Italian police on Wednesday visited the headquarters of 13 high-end fashion firms, asking them to hand over documents on governance and supply-chain controls as part of an investigation into alleged worker abuse at fashion subcontractors, judicial documents showed.
The brands that received document production orders are Dolce & Gabbana, Versace, Prada, Adidas Italy , Off-White Operating, Missoni, Ferragamo, Givenchy Italia, Alexander McQueen Italia, Kering's Gucci and Yves Saint Laurent Manifatture , Cris Conf. (Pinko) and Coccinelle.
None of these companies is under investigation and prosecutors have not sought to impose court-appointed administration for any of them, according to the orders seen by Reuters.
The 13 groups did immediately respond to a Reuters request for comment.
In the past two years, five other high-end fashion groups have been placed under such administration and the same measure has been requested for a sixth, in a string of cases that have tainted the image of some of the biggest names in the industry.
Branded products found in workshops under investigation
The 13 brands were drawn into the probe because, during dozens of searches of Chinese-owned workshops which led Milan prosecutors to request or impose judicial administration on the six companies, police also found garments and subcontracting documents relating to these other labels.
The operation on Wednesday was led by the Carabinieri labour unit in Milan, supported by officers in the cities of Florence, Parma and Varese.
Prosecutors did not seek court-appointed administration for the 13 because only smaller quantities of their products were found in the Chinese workshops inspected, the documents show.
The purpose of the requests, according to the judicial documents reviewed by Reuters, is to allow prosecutors to assess how far the 13 companies were involved in the use of exploited labour and whether their compliance and governance models are adequate to prevent abuse.
Once the requested material is handed over, the 13 companies will be allowed to address any issues identified on their own initiative by adjusting their organisational models.
If they fail to do so, Milan prosecutors reserve the right to take further preventive or precautionary measures, the documents show.
Government seeks to safeguard 'Made in Italy'
Investigations by Italian magistrates have exposed widespread exploitation of workers in the fashion and luxury supply chain.
Italian industry minister Adolfo Urso said in October the government had put forward a bill to create legal certification of fashion companies.
Under the initiative, brands, including those targeted by legal actions, could obtain pre-emptive third-party certification of their supply chains' legal compliance.
"With this measure, it will be possible to secure Italy's fashion supply chain, a source of pride for 'Made in Italy', and protect its reputation worldwide," Urso said.
Italy is home to thousands of small manufacturers that make up 50%-55% of global luxury goods production, consultancy Bain has calculated.
In May, Italy's fashion brands signed an accord with legal and political authorities to fight worker exploitation.
Long list of documents
The production orders list a very long series of documents that prosecutors want to examine.
They start with governance material: full historical company registry extracts for the 13 groups, intercompany service agreements and intercompany relationships, corporate organisation charts, job descriptions for staff involved in supplier selection, management and monitoring, and minutes of board and statutory auditors' meetings from 2023 to date.
They then move to internal control systems: procedures for accrediting and monitoring suppliers, and operating practices and instructions on monitoring contractors.
Next comes risk assessment: the organisation, management and control model, minutes of the supervisory body, code of conduct, whistleblowing reports register, a list of disciplinary sanctions from 2023 to date, and training records.
Finally, they look at audit activity: the audit function's work plan and findings, lists of suppliers and subcontractors, copies of contracts signed with the workshops under investigation, and any product-tracking systems.