Primark- Between Affordability and Ethics - Essay Example

? Primark- Between Affordability and Ethics of the Number Module Lecturer’s 22 November Word Count: 1521Executive Summary Primark is a budget clothing retailer that has an official code of ethics. The company requires its suppliers to stick to ethical labour practices while manufacturing its products. However, practically speaking, a series of media reports have surfaced in the past few years which show that many of the Primark products are manufactured at the facilities located in the third world countries like India and Bangladesh, amidst unsafe, unhygienic and shoddy work conditions. Primark’s name has also come to be associated with the employment of child labour and illegal immigrants. The company has a good ethical record in the sphere of environment and animal rights. However, the corporate practices of Primark do leave scope for ethical scrutiny. The top management of the company does need to formally recognize these ethical lacunas and take immediate steps to arrest its dwindling ethical credentials. Executive Summary Table of Contents 1.0 Introduction 4 2.0 Discussion 4 2.1 Labour Practices 4 2.2 Environmental Concern 6 2.3 Ethical Corporate Practices 6 2.4 Animal Rights 6 3.0 Conclusion 6 4.0 Recommendations 7 Reference List 8 1.0 Introduction Primark is a clothing retailer of Irish origins that has its stores in United Kingdom, Austria, Netherlands, Spain, Belgium, Germany, Portugal and Ireland. Primark primarily tends to sell clothing items that affiliate to the budget segment of the market. Thereby it has to face an immense competition from varied other budget segment clothing retailers. Ostensibly speaking Primark commits allegiance to a code of ethics and the company expects its suppliers to follow the principles inherent in this code of ethics and strictly requires the suppliers and factories dealing with Primark to make it certain that the products supplied to the Primark are made by workers employed in good working conditions, and that these workers are treated in a humane and decent manner and are paid fair and wages (Primark 2013). However, in the recent times Primark has been in the eye of the storm owing to a range of issues that happen to go starkly contrary to the company’s professed code of conduct. This report intends to analyze the fact as to how Primark lives up to its ethical claims by considering the performance of Primark over a range of ethical parameters like the international codes of labour practice, complying with environmental norms, affiliating to corporate ethics and animal testing of products. The report in the light of the conclusions drawn from this analysis also intends to facilitate some recommendations. 2.0 Discussion A careful perusal of the official website of Primark testifies to the fact that formally speaking the company has a code of ethics in place that claims allegiance to a range of imperatives pertaining to labour practices, environment, animal rights and ethical corporate practices. However, an extensive research into the media reports tells a different story. In the light of the available facts, it will be utterly insightful to analyze the ethical claims of Primark over a range of parameters. 2.1 Labour Practices The official code of ethics promulgated by Primark expects its suppliers to assure that the products supplied to Primark are made in working conditions that are good, safe, hygienic and humane (Primark 2013). The company also expects the suppliers and factories manufacturing Primark products to make it certain that at no time and in no way they violate internationally recognized codes of labour practice and abstain from practices like child labour, forced labour, paying unfair wages, excessive working hours, and meting inhuman and illegal treatment to workers (Primark 2013). Moreover, Primark joined Ethical Trading Initiative in 2006, an organization that tends to solicit the support and cooperation of a range of stakeholders like Non-government Organizations, corporations and trade unions to facilitate and improve the labour rights and working conditions the world over (Primark 2013). However, going by the recent media reports, it gets evidently clear that practically speaking Primark has not been that proactive in assuring that the suppliers and factories affiliated to it strictly abide by its official code of ethics. It was way back in 2008 that the reports surfaced in many of the credible British media sources that many of the Primark products were being made by the children living in refugee camps in the Southern India, working amidst unhygienic, filthy and inhumane conditions (McDougall 2008). These children were being made to work for long hours to produce apparels that Primark was to sell in the European markets. Certainly Primark acted promptly and in time by sacking the three Indian suppliers guilty of this misdeed, however this child labour scandal certainly did not reflect well on the commitment and sincerity of the company towards its ethical code of conduct (McDougall 2008). Many commensurate reports also unravelled that many of the Primark products were being manufactured in sweat shops in India that employed children and that made them work long hours for a mere pittance. Again in 2009 Primark’s ethical claims came into question when the reports surfaced that the company was using illegal immigrants to manufacture many of its low priced products and these illegal immigrants were