Italy probes Armani and Dior for labour rights breaches in supply chain
Italy’s competition watchdog is investigating Italian fashion house Armani and France’s Dior for using suppliers that allegedly exploited their workers. The AGCM said the companies are accused of unfair commercial practices, using suppliers that failed to pay adequate wages and imposed excessive work hours that breached legal limits on their workers, operating in inadequate health and safety conditions.
The regulator questioned the companies’ statements about their ethics and corporate social responsibility, and their emphasis on craftsmanship and quality from suppliers accused of exploiting their workers.
It follows earlier investigations by Italy’s Public Prosecutor’s Office, which uncovered evidence of human rights breaches at contractors used by the fashion houses. A court in Milan placed Giorgio Armani Operations and Manufacturers Dior under a year-long judicial administration order for due diligence failures.
The AGCM’s probe covers Armani companies Giorgio Armani SpA and G A Operations SpA, as well as proceedings against some companies in the Dior Group – Christian Dior Couture, Christian Dior Italia and Manufactures Dior – for potential violations of the Consumer Code in the promotion and sale of its clothes and accessories.
Supported by Italy’s financial police, inspections were carried out at the headquarters of both companies in Italy.
Dior said it has suspended orders with two manufacturers brought into question by the probe.
“The house of Dior firmly condemns these unworthy acts, which contradict its values and the code of conduct signed by these suppliers. They do not reflect the reality of the work of its artisans and the long-lasting links which exist with Italy,” it said.
“No new orders will be made in the future with these suppliers. The Dior teams are working intensely on ongoing reinforcements of the existing procedures. Despite regular audits, these two suppliers had evidently succeeded in hiding these practices,” Dior added.
Armani issued a statement that it is co-operating with authorities, adding that it does not believe the allegations have merit.
“The Armani Group acknowledges the opening of an investigation for alleged unfair commercial practices related to our institutional communication in the field of corporate social responsibility. The companies involved are fully committed to cooperate with the authorities, believe that the allegations have no merit, and are confident of a positive result following the investigation,” Armani said.
