Marks and Spencer

Background

Marks and Spencer describe themselves as 'one of the UK’s leading retailers, with over 21 million people visiting our stores each week'. Their products are sourced from approximately 2,000 suppliers globally, they have over 600 stores in the UK and they employ 75,000 people in the UK and abroad.

They operate 285 stores in 40 'territories' worldwide, from Bermuda to Bahrain, Hungry to Hong Kong, Spain to South Korea and Poland to the Philipines to name just a few

They claim to be 'the number one provider of womenswear and lingerie in the UK', with their clothing and homeware sales accounting for 49% of their business. The remaining 51% of their business relates to the sale of food produce and products.

For the financial year 2007/08, M&S reported revenues of £9022 million, up from £8558 million in 2006/07. Their recorded profits also increased from £659.9 million for 2006/07 to £821 million for 2007/08

Biographical Information

History

Michael Marks, a Russian born Polish refugee who was a founding member of M&S began trading in 1884 when he opened a stall at Leeds market. In 1894 he began looking for a partner and was joined by Thomas Spencer. In 1903 Marks and Spencer Ltd became registered as a firm.

Ethical Trade?

Marks & Spencer claim that they have always taken their 'responsibilities to customers, employees, partners, suppliers and local communities seriously' and they are a member of the Ethical Trading Initiative (ETI) which operates a 'base code' for how its member businesses should operate . The ETI describes how it aims to develop good practice and provide a generic standard for company performance through its code which states its aims as to ensure that. :

• Freedom of association and the right to collective bargaining are respected
• Working conditions are safe and hygienic
• Living wages are paid
• Working hours are not excessive
• No harsh or inhumane treatment is allowed
• Child labour shall not be used
• No discrimination is practised
• Employment is freely chosen

Yet Marks & Spencer was named by Ethical Consumer magazine as the UK's 3rd least ethical place to buy clothes in 2005 which is a glaring contradiction. People and Planet may be shedding some light onto this when they state that a 'company’s membership of the ETI is no guarantee that conditions for its workers are acceptable. Retailers do not have to meet minimum standards to be members - they just have to commit to working towards these standards'.

In 2006, The Institute of Development Studies published the results of a study it had undertaken into the ETI. It is reported that the ETI 'has had little impact' and has 'failed to stop the exploitation of workers who produce the bulk of the products sold in UK shops'. Verkaik of The Independent describes how the report 'shows that while some working conditions have improved, in most cases the agreement has made little or no difference'. Workers continue to 'remain on low incomes, have no union representation and in some cases are harshly treated by their bosses'.

Breaches to the code

In 2007, BBC's Newsnight is reported to have exposed the use of forced child labor in the Uzbek cotton industry that had become a "deliberate state policy" aimed at "acquiring extra profits." Uzbekistan is the world's third-largest cotton exporter and whilst child labour had for many years been an issue there, it was reported that 'in recent years forced child labor has spread on a "mass scale," and that working conditions for thousands of minors who toil in Uzbek fields have worsened'. Children as young as 9 were described as being accompanied by police as they were sent to work in the fields. They were being paid just 2 pence per kilogram of cotton, which according to officials, is 40% less than pickers were paid.

The cotton was being used for making clothes sold in Britain and following the BBC's expose, M&S are reported to have said they would stop buying Uzbek cotton. This action was praised by some campaigners, yet it also begs the question of why did it take a very public expose in the British media before M&S took action, when child labour had been an issue in the country for many years?

Marks & Spencers document entitled 'GLOBAL SOURCING PRINCIPLES' may shed some light on this question. The aim of the document is to set out standards which suppliers for M&S are asked to follow. In the document, which sets the minimum age for workers to be at least 15 years old, it states that all production sites are visited and regularly assessed to ensure compliance. It does, however, go on to admit that it 'would be impossible for us to monitor or control the working conditions of each individual who contributes to what ultimately becomes a Marks & Spencer product' due to the complexity of supply chains. They exonerate themselves by stating that 'we establish a set of standards which includes specifications appropriate to the industries and countries manufacturing the products. It is the supplier’s responsibility to achieve and maintain these standards'.

