Iconic New Zealand merino clothing brand Icebreaker was sold to a company with a less-than-squeaky-clean history around worker conditions.
Icebreaker's new owner, Pennsylvania-based VF Corp, whose brands include The North Face, Timberland, SmartWool, Vans, Wrangler and Lee, has been caught up in several cases of bad worker treatment in Asian factories producing its clothes over the last three years, write Jonathan Underhill and Nikki Mandow for Newsroom.
In one incident reported by the Guardian newspaper in 2017, 360 Cambodian women collapsed in a Cambodian factory supplying to VF Corp, Nike, Puma and Asics. An investigation found the women worked 10 hours a day, six days a week, in temperatures of 37C and with inadequate food.
Another report showed more than 500 workers were hospitalised over a 12-month period in four Cambodian garment factories used by VF Corp.
At the time, VF Corp, which works with around 1000 supplier factories internationally, said that it worked hard "to make certain that working conditions in our contract supplier factories, including temperature or working breaks, are followed per local laws and regulations". The Guardian report made no mention of any pro-active attempts by VF Corp to go beyond legal requirements in these countries.
Icebreaker has put significant efforts over the last year into improving its own supply chain practices. The 2018 Ethical Fashion Report, which grades 407 local and international fashion brands, gave Icebreaker its "most improved retail brand" award, after its grade jumped from D- last year to A+. The findings are based on four categories: human rights policies; traceability and transparency through the supply chain; whether supplier factories are audited; and worker empowerment, including living wages, access to unions and a functioning grievance mechanism.
While Icebreaker achieved an A or A+ across all for categories in the 2018 report, VF Corp got a B overall, and that grade was mainly because it scored highly for policy. Less impressive were its grades for auditing (C) and for worker empowerment (D+).
This damning information on VF Corp came out in the NZ Overseas Investment Office report into the $288 million Icebreaker-VF Corp sale, obtained under the Official Information Act.
The report also revealed VF Corp has been party to at least 29 civil lawsuits in the US. However the Overseas Investment Office concluded these were not a reason to turn down the sale of Icebreaker to VF Corp. Rather they were a normal part of doing business and don't reflect badly on the company, the OIO said. The sale was approved in February.
Icebreaker's shareholders, including founder Jeremy Moon, had sought a tie-up with "an established international entity or group for global market access, logistics and management opportunities" to "fully realise Icebreaker's growth potential". They picked VFC as its preferred buyer after a competitive tender process, a summary of the decision said.