Aldi‘s clothing bargains – discount buys discounting standards? Working conditions in Aldi‘s suppliers in China and Indonesia Suggestions for consumer and trade union action Thanks • Published by Thanks for fi nancial support: The SÜDWIND Institute would like to thank the “Nordrhein-West- fälische Stiftung für Umwelt und Entwicklung” for its fi nancial sup- port for the production of the German and English booklets. Published by: SÜDWIND Institut für Ökonomie und Ökumene, Lindenstr. 58-60, 53721 Siegburg, Phone: 02241 / 259530, Fax: 02241 / 51308, email: [email protected] Authors: Ingeborg Wick. Chapter 5: N.N. Chapter 6: Urban Community Mission (PMK) / Jakarta. Appendix: with the help of Dominic Kloos. Translations: Edelgard Abram, Liyun Yu-Lingnau, Elke Riekhoff, Ingeborg Wick. Main English translation: John McLaughlin. Layout: Frank Zander. Cover design: Frank Zander (Photos: Roland Müller-Heidenreich, Frank Zander). Copyright photos: BFILM-Verleih/EYZ-Media, Hans Breker, Winfried Fleischmann, Harald Klöper, Dominic Kloos, Bianca Kühl, Klaus Murawski, Roland Müller-Heidenreich, Gisela Pütz, Ingeborg Wick, Frank Zander. Siegburg, May 2007. ISBN 978-3-929704-37-4 2 Working conditions in Aldi‘s suppliers in China and Indonesia • © SÜDWIND 2007 Contents Aldi’s clothing bargains: discount buys discounting standards? Working conditions in Aldi’s suppliers in China and Indonesia. Suggestions for consumer and trade union action. (Translation of the German booklet “All die Textilschnäppchen – nur recht und billig? Arbeitsbedin- gungen bei Aldi-Zulieferern in China und Indonesien. Aktionsvorschläge für VerbraucherInnen und GewerkschafterInnen“, Siegburg May 2007) Contents Preface by Margret Mönig-Raane, ver.di / German Services Union . 4 Preface by Wilfried Neusel, Evangelical Church in the Rhineland . 5 Summary . 6 1. Introduction . 7 2. Portrait of Aldi: Top textile and clothing retailer and discounter . 10 3. Fiercer competition after the phase-out of the WTO Agreement on Textiles and Clothing . 22 4. Discounters and global structural change in the retail trade . 27 5. Case study 1: Working conditions in Chinese supplier factories to ALDI . 33 6. Case study 2: Working conditions in Indonesian supplier factories to ALDI . 60 7. Statement by Aldi and SÜDWIND response . 73 8. Companies’ global social accountability . 76 9. Suggestions for consumer and trade union action . 80 Service section . 85 Bibliography . 85 Abbreviations . 88 Currency details . 89 List of selected ILO Conventions . 89 Glossary . 90 Contact addresses . 93 © SÜDWIND 2007 • Working conditions in Aldi‘s suppliers in China and Indonesia 3 Preface Preface by Margret Mönig-Raane, ver.di (German Services Trade Union) eople need clothes, people wear clothes – Politicians have the task of preparing and im- Pthis is a basic need of civilisation. And cloth- plementing demands for human and employer ing must be bought in a responsible way. rights, and for social and ecological standards in international trade agreements and the rules for We all know the pictures of Asian factories spurring the economy. and the miserable conditions, in which the work- ers, overwhelmingly women and also children, In the specifi c case of the discounter Aldi, manufacture trousers, jackets and dresses for the ver.di backs the plan to exert pressure by run- global market. Much of this clothing ends up in ning a campaign focusing explicitly on the com- discount stores such as Aldi, where, week after pany. The aim must be for Aldi to commit itself to week, cheap socks, t-shirts or pyjamas are adver- a binding code of conduct that insists on decent tised in newspapers in large colourful pull-outs. working conditions in its suppliers’ factories. In view of the buying power of a company like Aldi, The largest discounter in Germany is epito- this can have a real impact on factory managers mized by its isolation from the outside world. The in China, Indonesia and other Asian countries, sourcing of the clothes it sells and the conditions which trample all over employees’ rights. in which they are produced are something the company and its owners, the Albrecht brothers, But consumers also have a key role to play: have long cloaked in secrecy. bargain-seeking, “Geiz-ist-Geil” (Stinginess-is- Sexy) thinking has negative consequences for all This brochure provides comprehensive infor- sector workers. The loss of workers’ rights, low mation on the research by the SÜDWIND Insti- pay and growing pressure are the fl ip side of an tute, which has shed light on this shady area and ever-expanding, limitless discount economy. In a discovered factories in Indonesia and China that world, in which interrelatedness and mutual de- produce clothing for Aldi. The business princi- pendencies are continually growing, responsibil- ples operating in these factories seem to be: em- ity for this web of inter-reliance is also growing. ployees are badly paid, have no rights and im- Like many other organisations, ver.di has decid- mediately lose their jobs if they dare to demand ed to face up to this task. better