Brands: Zara, Massimo Dutti, Pull & Bear, Bershka

Responded to survey: yes

MSI involvement: Yes; Ethical Trading Initiative

Grade 3.5: Can offer concrete examples of steps to develop and implement a living wage methodology in the supplier base, with clear plans to move beyond pilot projects [what's this?]

Summary

Inditex is the only brand to have signed a framework agreement with the international textile union federation. This commits Inditex to work in partnership alongside unions to ensure freedom of association and a living wage is delivered in its supply chain. 

Position on living wages

Inditex has made a commitment to pay living wages. This is written in its code of conduct, is verified by its ETI membership, and forms a core part of its framework agreement (FA) with the International Textile Garment and Leather Workers Federation (ITGLWF).

The framework agreement commits Inditex to work with the ITGLWF on ensuring compliance with the living wage.

Text from the agreement reads ‘ITGLWF will work with Inditex to help secure full compliance either with the standards set out in the international instruments mentioned above, the Inditex Code of Conduct for External Manufacturers and Suppliers and the ETI Base Code, namely:... 5. Living Wages shall be paid.’ 

Living wage benchmark

None given. 

Position on Freedom of Association

‘Inditex truly believes in the promotion of mature industrial relations at all the stages by encouraging social dialogue either at factory level or at international level with our natural counterparts....’

This position is supported by the fact that Inditex is the only brand to have signed a framework agreement with the International Textile Union Federation (ITGLWF). This guarantees the right to freedom of association throughout the supply chain and commits Inditex to working with the ITGLWF to ensure freedom of association is properly respected, and living wages are paid. 

Work so far on living wages

Inditex has been working with Northumbria University on research into labour costing, putting forward the case and a model for using labour costing to address problems of wage defaulting and failure to pay a living wage. It has also worked with the ITGLWF on several interventions to prevent conflict and resolve freedom of association and collective bargaining violations.

In its submission it also mentions involvement in the ETI living wage group and active participation in the UN Global Compact Supply Chain Advisory Group which ‘aims to deliver “sustainable supply chain guidelines” which includes the need to implement the living wage concept.’

Inditex stated its commitment to the proposals raised by the Asia Floor Wage and mentions participation in meetings in Bangladesh to advance the determination of a correct living wage for Bangladesh.

Inditex has also provided training to sourcing and design departments in order to raise awareness of wage defaulting and living wages, to enable these departments to combine proactive preventative action with corrective action plans.

Plans on living wages

Inditex plan to implement the following projects:

• ‘...A pilot project together with the ITGLWF... to promote the sustainable payment of the living wage in appointed suppliers.’
• ‘Development of a specific monitoring programme... to increase assurance that all suppliers are complying’ with the living wage clause in Inditex’s code of conduct.
• Development and implementation of a model for sustainable labour costing.
• A campaign across other international brands to create the necessary critical mass within the industry to promote the establishment of living wages in shared suppliers.
• Development of a purchasing practice programme focused on key sourcing teams together with external experts. 

Our comments

In many ways Inditex’s submission is quite impressive. It is involved in work to address pricing issues, is at the forefront of work to address freedom of association and is working with trade unions, academics, and other industry actors to deliver its commitments. It deserves special credit for being the first brand to sign a framework agreement with the ITGLWF, thereby institutionalising its commitment to freedom of association.

All of these actions have the potential to provide a solid framework for addressing fundamental supply chain issues in a systematic way. However, there is little detail in the submission about concrete actions within supplier factories to increase current wages to living wage level; no detail on current wage levels; and no benchmarks or strategies in place for increasing wages on the ground.

Now that Inditex appears to have the right building blocks in place – a working, constructive relationship with the international union, plans for costings that allow for a living wage and involvement in various industry and multi-stakeholder initiatives – it is time for Inditex to start translating good steps at the international level into practical work on the ground to ensure this translates into genuine improvements for workers. It would also be useful for Inditex to provide some information on concrete impacts this work has had so far; some positive facts would strengthen the case for the kind of institutional work Inditex are doing.

We note that the company’s future plans include pilot projects with the ITGLWF on living wages and a project to implement costings. We look forward to hearing the outcome of these next year.