Despite Zara being one of best known and best selling fashion retailers in the Western hemisphere, the label has reportedly failed to protect its most vulnerable employees - the garment workers - from modern day slavery practises. According to the latest findings from Brazilian labour inspector, published by Repórter Brasil and the Centre for Research on Multinational Corporations (SOMO) Zara lacks sufficient transparency within its supply chain which has lead to a gross misconduct of labour rights.
Named 'From moral responsibility to legal liability?' the report brings to light a number of violations and issued raised by Zara and its business model. Over the past nine months labour inspectors have been investigating Zara's supply chain in Brazil and found that many of the orders end up at illegal workshops, where immigrants from Bolivia and Peru are forced to live and work under inhumane conditions. Sixty-seven suppliers were checked and found to be engaging in countless labour rights violations.
Garment workers were forced to work excessively long hours without breaks, use dangerous machinery and chemicals without adequate training and protection and were paid far less than the minimum wage. "The misconduct of Zara is very serious and demands strict punishment," commented Luiz Antonio de Mederios, Regional Superintendent of Labour and Trade in Sao Paulo to Repórter Brasil.
Zara’s business model cannot guarantee decent production
"The study has just been completed," commented inspector Renato Bignami to de Volkskrant. "We are now evaluating whether we can impose a fine against Zara again." The fine could be as high as 7.5 million euros. Zara comes forward since the report's publication and disagrees with its findings as well as the inspector's evaluation. A spokesperson from Inditex told the newspaper they felt "their report is full of inconsistencies," and the Spanish company is currently preparing take legal action against the report's publication.
This is not the first time that Zara, the leading 'fast-fashion' brand from Spanish conglomerate Inditex, has been accused of breaching labour rights. In 2011, Brazilian federal government inspectors discovered 15 immigrants working and living under "deplorable conditions" in two small workshops in São Paulo, Brazil. Workers were forced to work up to 16 hours in one day and were restricted in their freedom of movement. The inspectors stated the conditions in which the workshops were found were "analogous to slavery." Following the controversial discovery Zara Brazil was fined and Inditex vowed to improve CSR conditions by monitoring its supply chain more closely.
However, SOMO and Repórter Brasil argue that Zara Brazil, a wholly owned subsidiary through which Inditex operates through, has not been living up to the agreements made with Brazilian authorities and has exposed the fashion label's legal strategy to avoid liability for the Brazilian labour rights abuses. After the inspections of 2011, Zara Brazil agreed with Brazilian authorities to carry out more frequent and through supplier inspections. But the report shows that the fashion label is still lacking in monitoring its production chain sufficiently.
Zara accused of 'irresponsible legal strategy'
Since the inspections of 2011, Zara Brazil has filed a lawsuit against the government, seeking the annulment of the fines issued. The subsidiary of Inditex maintains that "it would never consent to any exploitation of labour in a situation analogous to slavery", but that "social responsibility must be distinguished from legal responsibility." The fashion label stresses it cannot be punished for any unlawful outsourcing carried out by its suppliers.
"The fact is that the alleged criminal offences pointed out by the inspection report refer to third-party conduct that is not to be confused with Zara’s," argues the company. The Regional Labour Court of São Paulo dismissed the lawsuit filed by Zara Brazil in April, 2014. At the time Raúl Estradera, spokesman for Inditex said: "With all due respect to the decision, we understand that our arguments were not taken into consideration and we had no chance to defend ourselves properly." Zara Brazil appealed the decision and is currently awaiting a new trial.
SOMO and Repórter Brasil argue the legal strategy is inconsistent with Zara's corporate social responsibility policy (CSR), as parent company Inditex promises to its global clients around the world that its products are manufactured under decent conditions, but in court states it cannot offer any guarantees. "I think it's true that it is impossible for Zara to control its own supply chain," commented Mariette van Huijstee, researcher at SOMO to de Volkskrant. "Which all comes down to its business model. The clothing needs land in its stores as quickly and as cheaply as possible. Which inevitably leads to Zara's contractors being obliged to outsource part of the production. Zara is not always informed of the these illegal sublets."
Zara Brazil is also fighting against being listed on the country's so-called 'dirty list' of Brazil's labour and employment ministry, a registry of companies which have been found to employ workers in inhumane conditions. The fashion label has countered this by filing for a law suit which states the list is unconstitutional and is trying to abolish the list. "Zara's attitude shows that self-regulation and binding agreements regarding corporate social responsibility are insufficient to counter human rights abuses within the garment industry," adds Van Huijstee. "Supply chain responsibility should therefore be embedded in the law."