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Business Enterprise: Business & Sustainability Essay

Primark store Limited is one of the major clothing retailer company that is based in Ireland with more than 120 stores in the UK, more than 30 stores in Ireland, and has a 8 stores located in Spain. Primark limited also have opened a store in Netherlands. Primark is a subsidiary of ABF (Associated British Foods) Plc, as at the end of 2008, the company had a total of 27,500 employees working in about 187 stores that the company owns in several countries.

Primark stores mainly sell clothes at budget prices, its success depends on sourcing for supplies at a cheaper price, fashioning cloths with plain designs using simple fabrics, and making these clothes in popular sizes hence being able to cut a lot of costs. This study paper will take a critical look at ethical issues and environmental management issues of Primark. Ethical operations Ethical issues are issues that mainly deal with correct or moral business practices that an organization has to follow when carrying out its operations.

Primark on several occasions has been seen has being unethical in some of its business practices. In order to try and improve its ethical ranking and create a positive image, Primark in 2006

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joined other organizations in Ethical Trading Initiative, which is a collaborative agency that brings together various businesses, NGOs, and labour unions to address labour issues that arises in supply chains. Ethical Trading Initiatives members commit themselves to work towards implementing a code of conduct that is founded on the ILO (International Labour Organization) main principles.

ETI also gets its support form the British government. Accordingly when ETI assessed Primark in 2007 it concluded that Primark was operating ethically. Primark states that:

• It is an ethical organization which stipulates that its suppliers have high standards.

At the same time the company has a firm supplier code of conduct that strictly prohibits child labour. More so, all Primark suppliers are not allowed to sub-contract before getting consent from Primark allowing to the supplier to sub-contract. Lastly, Primark does not allow any serious violation of its basic principles.

Ethical code of Primark The following are the main ethical principle of Primark:

• Equally opportunity for all regarding employment

• Safe and clean working conditions

• No use of child labour

• Employees have freedom of association

• Living wages should be paid

• No discrimination at the work place

• Standard working hour for the employees

• Regular employment is offered

• Inhumane treatment of its workforce is not permitted (Primark Stores, 2008). Assessing the Primark Ethical issues Unethical practices Primark limited has in the past had a very negative ethical perception from the public.

For instance, in 2005, the company was ranked the lowest among all the major clothing stores in the UK, it only managed to obtain 3. 5 points out of the possible 20 points, on the ethical index used. The ethical index used takes into account issues such as worker’s rights, if the company carries out business with governments that are oppressive among other aspects. Child labour Primark has also been accused of using child labour. For instance in 2008, June, a program called Panorama from the British Broadcasting Corporation (BBC), showed what appeared as unethical manufacturing activities in Primark stores’ supply chain.

BBC undercover reporters’ unearthed child labour being used in three different garment companies in India that were sub-contracted to work for Primark (BBC News, 2008). Following this revelation the BBC notified Primark about there discovery. Primark replied by stating that it was not aware of such activities in India and that it could never allow such things to happen if it was aware. Accordingly Primark stooped business transactions with those companies that were mentioned as involved in child labour. However, child protection advocates criticized Primark for being irresponsible.

They further pointed out that the action taken by Primark could result in more hardships for the labourers. According to them, Primark would have tried to make sure that working practices are corrected in those implicated companies (BBC News, 2008). According to Fashion Victims (2009) workers in Bangladesh work for 80 hours every week and they are paid only 5p for an hour, at the same time these workers are forced to do overtimes despite the fact that they are working under deadly conditions, all this is done because of companies like Primark , Tesco and Adsa.

These budget stores though they have promised that their suppliers’ be ethical, they continue to buy from companies where labourers work in terrible conditions. Recent research from “Fashion Victims” links a number of sweatshops workers to big clothing stores that are supplied to them. Previous, this connection was hard to ascertain, however garment labourers who were interviewed by Fashion Victims (2009) proved that they were indeed sewing clothes for Primark and other big clothing stores. However, Primark refuted any involvement.

But, Fashion Victims (2009) assert that Primark was very much aware of what is done in these factories. Fashion Victims (2009) argues that when Primark demands its suppliers to supply it with lower priced materials, the only variable that can be reduced is labour costs, if Primark squeezes suppliers, the suppliers will only do one think: cut down on wages paid to the labourers. Fashion Victims (2009) sums it up by stating that it important that important retailers such as Primark remain in Bangladesh so that they can make sure that their suppliers are treated well and compensated fairly.

