Zara Brasil labour rights violations found
In May 2015 a report released by SOMO and Reporter Brasil accused Zara of not having sufficient oversight of its supply chain. New findings of the Brazilian labour inspections described numerous labour rights violations in the company's supply chain. The findings follow similar results in 2011 when Brasilian inspectors found cases of "modern-day slavery" in Zara's supply chain, said the report. After that scandal, Zara promised improvements by monitoring its supply chain more closely. The new inspection and research report found that Zara was not living up to the agreements made with the Brazilian authorities at that time. In addition, the research report exposed Zara’s dodgy legal strategy to avoid liability for Brazilian labour rights abuses.
Slavery found in supply chain in 2011
According to the report, in July and August 2011 inspectors found 15 foreign workers – 9 men, 6 women – subjected to conditions analogous to slavery in two workshops in Sao Paulo. The workers were sewing clothes for Zara, a brand of Inditex, the world-renowned fast fashion pioneer from Spain. The workshops had been subcontracted by AHA, a major supplier of Zara Brasil at that time. The situation found by inspectors, followed on-site by Repórter Brasil, included working hours of up to 16 hours a day, completely illegal hiring, child labour (one of the 15 workers was 14 years old) and restricted freedom of movement, whether through illegal deductions from wages or explicit prohibition from leaving the workshop without permission. The inspectors concluded because Zara Brasil exercised directive power over the supply chain they should be seen as the real employer and should be held legally responsible for the situation of the workers.
Following the inspections Zara Brasil and the Brazilian authorities settled on a Conduct Adjustment Agreement which required the company to audits its supply chain and notify the authorities of any non-compliance.
Zara Brasil still not effectively monitoring its supply chain
Since the agreement cases have emerged which suggest that Zara is not effectively monitoring its supply chain. The report highlighted two cases whereby subcontractors listed by Zara Brasil had not paying workers. Reporter Brasil also carried out a comprehensive review of Zara Brasil's suppliers and subcontractor list in 2012 and 2013 searching for lawsuits it found cases against 16 other companies plus the two above. The lawsuits related to labour law violations such as non-payment of wages, excessive working hours, unpaid overtime, forms of harassment and unsafe working conditions.
In response to these findings Inditex stated that most were settled and it had played a role in resolving the issues. Taking into account the numerous labour rights disputes involving Zara subcontractors, SOMO and Reporter Brasil stated that it was “in July 2013, the company had only informed the authorities of the implementation of two Corrective Action Plans since 2012. Therefore SOMO and Repórter Brasil conclude there are definitely indications that Inditex’s monitoring system is not 100% effective.”
Zara Brasil's legal challenge
To make things worse, Zara is pursuing a legal strategy in Brazil that is potentially very harmful. The 2011 inspections put Zara at risk of entering the so-called 'dirty list' of Brazil's labour and employment ministry - a registry of companies caught employing workers in conditions analogous to slavery. Zara pushed back by filing a law suit claiming that the list was unconstitutional. The company may purposely invalidate a very effective legal instrument with this defence strategy. In recent years, Brazil's unique approach, combining inspections, prosecutions and making public the list of perpetrators, has rescued 45,000 people from situations that could accurately be described as modern-day slavery.
According to SOMO and Repórter Brasil, this legal strategy is inconsistent with Zara's corporate social responsibility (CSR) policy. Whereas Inditex promises customers decent conditions under which its products are manufactured, in court, the company argues that it cannot offer any guarantees.
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