The Primark Question

Over recent years, this topic has come up as ‘the most asked question’ in Business and Economics lessons. Specifically, is it ‘ethical’ to buy low priced goods produced in poor countries? My personal answer is an emphatic ‘yes’. It’s hard to see how our refusal to open some markets to free trade – particularly in agriculture – helps the world’s poor.

But the debate seems to hinge on the rights, conditions and dignity of the producers. For this reason, retailers like Primark (who like Tesco find themselves on the front line of this debate because of their public profile) seek to anxiously protect their reputations as ‘ethical’ employers. Recently Primark has fired three Indian suppliers because they used child labour to finish goods.

The suppliers sub-contracted smaller firms, which were using child labour to carry out embroidery and sequin work. A Panorama special on Primark will be broadcast on BBC1 at 9pm on 23 June: during their six-month investigation, the BBC uncovered the evidence which they passed to Primark.

Primark responded with:

“The information provided by the BBC enabled us to identify that illegal sub-contracting had been taking place and to take action accordingly … the sub-contracting involved home working and in some instances children were also found to be working at home. We take this lapse in standards very seriously indeed. Under no circumstances would Primark ever knowingly permit such activities, whether directly through its suppliers or through third party sub-contractors.”

According to Primark, the garments affected accounted for 0.04% of the retailers’ worldwide sourcing. It currently has more than 170 stores and made a £200m profit in 2007 on total sales of more than £1.6bn.

And who are the winners? Their shareholders? The shopping public? Their employees – across the world? This discussion will run and run. You might like to ask yourselves a tough one. Are all forms of child labour always wrong?