Use of immigrant workers

Primark has also accused of using immigrant workers in one of their stores and paying them just slightly than 50% of the minimum wages. It had earlier been reported by both the Observer and the BCC that one of the Primark stores located in Manchester known as TNS Knitwear could have possibly violated major employment and immigration legislations. Violating these laws could result to Primark being fined as much as 10, 000 sterling pounds, for every illegal employee working from the store, and a possible law suit against Primark for evading tax and abusing employment laws (McDoungall, 2009).

Those workers, who were caught on hidden camera by the Observer undercover reporters, were seen being paid 3 pounds as their hourly pay. This is only about 50% of stipulated 5. 73 pounds minimum wages that a worker is supposed to earn per hour. Further more, the immigrants were reported to be working for 12 hours every day all through the week. A lot of these immigrants were Pakistanis, Indians as well as Afghans. The Observer reports indicate that this has been going on for the last five months.

The garments that are sewed by these immigrants’ workers who are lowly paid end up retailing in biggest and highly profitable clothes stores in Manchester’s busy market (McDoungall, 2009). Workers working at TNS as well as Fashion Waves were captured on camera confessing their illegal presence in UK. For instance one Pakistani who was busy trying to finish a order form Primark explained that his visa had expired nearly eight years ago, still he managed to remain in the UK working without the authorities being aware.

At the same time, the working conditions and environment of TNS as well as Fashion Waves were revealed. According to these investigations, the working environment at these two stores is cold and overcrowded. Thus, according to McDoungall (2009) this is clear violation of health and safety rules. Most remarkable is that the undercover journalist who was involved in these investigations was paid 3. 50 pounds for an hour of hard labour, which are 2. 20 less pounds for recommended minimum wages.

Nonetheless, even after this compelling evidence TNS Knitwear went ahead to deny these allegations made against them, Fashion Waves chose to remain silent on the issue. Because of the seriousness of these allegations Primark agreed to take away all Ethical Trade Initiative references that it had placed on its stores. This was in understating that ETI, which advocates for ethical conduct of major British retailers requested Primark to withdraw its membership until those allegations are sorted out (McDoungall, 2009).

Accordingly Primark stated after this revelation by the Observer together with the BBC that it was launching an investigation into the issue. Primark as well added that it had given all the information it has discovered to the Britain Border Agency for further investigations. Form this discussion it can be deduced that Primark Stores has been involved in a lot of ethical issues concerning its operations and its suppliers. Environmental management With increased understanding how important our environment is to us and our future generations, organizations are now required to create sustainable use of environment.

Such ways could through recycling, proper production processes to avoid wastage and industry best practices. In this section we are going to examine how Primark tries to meet its environmental duties in order to reduce the impact of its operations and other processes on the environment. Primark being vast chain of stores with suppliers as far as in India, it naturally monitors various separate facilities as well as operations. Thus, it has to have some kind of measures and structures put in place to improve its environmental performance and prevent pollution.

To this end Primark has endeavoured to:

• Improve its general environment performance as well as compliance by following international environment standards such as the ISO 14001 (International Organization Standardization)

• Has provided a structure for use of pollution prevention practices

• Promotes of use raw material efficiently Primark also restated it objective to environmental managed.

The company restated that:

• It aims at improving its recycling systems and waste management. In this regard the company aims to recycle substance like food wastes coming form its workers’ canteens.

• In has improved its recycling capacity of other materials. For instance in 2008, Primark recycled over 8800 tonnes of cardboard as well as more than 1190 tonnes of polythene bags.

• All its cardboard as well as plastics are later colleted then recycled later by a specific waste collecting company named Sevenside (Carbon networks, 2009).

Assessing environmental management in Primark: Environmental complains because of dumping Primark has been accused of produced cheap clothes are discarded after a short period.

for example in 2008, the Department for Food, Environment and Rural Affairs in its study that was titled as Public understanding of sustainable clothing, it was established that low-priced clothes were highly likely to be thrown away in landfills instead of being donated to charities. Last year when committee members form the Department made a visit to Croydon dumping site, there found what was being referred to as “Primark effect” going on which was increase in amount of textile waste on that dumping site (Carbon networks, 2009).

