Indian vendor loses 50% of its Gap orders

Indian vendor loses 50% of its Gap orders

San Francisco: Gap Inc. is pulling 50% of its orders placed with a vendor whose subcontracting led to children sewing some of the retailer’s clothes in squalid conditions in India.

The penalties wrapped up the San Francisco-based company’s investigation into an embarrassing episode that attracted headlines around the world and renewed concerns about abusive labour practices in overseas factories.

To help address the problem, Gap said it would make a $200,000 (Rs78.6 lakh) grant aimed at improving the working conditions in India and would try to recruit retailers from around the world to participate in a forum next year to address child labour issues.

“We are determined to see some good come of this situation," Gap spokesman Bill Chandler said on Wednesday.

Gap said it would also partner with the Global March Against Child Labour and other organizations to provide independent monitoring of hand embroidery and beadwork that is typically done in informal settings, not factories. Grants would help establish community centres in India where such work could be performed under better-monitored conditions.

The child labour concerns surfaced last month after the Observer newspaper in London reported children as young as 10 had been sold by their families to an Indian sweatshop. The children said they were sometimes hit with a rubber pipe and forced to work up to 16 hours a day sewing clothes, some of which were destined for Gap’s shelves.

After the report was published, Gap terminated its ties with the subcontractor responsible for the sweatshop and promised none of the clothes made there would be sold in its stores. But Gap didn’t take any immediate action against the supplier that hired the subcontractor in violation of the company’s policies.

Gap’s internal investigation concluded that at least one child was seen working on its product in an unauthorized factory in New Delhi.

“What happened here was without the knowledge or approval of Gap Inc. or, we believe, of the vendor," the company said in a summary of its investigation’s findings. “Nonetheless, we hold ourselves and our vendor fully accountable."

To punish the vendor, Gap imposed a six-month probation that includes a 50% reduction in orders placed with the supplier.

Gap declined to identify the penalized supplier, one of the company’s roughly 200 vendors in India.

Last year, Gap stopped working with 23 factories that didn’t live up to the company’s standards.