being paid just half the United Kingdom minimum wages (McDougall 2009). These revelations not only sullied the reputation of Primark amongst its clientele, but also made it possible to draw the conclusion that the company’s claims of abiding by a strict code of ethics were just hollow professions, and actually speaking Primark was more concerned about the business imperative of keeping its products low priced and affordable. The 2013 collapse of a shoddily constructed manufacturing tower in Savar, Bangladesh, were workers worked amidst unsafe and poor working conditions to manufacture apparels for many leading European brands including Primark was another jolt to the ethical claims made by Primark (Strydom, Nelson & Bergman 2013). Primark itself officially confessed that one of its suppliers operated from the second floor of this eight story building. Thereby these series of debacles do strengthen the assertion that Primark tends to have a very poor record when it comes to ethical labour practices. 2.2 Environmental Concern In its official code of Ethics Primark professes concern for the environment friendly business practices and requires its employees and suppliers to abide by the environmental norms and laws that are prevalent in the country they operate (Marketing 2010). Pragmatically speaking until now no responsible and credible media reports have surfaced that associate Primark with any anti-environment practices, nor any reputed international organization or body of concern has criticized Primark for violating environmental norms. Hence, with regards to environment, the ethical record of Primark is unblemished and unsullied. 2.3 Ethical Corporate Practices Recently Primark’s parent company ABF was blamed of tax avoidance by the Zambian authorities (Peacock 2013). This indeed did not reflect well on the ethical claims of ABF’s subsidiary Primark. Informal reports have also associated ABF with tax havens like Singapore and Hong Kong. Besides in 2012 the two executive directors of Primark that are George Weston and John Bason were paid British Pound 1,796,000 and 1, 93,000 respectively that was way above the remuneration considered to be ethical in the light of the shareholders’ interests and was indeed an ethical wrongdoing on the part of Primark (Associated British Foods 2012). 2.4 Animal Rights Though Primark has its range of cosmetics and toiletries, the company has no official animal testing policy. However, the company does claim that none of the Primark products is tested on animals and professedly the company is totally against animal testing of cosmetic products. So far no information exists in the public domain that refutes the Primark claim of not testing its cosmetic products on animal. Thereby, it would be reasonable to conclude that in the sphere of animal rights, the ethical record of Primark is unblemished. 3.0 Conclusion In the current times when no institution is impervious to media scrutiny, it is imperative for the organizations to affiliate to high ethical standards and norms. In the light of this fact it is indeed commendable that officially speaking Primark sticks to a code of ethics. However, when it comes to practice, the reputation of Primark, particularly in the sphere of adhering to internationally recognized ethical labour practices is indeed shaky and blemished. Guided by the business imperative of keeping its products low priced and affordable, Primark simply ignored the onus of assuring that these products were manufactured in consonance with the ethical labour practices. This intentional or unintentional negligence simply does not reflect well on the ethical claims espoused by Primark. However, Primark has done well when it comes to evincing concern for the environment and animal rights. Yet, the ethical record of Primark and its parent company is not too well in the area of ethical business practices. The company does need to take urgent steps to rectify and correct its ethical record. 4.0 Recommendations This report in the light of its findings makes the following recommendations: The top management of Primark must formally acknowledge the fact that it has a poor ethical record when it comes to abiding by internationally recognized labour code of ethics. Primark should come out with an official action strategy aimed at checking its suppliers from manufacturing the products supplied to the company in inhumane and unsafe working conditions. The company should blacklist all the suppliers found guilty of not abiding by its official code of ethics. The company should constitute an ethics committee that should conduct surprise checks on the suppliers spread across the globe to assure that they abide by the company’s code of ethics. Reference List A Journey through our Business: Annual Report and Accounts 2012, Associated British Foods, London. Marketing 2010, ‘Ethics Come into Fashion’, 24 February, p. 16. McDougall, D 2008, ‘The Hidden Face of Primark Fashion’, The Guardian, 22 June, viewed 20 November 2013, . McDougall, D 2009, ‘Primark in Storm over Conditions at UK Supplier’, The Guardian, 11 January, viewed 20 November 2013, . Peacock, L 2013, ‘Associated British Foods Denies Emphatically Tax Avoidance in Zambia’, The Telegraph, 11 February, viewed 20 November 2013, . Primark 2013, The Primark Code of Conduct, viewed 20 November 2013, . Strydom, M, Nelson, D & Bergman D 2013, ‘Primark Shocked by Bangladesh Building Collapse’, The Telegraph, 25 April, viewed 20 November 2013, . Read More