Zara tightens oversight of Brazilian supply chain

16 September 2011

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17 September 2011 | Adam Leach

The parent company of retailer Zara will tighten controls in its supply chain in Brazil after a sub-contractor hired by a supplier broke the company’s code of conduct.

Parent company Inditex this week announced a series of steps to strengthen the governance of its supply chain in the country after the Brazilian Ministry of Labour found illegal immigrants and a 14-year-old child working in a factory which had been sub-contracted to provide work by one of its vendors.

The new procedures will involve workers' unions and industry associations in order to increase the level of oversight within its supply chain. As a result, the Brazilian arm of the International Textile, Garment, Leather and Footwear Workers' Federation (ITGLWF) will conduct an audit of Zara’s entire supply chain in the country.

Inditex has also introduced a new supplier verification procedure that meets the criteria set by the Brazilian Textile Industry Association, which Zara has recently joined. Other measures include drafting a best practice guide in partnership with the Ethos Institute that will be offered to members of the Brazilian Textile and Dressmaking Association. The company will also launch a free phone number through which anybody can report issues and potential problems within the company’s supply chain.

Enrique Huerta, president at Zara Brazil, said: “We would like to thank all the parties involved in this process for their efforts to safeguard appropriate working conditions. The commitment of all parties and their collective responsibility is the best way to achieve this objective.”

The ITGLWF had earlier called on companies sourcing from Brazil to “wake-up” to potential problems that could occur in the supply chain.

“[Companies] should be insisting that subcontractors are used only in exceptional circumstances and after prior approval of each individual facility,” said Laura Carter, assistant to the general secretary. “They should be disclosing their entire supply chain, ensuring that sound industrial relations exist at each workplace and that workers have the right to organise and to bargain collectively.”

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