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ABOUT THE BRAND
Zara is a clothing and accessories retailer selling fashion products for men, women and children. It is the main brand under parent company Inditex out of Spain, purportedly one of the largest fashion retailers in the world. The brand closely follows international fashion trends and its business model means it can turn around new designs in a matter of weeks, giving the shopper access to the latest trends almost instantly. Anyone say fast?
Zara is owned by Inditex, which also owns Bershka, Massimo Dutti, Pull & Bear, Stradivarius, Oysho, Zara Home and Uterque. The information provided here is largely about the parent company, Inditex, with specific information about Zara when available.
💪🏼 According to the brands Code of Conduct, regardless of whether wages paid by manufacturers and suppliers meet the minimum legal or collective bargaining agreement, wages should always be enough to meet at least the basic needs of workers and their families and any other which might be considered as reasonable additional needs.
🔍 In 2016, advances were made in raw material traceability, with new initiatives specifically aimed at the traceability of cotton. A pilot programme launched involving 50 of the brands strategic suppliers in five countries with the aim of gaining visibility and more knowledge about the production processes involved, from cotton growing to fabric manufacture.
💡In 2016, Inditex and the Austrian Company Lenzing jointly developed a new material made from cotton waste and wood from sustainably managed forests called Refibra Lyocell.
🏢 In 2015, The Guardian reported that black customers at Spanish fashion retailer Zara’s New York stores had been disproportionately identified as potential thieves, a significant proportion of employees surveyed by the Center for Popular Democracy have claimed in a new report. “Zara USA vehemently refutes the findings of the Center for Popular Democracy report, which was published without any attempt to contact the company,” a spokesperson for Zara said in a statement to the Guardian.
💪🏼 The 2017 Australian Fashion Report found that the brand does not publicly share aggregated wage data and only 1 – 25% of Inditex’s traced facilities pay a living wage.
♻️ In June 2017, Sourcing Journal reported that a recent report by Changing Markets Foundation, stated that a number of U.S. and European brands, including Inditex, were buying viscose fiber from factories creating high levels of pollution. The report explained that a number of factories across Asia were responsible for dumbing highly toxic wastewater into waterways, and that the pollution from viscose fiber not only has environmental implications but it also exposes local populations and especially workers to harmful chemicals
/ In 2016, Inditex states it used 1,805 suppliers that produced over 20,000 units/year. These suppliers declared 6,959 factories through the Inditex Manufacturer Management System. It is unclear how many factories, if any, were not declared by suppliers.
/ In October 2012, Forbes reported that Inditex had 14 semi automated factories of its own in Spain.
/ Inditex shares a list of the number of factories and suppliers located in each country in its 2016 Annual Report. It has 65 suppliers and 133 factories in America, 482 suppliers and 2,288 factories in the European Union, 179 suppliers and 1,451 factories in non-European Union Europe, 141 suppliers and 353 factories in Africa and 938 suppliers and 2,734 factories in Asia.
/ The 6,959 factories declared by the brands suppliers is made up of:
- 932 fabric factories
- 306 cutting factories
- 4,296 sewing factories
- 573 dyeing and washing factories
- 216 printing factories
- 636 finishing factories
/ It is unclear if Inditex can trace its entire supply chain.
/ As of May 2016, Inditex has disclosed a list of names and addresses of its direct and indirect suppliers of wet processing (dyeing, washing, tanning and printing).
/ In 2016, Inditex stated that its supplier clusters cover 95% of its total global production but the brand does not share the traceability of its tier 3 suppliers (raw materials).
/ Inditex states that it regularly shares the complete list of its supply chain at all levels and processes with IndustriALL, including purchasing volumes and sustainability compliance levels.This information does not appear to be publicly available.
/ In 2016, advances were made in raw material traceability, with new initiatives specifically aimed at the traceability of cotton. A pilot programme launched involving 50 of the brands strategic suppliers in five countries with the aim of gaining visibility and more knowledge about the production processes involved, from cotton growing to fabric manufacture. However, we could not find any publicly shared information containing the details of this programme.
/ Inditex states that only those meeting the requirements established by its Code of Conduct can enter their supply chain, and the brand prohibits any interference with workers rights to freedom of association, union membership and collective bargaining.
/ In May 2015, Reporter Brasil and SOMO released a report with the opinion that Inditex’s supply chain monitoring is not 100% effective. The organisations also state that Inditex is not fulfilling all of its obligations as laid down in an agreement with the Labour Prosecutor’s Office following a 2011 incident that saw sweatshop conditions discovered in its supply chain: according to The Guardian the government “rescued” 15 workers from a factory subcontracted by AHA, the company responsible for 90% of Zara’s Brazilian production. Fourteen of the workers were Bolivians with one from Peru. One worker was aged 14.