conditions. The need for affordable, fashionable and Together with several alliance partners, the good quality clothing is something we expressly service trade union “ver.di” has campaigned for endorse. Yet all of us – consumers, retailers and many years for the implementation of interna- suppliers – have it in our power to determine tionally recognised social standards in trade and whether human beings manufacturing goods to industry. Together with the Clean Clothes Cam- meet our needs have to do so with no rights and paign and Attac, we have recently publicised no commensurate payment – or, whether their the sourcing conditions of goods being sold by working conditions comply with social and eco- Tchibo and Lidl. Together with church-based, logical requirements. We can all make our own environmental and developmental organisa- contribution. tions, ver.di set up the CorA-Network for Corpo- Margret Mönig-Raane, rate Accountability, which exposes poor working deputy chair of ver.di conditions and seeks direct discussions with the companies concerned. However, we are convinced that as well as dis- cussions and greater public transparency, politi- cians also have key responsibilities. Companies’ voluntary commitments to comply with social and environmental standards are not enough. 4 Working conditions in Aldi‘s suppliers in China and Indonesia • © SÜDWIND 2007 Preface Preface by Wilfried Neusel, Evangelical Church in the Rhineland s the gulf between poverty and prosperity Textiles and clothing for Aldi are produced in Ain Germany continues to grow, so, too, does these countries under unacceptable working and the consumption of both cheap goods and lux- living conditions. Under no circumstances can ury goods. Discount shops are springing up like this situation be allowed to continue. As consum- mushrooms, outdoing one another in the bid to ers, we cannot allow ourselves to be benefi ciar- provide the cheapest possible special offers. A ies of violations of the human rights of sewing large number of Germans relies on shopping at workers in the countries of the South, even if our discounters for their day to day survival. household budget is stretched. In the case of Germany’s biggest discounter, The Evangelical Church in the Rhineland, however, the picture is somewhat different. More within the framework of the Conciliar Process, is than four fi fths of the population shop here – i.e. committed to “Justice, Peace and the Integrity of not just the poor, but the higher earners, who ac- Creation“. This commitment is even anchored in tually represent the largest single group of cus- our church constitution. One practical example tomers in Aldi branches. Aldi appeals to all, also of this kind of commitment is when consumers selling better value products at unbelievably low tell Aldi to campaign for decent conditions in the prices. textile and clothing production. As the research fi ndings from China and In- Wilfried Neusel, donesia demonstrate, Aldi’s bargains, however, Oberkirchenrat and Head of the Department come at a high price. for “Ecumenism, Mission, Religions“ of the Evangelical Church in the Rhineland © SÜDWIND 2007 • Working conditions in Aldi‘s suppliers in China and Indonesia 5 Summary (Photo composition: Roland Müller-Heidenreich & Frank Zander) & Frank Roland Müller-Heidenreich (Photo composition: Summary his publication provides the fi rst ever exami- The nature and extent of Aldi’s T&C business Tnation of the textile and clothing (T&C) busi- were helped, on one hand, by developments in ness of the Aldi-Group, the biggest discounter in the world T&C trade and, on the other, by in- Germany and Europe. ternational structural transformation in the retail trade. To begin with, the enormous signifi cance of the market power of the T&C retailer, Aldi, and The increased competition in the international its T&C sourcing both domestically and overseas T&C trade, liberalised in 2005, has led to mul- are looked at against the background of the dis- tinational buyers exerting further price pressure count concept initiated by Aldi in grocery retail- on suppliers, at the cost of the workers. The mod- ing. ernisation and internationalisation of the retail trade within the framework of the policy of the At the heart of the publication, however, are World Trade Organisation is also having nega- the two case studies on working conditions in tive impacts on increasing numbers of workers. Aldi supplier factories in China and Indonesia, in which numerous violations against legal re- Analysis of the worldwide debate on corpora- quirements and conventions of the International tions’ voluntary global social responsibility shows Labour Organisation have been recorded. These that, in the absence of a binding regulatory violations are in part well in excess of those re- framework, this has remained ineffective. Thus, corded in research published in recent years into proposals for action include consumers’ protests the situation of sewing workers employed by against Aldi’s textile business as well as legal ini- multinationals’ T&C suppliers.