Gokaldas Export, which supplies brands including Marks & Spencer, Mothercare and H&M, are reported to have confirmed that wages paid to garment workers were as low as £1.13 for a nine-hour day. This is a breach of the ETI's code as, according to factory workers and Indian unions, it fails to meet their basic needs. A factory owned by Gokaldas Exports was also the scene in 2007, where a young woman hung herself in the toilets. According to the Guardian, a 'report by a number of Indian NGOS alleges that she was verbally sexually harassed and repeatedly refused permission for leave on the day she died'.

According to Ethical Consumer, which declared M&S as the 3rd least ethical place to shop for clothes, 'ethical standards were so low among the 27 high street clothing chains surveyed that none of them could be recommended to shoppers with a conscience'. , They report that there is a general trend where 'fashion retailers seemed to be locked into a "race to the bottom" by selling increasingly cheap clothes made in low-wage economies with scant regard for workers conditions'.

Brushing off accusations of exploitation

As War on Want highlights, voluntary ethical initiatives allow companies 'to brush off accusations of exploitation'. In the report in The Scotsman which explores the impact of the drive for cheaper and cheaper clothing, War on Want's Simon McRae is quoted as saying:

"Having an ethical code for these companies is such a contradiction. They may be signing up to ethical labour codes, but in pushing prices down and keeping them down they are actively hindering ethical practices. They can't keep pushing and pushing suppliers for cheap clothes and at the same time push for workers' rights."

Companies such as M&S may exonerate themselves by puting the responsibility for ensuring ethical standards onto the suppliers, but the current drive for cheaper products can often put the suppliers in an impossible position. The words of Luman Group chairman Mohammed Lutfor Rahman, who owns a factory in Bangladesh, sheds some light on this issue when he states that "Buyers who come to Bangladesh tell us, 'we are businessmen, we want to make money. If we see cheaper prices in China we will go there'." He then added: "I would be the happiest man in the world if I could provide my workers with good money, air conditioning, health benefits. They are like children to me. But if I cannot cover the costs of running a factory, it will close."

Voluntary codes are no substitute for mandatory ones. Mandatory codes are enforceable, voluntary ones are not. As Hertz has argued, voluntary measures are in effect quite meaningless as companies can always walk away from voluntary codes. They are unenforceable and if there are breaches, there can be little or no recourse. As with the ETI, all that is needed is a stated commitment to ethical codes, companies are only suspended from the scheme if they refuse such a commitment. But a commitment does not necessarily translate into action and outcomes: as is the experience of many of the workers described in this article. The ETI also has no power of inspection, they must simply take the word of their member companies and trust the reports that the companies submit about themselves as being an acurate reflection

Marks and Spencer state that in order to enforce their sourcing standards, they undertake regular site visits and assessment. Yet the same document also admits that they are unable ensure to that these standards are met. McRae from War on Want criticises companies for not doing enough to enforce their declared standards: "The whole system relies on audits. Workers can be questioned in front of their bosses; audits are often short and sometimes take place just once a year".

It has also been argued that signing up to voluntary codes for social responsibility is a tactic used by the business world to avoid binding regulations and constraints on corporate power. In other words, so that companies can be seen to be acting responsibly whilst behind the scenes they continue with business as usual. Such measures of corporate social responsibility have also been criticized as being little more than a PR exercise as companies are not driven by concern for people and communities, but by their own reputations. This could surely provide and explanation as to why it took a BBC expose into child labour before M&S took action with their cotton suppliers. Businesses are commercial entities acting in the pursuit of profit. Currently law states that actions must be in the best interests of their shareholders, in other words to maximise their returns. Their primary interests must be 'shareholder value and profit projections, not justice, equity or morality'. Initiatives such as membership of the ETI works to improve their bottom line as 'cause related marketing enhances corporate image, builds brands, generated PR and increases sales', which has been descibed as 'hypocritical window dressing'.

If voluntary measures are not making the difference, then mandatory regulations must surely be the answer, as John Hilary from War on Want has argued: "Exploitation of workers in developing countries such as India is standard practice for British retailers right across the spectrum. This just underlines the urgent need for Gordon Brown to step in now and stop these abuses once and for all."

People

Stuart Rose became Chairman and Chief Executive in 2008.

Publications, Contact, Resources and Notes

Contact

Address:

Marks & Spencer Head Office

Waterside House

35 North Wharf Road

London W2 1NW

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