Download report - RepRisk

More documents

Recommendations

Info

Fashion firm, Gap Inc, has long been steeped in controversy due to allegations of social and environmental wrongdoings within its supply chain. It is not alone in this respect with many of its retail industry peers also facing ongoing criticism for similar issues. Over the last few years, RepRisk has detected numerous NGO reports, media articles and documented campaigns that target garment manufacturers for these issues and lay blame on the companies sourcing from them. In the past two years, Gap Inc came close to reaching the ‘high risk’ category according to the RepRisk Index, on several occasions. In late 2012, it eventually attained a score in this realm, indicating recurrent environmental, social and governance problems. The RepRisk database has also captured allegations made against the company by independent third parties that date back several years prior to this period. Gap has been linked to procurement controversies in several countries, many of which are considered to have poorly implemented employee health and safety standards, as well as dubious unionization policies. These include India, Bangladesh, Sri Lanka, Cambodia, Indonesia, and the Philippines among others. A 2011 report by NGO War on Want, entitled ‘Stitched Up,’ aimed to expose the alleged abuse of female workers’ rights in these Asian countries. It claimed that exploitation was ongoing despite pledges by western retailers such as Gap, Zara, Primark, and Marks & Spencer to observe a supplier code of conduct in regard to wages, working hours, and non-abusive environments. The report detailed excessive working hours with compulsory unpaid overtime to meet production targets, beatings and sexual discrimination by employers, as well as a lack of basic women’s rights including maternity leave and statutory rest days. For more information on RepRisk’s methodology please see: www.reprisk.com In the recent past, groups such as Anti-Slavery International and the Centre for Research on Multinational Corporations (SOMO) have released reports naming major retailers, including Gap, which source from textile manufacturers in India where unmarried women from lower caste families are targeted and forced to work 12 to 16 hours a day in “prison-like” conditions for less than minimum wage. According to activists, this amounts to bonded labor. In Tamil Nadu state, for example, 200 former employees claimed they were promised lump sum payments at the end of a three-year contract but did not receive this due to illness or termination of their agreements. Gap has also been haunted by past accusations. In 2011, a blog addressing sweatshop production at major retailers referred to older allegations, dating back to 2007, that children as young as eight had produced garments at a Gap supplier factory in India. Allegedly, the children were sold into this environment to help support their families, and worked 14-hour days without payment. Gap took immediate action, stating it had been unaware of the subcontracting, and removed 10,000 items made in this particular factory from sale. Back in 2010, up to 80,000 Cambodian garment workers were reported to have taken part in demonstrations for better wages and benefits in the second half of the year. Labor activists targeted Gap, among several other brands, for failure to put appropriate measures in place at their supplier factories. In the same year it was also reported that in Cambodia, striking female workers at a factory owned by PCCS, allegedly a Gap supplier, were beaten by police using tear gas and electric shock batons and forced back to work. RepRisk® is a registered trademark RepRisk AG, March 2013 2 of 4
In China, Gap was among a number of clothing retailers linked to environmental violations at supplier facilities in a report entitled ‘Cleaning up the Fashion Industry.’ According to the report, the country’s textile industry produces up to 2.5 billion tons of wastewater and other harmful pollutants every year, most of which end up in China’s water bodies, soil, and groundwater. In 2011 and 2012, NGOs highlighted serious risks associated with manufacturing in Bangladesh. The Clean Clothes Campaign reported that Gap, together with H&M, is one of the largest buyers in the country and must take responsibility for improving the poverty wages. The country apparently boasts the lowest pay in the world, the weakest regulation, and the worst attention to workplace safety. This has reportedly resulted in the death of almost 500 garment factory workers over the past 5 years. A 2010 fire killed 29 people in a Hameem Group factory supplying to major brands such as Gap. Most of the victims were women earning less than USD 2 per day. The tragedy was caused by unsafe conditions at the factory including an electric wiring overload that sparked the flame and a lack of fire escapes. Managers had allegedly locked the factory doors, meaning the workers were trapped inside. In December 2011, a boiler explosion at a Eurotex garment factory in Dhaka, which reportedly supplies to Gap, resulted in the deaths of two workers and caused severe injuries to a further 62. Several months later, NGO War on Want reported that Gap would take responsibility for the incident and offer compensation and treatment to victims and their families. While international companies have stated their willingness to establish a fire safety program and made some efforts to do so, the working environment has allegedly not improved. Most recently, Gap was linked to Tazreen Fashions’ garment factory, where a November 2012 blaze killed at least 111 workers and injured dozens more. Over the past few years, Gap has also been linked to poor conditions at facilities in Central America. In Honduras, it was accused of sourcing clothes from ‘maquilas’ – large industrial sweatshops where labor laws and worker rights are reportedly often ignored. Factory employees allegedly earn less than a living wage and are forced to do overtime to make up for the work hours lost due to a government-imposed curfew in the wake of the 2009 military coup. In El Salvador, a similar situation reportedly existed at Ocean Sky factories, with claims that Gap was one of the companies sourcing from them. In Mexico, the company was named in a Greenpeace report, published in late 2012, as one of the international retailers sourcing from a Kaltex facility, accused of discharging toxic chemicals and wastewater into water bodies. The NGO urged all companies mentioned to take action to ensure their suppliers do not pollute. In November 2012, Greenpeace released another report, ‘Toxic Threads,’ which accused 20 global brands, including Gap, M&S, Esprit and Nike, of manufacturing clothing containing toxic chemicals that polluted waterways and endangered human health, the environment and wildlife. It appears that the issues faced by Gap and its peers in terms of labor rights and environmental damage in the companies’ supply chains are ongoing and occur on a global scale. Such issues continue to plague high-profile fashion multinationals and impact negatively on their reputation. The question of how risky this is for their operations with respect to business continuity, public backlash, and government regulation, remains to be answered. RepRisk® is a registered trademark RepRisk AG, March 2013 3 of 4
Page 1: March 2013 Spotlight on: Gap Inc

Download report - RepRisk

Create successful ePaper yourself

Delete template?

Save as template?