According to head of David Moir who is the head of charity shops, the increase of budget stores such as Primark was making it hard to sell low quality material; this was is because it becomes very complex to price such clothes if buying them when new is very cheap (Carbon networks, 2009). Indeed, Sharma (2009) reports that the British government in its effort to educate the public on the dangerous of discarding used or unused clothes, the government recently launched a campaign. The main objective of this campaign that started during the London Fashion Week was to tackle the clothing dumping problem referred to as “the Primark effect.

” According to different sources, each year British consumers purchases over 2 million tones of clothes, but nearly 1. 2 million tones of these cloths end up being discarded (Sharma, 2009). Another environmental issue that seems to follow Primark is use of pesticides on farms where cotton supplied to Primark is planted. Some reports seem to indicate that a number of these pesticides or chemicals used could degrade the environment in the long run. However, Primark seems unable to address the issue. Read about H&M Sustainability Competitive Advantage

Recommendation

In order for the Primark to improve it’s ethical and environmental management it should attempt to incorporate the following:

• Primark should embark on training its workers and suppliers, this training should be carried out together with the local workers’ rights groups as well as labour unions. This training is particular necessary in Bangladesh and India since a lot of complains on ethical issues comes from these two countries. The company ought to expand its assessment teams in these countries to enhance the effectiveness of its assessments and ensure that its entire stores, partners and suppliers comply with the set standards.

• The company should also endeavour to create a more conducive working environment in all its stores, to address the poor working conditions cited in a number of its stores.

• Primark should come up with strict but workable code of conduct that has to be followed by all its suppliers particularly regarding minimum pay and working conditions, there should be away to measure how Primark suppliers’ are adhering to this code, and regular appraisals should be carried out.

• On environmental management, the company out to create a sustainable way of its products, i.e. the company should expand its recycling processes since it has been established that a lot of clothes bought from its stores end up in landfills.

• There is also need to carry out a consumer educative campaign aimed at educating consumers on need to properly dispose their clothes,. This can be by taking the clothes back to Primark stores for recycling. This campaign is also necessary to the suppliers who formulate sustainable and environmental friendly ways for the raw materials like cotton used by Primark.

• Primark has the ability to be a compel good practices through establishing and maintaining ethical and accountable business practices, in order to apply this abilities, Primark has to adhere to labour laws as an integral aspect of its product outsourcing plan. The duty of meeting of fundamental labour as well as environmental regulations can not merely be passed to suppliers. In summary we recommend that Primark should ensure that:

1. Employees and procedures at each level of production are accorded their fundamental rights, respected and given rightful wages

2. No use of child labour at any given level of production

3. Sustainable environmental managements methods should be used at all level of production

Conclusion

From this study we can conclude that Primark has weak ethical and environmental practices and it needs to improve on these two issues. This is very important for sustainability of the business.

Reference: BBC News (2008): Minister pressed on child labour: www. news. bbc. co. uk/1/hi/business/7467846. stm Carbon networks (2009) low quality clothes increases textile waste: Accessed on 25/3/2009 Available at: http://www.environmentalexpert. com/resultEachPressRelease. aspx? codi=44839

Chyssides G and Kaler J (1998): An Introduction to Business Ethics: London; Thompson Business Press Fashion Victims (2009): poor working condition in Bangladesh: Accessed on 25/3/2009, Available at: http://www. waronwant. org/campaigns/supermarkets/fashion-victims/inform/13593-fashion-victims

Kotler, P (2003): Marketing Management: International Edition, New Jersey; Prentice Hall Marketing Week: (no author cited), (2008, June 18): Primark fires Indian suppliers: Marketing Week, p.5.

McDoungall, D (2009): Use of immigrants workers: Observer (sun/ 11/ Jan 2009): http://www. guardian. co. uk/business/2009/jan/11/primark-ethical-business-living Primark Stores (2008): Our ethical code of conduct: Accessed on 25/3/2009, Available at: www. ethicalprimark. co. uk

Sharma, N (2009): British Government Launches Campaign to Target “The Primark Effect” in Clothing: Accessed on 25/3/2009, Available at: http://wastersblog. com/407/primark-effect-recycling-clothing/

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