/ According to the brands Code of Conduct, regardless of whether wages paid by manufacturers and suppliers meet the minimum legal or collective bargaining agreement, wages should always be enough to meet at least the basic needs of workers and their families and any other which might be considered as reasonable additional needs.
/ The 2017 Australian Fashion Report found that the brand does not publicly share aggregated wage data and only 1 – 25% of Inditex’s traced facilities pay a living wage.
/ In 2016, in relation to decent wages, Inditex states that 800 workers were trained on this issue and the brand found a rate of 75% compliance with the Code of Conduct in wage issues and 95% compliance with A or B suppliers
/ In 2016, Inditex undertook 10,883 audits, made up of 2,302 pre-assessment audits, 4,011 social audits, 1,794 special audits, 2,776 traceability audits, 7,245 external audits and 2,799 internal audits.
/ Inditex provides training for both internal and external auditors, in Inditex’s own methodology and in best auditing practices. Inditex’s internal auditor team are accredited by Social Accountability International (SAI) as auditors able to verify compliance with the SA8000 standard.
/ In 2016, numerous breaches of the Code of Conduct by suppliers were detected. Of the suppliers, 38% complied with the Code of Conduct, 51% breached a nonmaterial aspect of the Code of Conduct, 5% of suppliers breached a material aspect of the Code of Conduct, whilst 3% were subject to Corrective Action Plans (CAP).
/ The 2016 Greenpeace Detox Catwalk categorized Inditex as Avant-Garde. Greenpeace reports that brands that fall under this category are Detox committed companies that are ahead of the field, leading the industry towards a toxic-free future with credible timelines, concrete actions and on-the-ground implementation.
/ Inditex has an Environmental Code of Conduct for Manufacturers and Suppliers. This code covers water and wastewater discharge management, energy management and emissions to the atmosphere, chemicals, and waste.
/ In 2016, Inditex used 5,000 tonnes of organic cotton in its product that included 36.7 million garments with 100% organic cotton, as a result, Inditex has become the world’s fourth biggest consumer of organic cotton.
/ Inditex has developed a product health standard called Clean to Wear. The standard regulates substances whose use is legally limited, sets limits on two substances that are not covered by legislation, and includes REACH standards.
/ In 2016, Inditex collected 7,102 tonnes of garments, shoes and complements collected in its stores and offices. The items collected are donated to nonprofits, including Caritas, Red Cross, Oxfam and CEPF, and sorted for repair, resale or recycling; in the case of Caritas this provides jobs for people at risk of social exclusion. The funds raised in the sale of items are kept by the nonprofits.
/ Inditex applies the principles of its animal welfare policy to all items supplied to the Group including raw materials of animal origin. Consequently, practices such as sheep mulesing are not accepted in Inditex’ supply chain.
/ Inditex has begun to implement their Strategic Plan for a stable and sustainable supply chain 2014-2018. With its Strategic Plan, Inditex reiterates its commitment to the Guiding Principles on Business and Human Rights developed by the United Nations “Protect, Respect and Remedy” Framework, better known as the Ruggie Framework. With a view to applying these principles, Inditex states that it has developed policies and procedures aimed at defending and promoting human rights both in its operations and those of its stakeholders.
/ Inditex has a number of strategic environmental goals to be reached by 2020, these include:
- reaching the Zero Waste to Landfill Objective by 2020 for waste produced by its headquarters, logistics centres, stores and Inditex factories;
- getting 100% of its stores (including Zara) eco-efficient, including new locations and refurbished stores;
- Increasing the manufacture of more sustainable products by using more sustainable fibres;
/ The 2016 Inditex Annual Report suggests that the brand is optimising its supply chain with the dual strategic objectives of (i) increasing compliance with the establishment and maintenance of stable relationships with suppliers and (ii) increasing compliance with Corrective Action Plans.
/ Inditex intends on expanding its Lean Project to new factories in 2017 from the pilot factories in its Chinese supply chain. The Lean Project is an initiative carried out by Inditex’s industrial engineers – which aims to improve working conditions, including wages, by means of improved production management systems.
/ Inditex is a member of the Zero Discharge of Hazardous Chemicals Group that aims to eliminate the discharge of hazardous chemicals by 2020.
/ In December 2015, Inditex and the NGO Water.org entered into a four year partnership agreement to which Inditex has committed USD$3 million to Water.org projects in Bangladesh and Cambodia, mainly to provide access to safe water and and sanitation for low income people through micro-credits.
