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Primark hits back at 'unethical' allegations - details

Primark is conducting a full investigation into allegations that TNS Knitwear, one of its suppliers in Manchester, had exploited workers with long hours and poor pay, and said it was confident it would be ‘completely vindicated’ if the Ethical Trading Initiative launches an internal inquiry into its practices.

Reports emerged yesterday in The News of The World and The Observer that an investigation in conjunction with the BBC showed that Manchester-based TNS Knitwear, which is owned by Zahid Sawar, had paid its workers just £3 an hour for working 43 hours a week and that it had hired illegal immigrant workers.

As a result of the allegations, the Ethical Trading Initiative told Primark to remove all references to it from its stores pending an investigation.

Primark had TNS Knitwear independently audited on April 21 2008 and again on December 10 2008. At the December audit Sarwar was only present for part of the inspection.

The most recent audit also identified six major non-compliances with Primark’s policy and one minor non-compliance. These non-compliances included TNS not having the correct right to work documents. Primark had given TNS one month to rectify this problem.

TNS was also told to keep records of staff working hours - there were none available at the time of audit because they were held by the accountants. Primark told the factory it must keep working hours records on site and available for audits with immediate effect.

The audit also identified that TNS kept no record of worker holidays and that staff were unsure of what holidays they were entitled too. Primark said that TNS must address this issue by displaying notices on the wall about holiday entitlement. TNS were given one week to action this point. For the full audit report see the attached Pdf document.

Primark said in a statement: “Primark was informed this week that one of the UK factories from which it buys some knitwear has allegedly broken a number of UK employment, tax and immigration laws. Primark is conducting its own investigation into this. Once that investigation is complete it will decide how to proceed. Meanwhile, Primark has handed all relevant information passed to the company over to the relevant enforcement agencies so they may take action.”

Primark added: “In the UK we have laws relating to minimum wage levels, working hours, rights of work and health, safety and welfare at work. The authorities constantly monitor and have the ability and duty to enforce these laws. This is in contrast to the developing world, where there is a substantial reliance on the high street retailers who sell the end product to police these areas themselves.”

“Primark had TNS independently audited…and had a strict timed remediation programme in place in relation to identified breaches of its Code of Conduct…The allegations made against TNS include claims that the auditors were deliberately and dishonestly misled in relation to some aspects of these audits.”

“As a result of the allegations made, Primark has therefore begun its own investigation as to whether the specific allegations are true. Parallel to the investigation, Primark will strive to ensure that the workers employed by TNS are not the innocent victims.”

This is the second time in less than a year that Primark’s ethical credentials have been questioned by the BBC. In July, the BBC’s Panorama programme alleged some of Primark’s Indian suppliers had sub-contracted work to children. It drew 4.2 million viewers. Primark dropped three of its factories as a result of the allegations and launched a website with video content informing shoppers of its ethical policies.

However, the allegations had little effect on shopper behaviour. An exclusive survey by ICM on behalf of Drapers showed that 42% of 18- to 44- year olds were less likely to shop at the retailer following the Panorama programme and subsequent press coverage. However the recession has seen more shoppers trade down to Primark because of its low prices. Parent company Associated British Food is due to issue a trading statement on Thursday, which is likely to show that Primark was one of the retail winners this Christmas.

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