Thursday, June 01, 2006

Accusations can be bad for business

June 01, 2006
By Sarah Butler, Retail Correspondent
The Times (UK)


CHILD labour accusations can be seriously damaging to retailers, particularly as shoppers become more ethically conscious.

Nike, the sports brand, and Gap, the American clothing company, have faced sustained consumer backlashes after claims that they have used child labour. Gap admitted last year that some of its suppliers were still using child labour. The revelation was made in the retailer’s second social responsibility report, which discloses the results of Gap factory inspections and its attempts to remedy the situation.

Nike was boycotted by American students after admitting that sub-contractors in Pakistan and Cambodia used child labour, despite company rules forbidding employment of workers under 16. Oxfam says that Nike has improved its working practices, but points out that the group continues to produce most of its goods in areas where independent unions are banned.

One of the most high-profile cases in Britain involved Marks & Spencer, which was accused of using child labour in a television programme. M&S won more than £1 million in damages and costs from Granada Television after arguing that the programme was wrong to imply that the retailer knew that its supplier, Desmonds, had employed children in Morocco. The publicity persuaded M&S and many other retailers to set up written codes of conduct for suppliers. M&S, with Boots, J Sainsbury, New Look and Debenhams, is a member of the Ethical Trading Initiative, whose code does not allow child labour.

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