/ Inditex has a platform centered upon promoting worker health called InHealth. It features a newsletter, published every two weeks, with information about health, physical activity and healthy eating. This initiative also has a blog and a platform for health management. The platform is already available in a number of countries and will be launched in Russia, Belgium, Greece and Portugal during 2017.
- it contributes to the work MSF does in providing assistance for Syrian Refugees in Kilis (Turkey); and
- it finances the personnel at the the Spanish headquarters of the Emergency Unit. The Emergency Unit is responsible for monitoring and managing emergency interventions;
/ In 2016, Inditex states that it dedicated 16% of the total investment in social programmes to education. As a result Inditex states this have driven new initiatives with Tinguisha University (China) and Cornillas Pontifical University (Spain).
/ Inditex shares a sustainability balance sheet in its 2016 Annual Report. This balance sheet breaks down a range of sustainability indicators.
/ In 2016, Inditex allocated €3.7m to Water.org to improve access to safe water and sanitation in developing areas. The contribution will facilitate more than 33,000 microloans for this purpose and will benefit more than 160,000 people in Bangladesh and Cambodia.
/ Inditex CEO and Chairman, Pablo Isla Alvarez de Tejera, received a total of €10.3 million (approx. USD$12 million) in total remuneration in 2016.
/ In September 2007, Zara withdrew handbags with swastika symbols printed on them.
/ According to Refinery29 and a new documentary about Amancio Ortega, one Zara factory in Tunisia produces 1,200 pieces per day, 150 pieces per hour. Each worker is timed (there is a woman with a stopwatch) and it is referred to as working to the minute which means it should take 38 minutes to finish one shirt, any longer and the factory begins to lose money. The shirt will be sold for three times the manufacturing cost.
/ In 2015, The Guardian reported that black customers at Spanish fashion retailer Zara’s New York stores had been disproportionately identified as potential thieves, a significant proportion of employees surveyed by the Center for Popular Democracy have claimed in a new report. “Zara USA vehemently refutes the findings of the Center for Popular Democracy report, which was published without any attempt to contact the company,” a spokesperson for Zara said in a statement to the Guardian.
/ In March 2017, Amancio Ortega, the co-founder of Inditex, was identified by Forbes as the world’s third-richest person with a net worth of 1.2 billion.
/ In April 2017, Zara removed a denim skirt, printed with a frog face akin to the alt-right hate symbol Pepe the Frog, from stores following online outrage.
/ In 2014, Zara removed childrens striped pyjamas from its stores when it was likened to clothes worn by Jewish concentration camp prisoners.
/ Inditex has a Ready to Manufacture code of good manufacturing practices for textile and leather products for facilities that undertake wet processes (dyeing, washing, tanneries and printing).
/ In 2016, Inditex and the Austrian Company Lenzing jointly developed a new material made from cotton waste and wood from sustainably managed forests called Refibra Lyocell.
/ Since 2016 Inditex states it has worked with 160 direct suppliers to verify compliance with its PFC Policy which aims to ensure all its products are free from perfluorocarbons (PFCs), compounds used in the waterproof and water repelling finishes.
/ Inditex participated in a working group that is developing common labelling methods that communicate the environmental impacts of products for the European Commission’s Product Environmental Footprint Pilot.
“From moral responsibility to legal liability? May 2015 Repórter Brasil & SOMO Modern day slavery conditions in the global garment supply chain and the need to strengthen regulatory frameworks: The case of Inditex-Zara in Brazil“
The current research provides indications that the company’s supply chain monitoring is not 100% effective.
In its response to the 2011 slave labour scandal, Inditex combined progressive measures in the voluntary CSR realm with reactive litigation in the legal realm. In other words: it voluntarily assumes ‘moral’ responsibility but resists legal responsibility for the working conditions within its supply chain. In fact, this combination of strategies reveals an inconsistency: in the CSR realm, Inditex assures its stakeholders that it is able to effectively monitor its supply chain, while in the legal realm, it refuses to assume responsibility for the conditions in the sewing workshops, arguing that outsourcing was unauthorized, Zara Brasil was not aware of it and that its contracting party had been deceiving audits, i.e. Zara Brasil is unable to control its supply chain
WALTER LOEB | FORBES
Zara has become the leader in rapid development of fast changing fashions. – 3/30/2015
With huge scale comes huge challenges. Inditex’s operations are now so large that every action the company takes has the potential to have vast negative impact on the planet. If every Inditex store accidentally left on a light overnight, it would add up to almost nine years of wasted electricity. – 3/30/2015
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