THE PROBLEM
Primark, the clothing retailer, last month announced it had fired three suppliers in India after it was found that they had subcontracted work to home workers who used child labour. George Weston, chief executive of Associated British Foods, which owns Primark, claimed that the factories had engaged in "systematic deception" and that regular audits had not exposed the breaches. Tesco, the UK retailer, faces allegations of neglect of factory workers after a report from the charity War on Want said that its researchers found workers in a factory in Bangalore being paid "half a living wage". Tesco responded that the claims were "unsubstantiated" and that it always insisted "on high standards" from its suppliers. Is it ever possible for companies with suppliers in developing economies to guarantee that their goods have been produced in ethically acceptable conditions? And what kind of audit system could provide consumers with such a guarantee?
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