Labour Behind The Label

Responded to survey: Yes

MSI involvement: Yes, ETI

Grade 3.0: Can offer concrete examples of steps to increase wages in the supplier base, but there are either significant omissions or there is no clear plan to move beyond pilot projects [what's this?]

Summary

Asda’s ‘Lean’ manufacturing programme in Bangladesh is expanding, and can demonstrate some wage improvements. Asda has also made a public commitment to address the price it pays for goods and include a calculated labour cost in this amount. But more work needs to be done to involve unions in the process and empower workers beyond consulting on their opinions..

Position on living wages

‘We recognise that the industry face a big gap on pay benchmarks between a minimum and living wage. We have started a journey to close that gap that takes into consideration the needs of the workers.’

Living wage benchmark

None given. Asda said the following in regard to the AFW: ‘[Asda] support the principle of what the Asia Floor Wage has set out to achieve. A mechanism and methodology for assessing wages and how this translates to achieve a standard of living across multiple sourcing locations. We do believe however that there should be more dialogue between the AFW and retailers as to how we move forward together.’

Position on Freedom of Association

‘Improved dialogue between workers and management is essential and forms a major part of the Lean project [this is the name of Asda’s factory programme – see below] ensuring workers are at the forefront in the decision making process and driving these changes within the factory.’

Work so far on living wages

Learning from Asda’s ‘Lean manufacturing’ pilot projects in 4 factories is now being replicated in 17 factories in Bangladesh. These factories produce collectively $150m of export product.

The programme aims to ‘...empower the local workforce through improved skill levels; Improve and re-engineer production flow; Increase earning potential for workers, enabling them to enter skilled pay-band levels; Reduce working hours to ensure a better work/life balance’

The results: ‘Our pilot scheme in Bangladesh has been so successful we’re going to roll it out in factories in India and China. It has achieved:

1. A 14 per cent increase in wages
2. A 10 per cent drop in absenteeism
3. A 5 per cent drop in labour turnover
4. A 17 per cent increase in efficiency.’

Average current wages in the 4 original ‘Lean’ factories are TK 6300, TK 3500, TK 3900 and TK 3,900. The Asia Floor Wage for Bangladesh is over TK 10000. The Ethical Trading Initiative rated Asda as a ‘leader’ in terms of its alignment of ethical and commercial practices in 2010 and praised its work on purchasing practices.

Plans on living wages

‘Over the next 2 years:

• George plan to build SMV’s [Standard Minute Values] into open costings based on the report issued by Prof Doug Miller.
• Conduct independent research into monetary value for a SMV that applies to each country we source from and link what we pay for a garment to a wage ladder
• George wants to build up Industrial Engineering capacity within our supply chain to meet these challenges
• George stable supply base will help support the project. Top 15 suppliers = 42% of total turn over
• Engage with a leading NGO and Trade Unions to gain worker feedback on the impact of Lean.’

Furthermore:
‘We have set ourselves the target of including Sustainable labour costing for all our core volume lines by 2013. This type of product accounts around 30% of our volume.’ 

Our comments

Asda’s work on its ‘Lean’ factory programme has progressed since 2009 and wages have gone up. But not by much. ‘Lean’ is achieving a 14% average increase in wages. For workers who started out on the minimum wage (which is a third of the living wage in Bangladesh) this boost isn’t enough.

This is why Asda’s commitment to assess the price it pays is so important. We’re glad that it is addressing this issue in collaboration with a top academic on the subject, and is now planning work to address the obstacles they face in this assessment. This is a vital step in working towards closing the wage gap.

Asda has yet to decide what its wage benchmarks are going to be. Without this information we are unsure that its price commitments will work towards what workers would class as a living wage. Asda has chosen not to back the Asia Floor Wage – a wage calculated by workers and their representatives – but rather to calculate its own. These benchmarks need to be made public if they are to be credible.

We also have some concerns about Asda’s approach to freedom of association. Worker involvement in the ‘Lean’ project seems to focus on consultation and workers’ committees – an approach which in our eyes often strips workers of the real power to call for change with the solidarity provided by the worldwide union movement. Asda is keen to emphasise that the philosophy of ‘Lean’ is based on worker involvement but asking workers to input into production changes is not the same as giving them space to raise concerns about working conditions.

Some plans have been made to provide training on rights with some local unions, but this doesn’t go far enough. Asking suppliers involved in their productivity programmes to sign access agreements with local unions would be a good start.

It is worth noting, too, that an ActionAid report from May 2011, ‘The Real Asda Price’, found that workers at Asda’s 4 original ‘Lean’ factories in Bangladesh reported harassment (slapping and having their hair pulled) and regularly working 60 hour weeks. This brings some of Asda’s comments about the success of their pilot scheme into question and, for us, highlights the need for more work on real mechanisms allowing workers to stand together and organise to raise their concerns. It would seem that the current workers’ committee mechanism is failing. 

The real Asda price:
Poverty and abuse in George’s showcase factories

Our latest action card deals with the serious issue of sandblasting and calls for a ban on the practice with specific cards targeting ASDA and River Island that may be detached and sent.

Asda has its sights trained on becoming Britain’s number one cheap fashion retailer. But while the company tries leaping ahead of its rivals on the high street, it’s falling behind in its efforts to improve conditions for women workers in poor countries, whose wages are keeping them trapped in poverty.

Asda has a lamentable record on paying poverty-level wages to workers in poor countries who make its clothes and is trailing behind its competitors such as M&S and Primark, a new report by ActionAid revealed today.

Addressing a company's purchasing practices is a key issue, an area where huge changes are recommended by the Clean Clothes Campaign (CCC).  This report by CCC covers working conditions within factories supplying the top 5 global retailers: Tesco, Walmart (Asda), Lidl, Aldi, Carrefour and the lack of sufficient action to address them.

This new report by War on Want uncovers evidence of workers in Bangladesh regularly working 80 hours a week for just 5p an hour, in potential death trap factories, to produce cheap clothes for British consumers of Primark, Tesco and Asda's 'George' range.  The research found six factories producing for some or all of the companies, and found serious workers rights violations in each, with workers too frightened to join a union and few who had even heard of a code of conduct, let alone spoken openly to social auditors.  These six factories prove that despite the fact that all three have commited to ensuring freedom of association, a living wage, legal working hours and proper monitoring and verifaction of supplier factories illegal and exploitative conditions are found within their supply chain.  Whilst the research focused on factories in Bangladesh we can have little confidence similar conditions don't exist in other factories or other countries.

Something different has swept through the UK high street.  Whereas ten years ago, style-conscious teenagers would never be seen, like, dead in a bargain clothes shop, today the Saturday afternoon high street is awash with Primark bags and their proud owners boasting the bargains they have found. That anyone would admit to buying clothes from a supermarket would have been inconceivable until recent years, but ask someone at a party now where their nice new jeans are from, and they may well have been picked up that afternoon along with the baked beans and cornflakes in Asda.  This report aims to set out questions that the consumer can ask of the retailers that are becoming ever more a key part of the consumer horizon.