Memorandum submitted by Associated British
Foods/Primark
INTRODUCTION
Associated British Foods plc (ABF) is a diversified
international food, ingredients and retail group with sales of
£8.2 billion and over 96,000 employees in 44 countries.
Primark, a subsidiary company within the Associated
British Foods group, is a major value retail group, operating
190 stores with 5.7 million sq ft of selling space in
the high streets of the UK, Ireland and Spain.
Primark sources goods from 36 countries
in three continents. We strive to maintain the highest possible
standards, and we keep our policies in relation to ethical trading
and ethical supply chain issues under constant review.
We welcome this opportunity to contribute to
the important work the Joint Committee on Human Rights is conducting,
and we look forward to giving evidence to the Committee on 30 June
2009.
WORKING WITH
THE DEVELOPING
WORLD
Our starting point is that trade with and in
developing countries is good for those countries, its people and
local economies—and that it is good for the UK economy.
Indeed, at a time of rising unemployment, ABF/Primark has created
900 jobs in the UK alone.for this financial year
Primark contributes to the employment of over
630,000 workers, and it is estimated that two million people
are supported indirectly. Indeed, between September 2007 and
September 2008 ABF/Primark invested £700 million
in developing countries and our investment programme is on-going.
ABF/PRIMARK'S
COMMITMENT TO
ETHICAL TRADING
A principle based approach:
Primark do not own the factories it sources
from and so we have in place a Code of Conduct to ensure the highest
possible standards from its suppliers. We are committed to sourcing
ethically and our code states the following within our supply
chain:
— Employment is freely chosen.
— Freedom of association and the right
to collective bargaining are respected.
— Working conditions are safe and hygienic.
— Child labour shall not be used.
— Working hours are not excessive.
— No discrimination is practised.
— Regular employment is provided.
— No harsh or inhumane treatment is allowed.
Ethical management:
Primark takes these responsibilities very seriously:
ethical trade is a permanent agenda item at Primark Board meetings;
and day-to-day management of ethical issues is driven by our UK-based
ethical trade team, working closely with our growing network of
regionally-based ethical trade managers.
Central to ensuring that our supply chain responsibilities
are being upheld and adhered to is auditing. In recent years we
have intensified the auditing process, prioritising the largest
suppliers and products and countries considered to be the biggest
risk. We are consolidating our supply base and doubling the number
of audits carried out so that in 2008 a total of 567 were
completed and in 2009 1,000 factories will be audited.
Primark also has a commitment to remediate and
train directly employed personnel, as well as suppliers. In addition
we are developing our network of third party auditors, and we
have created a new, online database to help support our internal
auditing and tracking processes.
Working with others to make a difference:
We recognise that we need to work with others
to address these challenges. For example, in Bangladesh we work
with a respected NGO, NUK, to focus on women's rights; with them
we are working with 16 of our contract factories to improve
labour standards in those facilities.
Similarly, in the Tirupur region of India we
are working with SAVE, an established NGO, who are conducting
an extensive three year survey on our behalf to identify at risk
groups in the communities of the factories who supply to us and
others in the industry.
AN INDUSTRY
WIDE CHALLENGE
The challenges and issues Primark face in terms
of sourcing as ethically as possible are shared problems across
the industry. Indeed, more than 95% of factories supplying Primark
also supply other international brands, meaning that the issues
we face are the same issues that most other retailers face too.
The need for industry wide solutions to these
challenges is widely accepted. In the UK, the Ethical Trading
Initiative exists to promote improving standards and to challenge
all parts of the industry to improve standards.
Primark attaches huge importance to its relationship
with the ETI, of which we are active members, included in various
working groups: ETI UK China Forum, Wages Working Group; Home
Workers Group in Delhi, India; UK National Home Workers Group;
Principles of Implementation Process Group, and finally we recently
joined the Purchasing Practices Working Group.
Like the ETI, and many others in the industry,
we recognise that the only way to successfully ensure that supply
chains are ethical, and that standards continue to improve, is
through collective action from all parties: retailers, suppliers,
NGOs, pressure groups and governments, who have a vital role to
play in terms of enforcement of standards in their jurisdictions.
Associated British Foods and Primark appreciates
that these are complex and sensitive issues. We take our responsibilities
very seriously. The issue of ethics in a business context is constantly
evolving, and we intend to continue to play our part in addressing
these issues. We look forward to discussing these important matters
further on 30 June 2009.
Paul Lister
Director of Legal Services and Company Secretary
Associated British Foods plc
June 2009
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