It has been reported that one of Inditex’s Brazilian suppliers engaged in unauthorised subcontracting of work to a factory in Brazil. 15 workers were found to be employed illegally by a subcontractor, without Inditex’s knowledge. This action goes against Inditex’s Code of Conduct and the company has zero tolerance for infringements of this kind. Inditex Group wishes to state the following:

-This case constitutes a grave infringement of the Inditex Code of Conduct for External Manufacturers and Workshops, a code with which this supplier was contractually obligated to comply with. The Code of Conduct stipulates the requirements with which all suppliers, whether direct or subcontracted, must comply, and aims to safeguard workers’ rights to the fullest extent.

-Upon learning of the case, Inditex demanded that the supplier responsible for the fraudulent subcontracting arrangement immediately rectify the situation. The supplier has accepted full responsibility, and is paying financial compensation to the workers as required by Brazilian law and the Inditex Code of Conduct. Meanwhile, the supplier will upgrade the subcontractor’s working conditions in order to bring them into line with those at facilities audited and approved by the Inditex Group’s inspection process. Brazil’s Ministry of Labour and Employment has moved to legalise the workers’ employment status.

- Inditex, in conjunction with the Brazilian Ministry of Labour and Employment, will strengthen oversight of its production system, both at this supplier and at the other companies with which it works in Brazil, for the purpose of preventing similar cases in the future.

Inditex in Brazil has a stable supplier base of approximately 50 companies, which together account for more than 7,000 workers. The Inditex social audit system enables the company to guarantee that overall working conditions throughout Inditex’s Brazilian production chain, which manufactures several million garments each year, meet optimum standards.

Inditex annually conducts more than 1,000 audits of its suppliers worldwide to enforce compliance with its Code of Conduct. In cases in which auditors detect non-compliance issues, Corrective Action Plans are implemented. A cornerstone of this is activation of a dialogue with all agents involved in the supply chain: local and international trade unions, suppliers, business management organisations, governments, non-governmental organisations, etc.

The Inditex Group is grateful to the Brazilian Ministry of Labour and Employment for its work on this case and for its willingness to collaborate with Inditex to foster the best conditions possible in the Brazilian textile industry.