A Primark store in the UK

London, June 17: Indian companies which employ child labour are now at risk of being “named and shamed” and having lucrative contracts cancelled by western buyers who are themselves under pressure to demonstrate their “ethical” credentials.

Three factories in south India alleged to have used children to finish off embroidery and sequin work at home have been sacked as suppliers by Primark, a High Street clothing store whose turnover by volume is second only to that of Marks & Spencer.

Primark claimed it knew nothing about the use of child labour until it was alerted by the BBC’s Panorama, which is likely to identify the guilty companies when the programme is broadcast on Monday.

Reports in Britain say “the three suppliers in question are based in Tirupur, the Tamil Nadu manufacturing hub known locally as T-Shirt City”.

For Indian companies, “ethical” could become the new threatening buzzword after “green” as their western rivals try to flush out competitors deemed to enjoy a price advantage because of use of cheap labour. The dilemma is most acute for the poor in India: if they can no longer be employed on low wages, they will become even poorer.

Primark announced yesterday that it was stopping purchase of clothes from three factories in southern India for “failing to meet its strict ethical standards”.

Its statement said: “Detailed investigation has found that these factories had sub-contracted embroidery and sequin work on a small number of designs to unapproved sub-contractors without Primark’s consent or knowledge. The affected garments represent 0.04 per cent of Primark’s worldwide sourcing. The sub-contracting involved home working and in some instances children were also found to be working at home.”

Primark said: “The investigation was carried out immediately after receiving information from the BBC.”

Some critics of Primark will wonder whether the company acted only after being fingered by the BBC.

It emphasised, however: “Primark is an ethical business that demands the highest standards from its suppliers. It has a strict Supplier Code of Conduct which expressly bans the use of child labour. In addition none of our suppliers is permitted to sub-contract without our specific consent and agreement. None of these suppliers is permitted to use home working.”

The problem for Primark and other western buyers is that they themselves run the risk of being “named and shamed” if they are seen to profit from cheap and especially child labour.

“As soon as Primark was made aware of the facts the company acted immediately, cancelling all new orders with the factories concerned and withdrawing from sale the embroidered garments involved,” it said.

It further announced: “Primark will also appoint a highly reputable NGO in southern India as a partner to act as its eyes and ears on the ground, continually investigating how and where garments are made, to identify any unauthorised sub-contracting. Discussions are at an advanced stage and an announcement will be made in due course. Primark will continue its own factory inspections and unannounced visits.”

But Primark’s move to axe the suppliers rather than helping them improve working conditions has drawn flak from campaign groups, adds PTI.

“Cutting and running from suppliers following exposure by campaigners or the media only serves to punish those workers brave enough to speak out about their conditions,” Martin Hearson, the campaign director of Labour behind the Label, said.

“It certainly won’t do anything to improve their lives. Such actions make Primark’s ethical claims ring hollow.”

Last year, Primark spent £700 million on goods produced in the developing world.

Figures released at the end of April by Primark’s owners, Associated British Foods, revealed the clothing chain had increased revenues by 25 per cent to £899 million. Primark commands a 10 per cent share of the UK clothing market by volume, second only to Marks & Spencer.

It is understood that George Weston, AB Foods’ chief executive, was personally heavily involved in the decision to sack the Indian suppliers.

The move comes two weeks after Channel 4 pulled a documentary called The Devil Wears Primark from its schedules. Channel 4 said at the time it would show the programme, which looked at conditions in foreign factories, at “a later date”.

Primark’s code of conduct stipulates the following conditions: “Employment is freely chosen; freedom of association and the right to collective bargaining are respected; working conditions are safe and hygienic; child labour shall not be used; living wages are paid; working hours are not excessive; no discrimination is practised; regular employment is provided; and no harsh or inhumane treatment is allowed.”