VZCZCXRO3119
RR RUEHHM RUEHJO RUEHPOD
DE RUEHLO #1703 1771728
ZNR UUUUU ZZH
R 251728Z JUN 08
FM AMEMBASSY LONDON
TO RUEHC/SECSTATE WASHDC 9026
INFO RUEHNE/AMEMBASSY NEW DELHI 0782
RUEHXI/LABOR COLLECTIVE
RUEHBL/AMCONSUL BELFAST 1077
RUEHED/AMCONSUL EDINBURGH 0947

UNCLAS LONDON 001703 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB PHUM ETRD UK IN
SUBJECT: MAJOR UK RETAILER'S CHILD LABOR PROBLEM 
 
¶1.  SUMMARY:  Retail giant Primark dropped three suppliers after a 
BBC investigation revealed they were using unauthorized home 
workers, including child labor, in India. Primark usually learns of 
abuse through either its own auditors or their independent auditor. 
If Associated British Foods, Primark's parent company, determines 
that one of its 1000 suppliers needs improvement, it tries to work 
with them through its remediation programs. UK human rights 
campaigners blasted Primark for making matters worse by summarily 
dropping the suppliers. END SUMMARY 
 
¶2.  A Panorama investigation by the BBC, which aired on June 23, 
revealed that suppliers to UK retail giant Primark were using 
unauthorized home workers, including child labor, in India. Primark, 
the UK's second largest clothing retailer, prides itself on its 
"strict code of conduct." According to Primark's website, children 
are expressly forbidden to work on clothes produced for them, none 
of their suppliers has permission to sub-contract production, and 
the sub-contracting was done without Primark's knowledge or consent. 
Upon notification from the BBC of these practices, Primark officials 
dropped three suppliers and removed all items purchased from them, 
about 0.04% of Primark's worldwide sourcing. 
 
¶3.  Although in this particular incident Primark representatives 
were notified by the BBC, Geoff Lancaster, head of the External 
Affairs division of Primark's parent company, Associated British 
Foods (ABF), told us Primark usually learns of abuse through either 
its own auditors or their independent auditor SGS. Primark reports 
on its activities to the Ethical Trading Initiative, an organization 
set up by retailers, NGOs, and trade unions to promote and improve 
the implementation of corporate codes of practice, including supply 
chain working conditions. 
 
¶4. According to Lancaster, Primark has about 1000 suppliers. It 
monitors them through its risk assessment program, which determines 
which suppliers need to enter its remediation program. The 
remediation program is designed to help suppliers that do not 
currently comply with Primark's Code of Conduct meet its guidelines. 
Primark prefers to work with suppliers to improve them, and only 
drops them as a last resort. Lancaster believes the remediation 
program is successful. Prior to this investigation, Primark had only 
sacked one of its suppliers in the past few years. 
 
¶5.  Risk assessors consider factors such as the country of origin in 
deciding where to focus their scrutiny.  To help ensure that other 
suppliers are not employing children, ABF will appoint an NGO in 
southern India. In addition, it will continue to conduct hundreds of 
audits every year, with the help of the ETI and SGS. Primark claims 
that over one-third of audits are unannounced. If remediation is 
needed, follow-up audits are conducted three months after the 
initial one. 
 
¶6.  War on Want, a London-based anti-poverty charity that focuses on 
corporations and their link to third-world poverty, condemned 
Primark for responding to Panorama's findings by terminating 
contracts with three suppliers, which it believes could cost 
hundreds of jobs. 
 
¶7.  Simon McRae, senior campaigns officer at War on Want, told the 
press: "Pressure on Indian suppliers to deliver fast fashion at rock 
bottom prices has made sweatshop labor inevitable. Again and again, 
scandals exposing UK retailers exploiting garment workers underline 
that the public cannot trust stores to police themselves. It is high 
time the British government introduced regulation to stop this 
shameful abuse." He and the BBC also contend that unreasonable 
demands placed by companies such as Primark to deliver fashionable 
items at low prices often force suppliers to accept losses on 
certain orders and hire home labor in order to retain business. 
 
¶8. ETI provided us a press release they prepared to respond to the 
Panorama and related stories. It call on companies to take remedial 
action to ensure a quick transition of children from work into 
education, to monitor further down the supply chain, including 
subcontractors, and to exhaust all options in commercial leverage in 
order to obtain improvement for workers before terminating 
contracts. 
 
TUTTLE