Monsoon improves low wages in supply chain

24 November 2010
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Audits ‘not enough to uncover ethical issues'

24 November 2010 | Angeline Albert

British clothing retailer Monsoon has said it will act to eliminate unacceptable wages discovered in its supply chain.

Internal auditors for the company found home workers in Bareilly, India, were being paid less than the minimum wage.

The retailer began auditing its entire supply chain, including subcontractors, for the first time in 2008 and discovered some of its 10,000 home-workers in Bareilly, near Delhi, were not paid a minimum wage by subcontractors to Monsoon suppliers. Monsoon’s audit reports identified 64 suppliers in India who were unable to provide evidence they were complying with wage rules, set by Monsoon, via sub-contractors.

In a statement, the clothing retailer said: “Supply chains are complex, particularly where home working is involved and it requires considerable effort to ensure that payments made to our suppliers reach the workers involved in the production of our products.”     

The company also said it has made “significant progress” in the past two years to tackle this problem. The retailer said pay rates have risen threefold and it is a year away from ensuring 100 per cent of these workers get minimum wage.

Monsoon rejected criticism in a recent Observer article (21 November), which reported child labour and minimum-wage breaches by Monsoon suppliers in India and China. The paper misunderstood the audit reports, the retailer said.

Monsoon’s statement added: “It is particularly disappointing that the newspaper reports are based on a fundamental misunderstanding of a series of audit reports which we ourselves have compiled and published. In the past five years we have encountered only two isolated incidents where child labour was being used by sub-contractors of our suppliers. In both cases we took immediate, affirmative action to protect the children.”

One of the two incidents involved a 15-year-old girl, who was found working in one of Monsoon’s subcontracted supplier factories in Shenzhen, China, in 2008.   

Monsoon has more than 270 suppliers and 500 subcontractors in India and China.

On 19 November, two days before the Observer story was published, the Ethical Trading Initiative, an alliance of companies improving workers’ lives, of which Monsoon is a member, released a statement endorsing the retailer’s efforts to recognise its responsibilities towards home-workers.

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