continues to monitor developments within the FLA and elsewhere...

For more information, please see pvh.com/CR, where you will find PVH’s CR report and PVH’s approach and policies relating to Human Rights.

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