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Italy probes Tod's executives over labour exploitation / Photo: Gabriel BOUYS - AFP/File
NYSE - LSE
Italy probes Tod's executives over labour exploitation
Italian prosecutors are investigating three executives from luxury fashion label Tod's, as well as the company itself, for alleged labour exploitation, according to a court document seen Thursday by AFP.
Milan Prosecutor Paolo Storari had previously requested a six-month ban on the company's advertising, with Judge Domenico Santoro fixing a December 3 hearing on the matter, according to his decree dated November 14, viewed by AFP.
The prosecutor's office alleges that Tod's -- best known for its trendy leather moccasins -- acted in "full awareness" of the exploitation of Chinese subcontractors, with violations in working hours, wages, hygiene and safety, as well as "degrading" housing.
The company, according to prosecutors, was "devoid of organisational models" to prevent the exploitation of sub-contracted workers, read the court document.
"In particular, it outsourced the audit service to suppliers and then failed to minimally take into account the results of these inspections, which noted numerous indicators of exploitation," it said.
The Tod's executives under investigation are responsible for operations, supply chain issues and compliance.
The executives allegedly exploited 53 workers, most of them Chinese, working for six different subcontractors of Tod's, the document showed.
In the prosecutors' October 29 request for the court to suspend Tod's advertising, they alleged that "the illicit system described has generated enormous profits thanks to the exploitation of (severely underpaid) Chinese labour and was made possible by serious organisational deficiencies".
The 144-page court document includes accusations by a Chinese worker at one subcontractor that his boss beat him with his fists and a long plastic and aluminium tube when he confronted him about 10,000 euros (around $11,500) in unpaid back wages.
Despite a contract for four hours of work a day, the worker said he worked from 9 in the morning until 10 o'clock at night, with two half-hour breaks for lunch and dinner and no days off.
- Beyond negligence -
The investigation revealed "a phenomenon where two worlds... that of luxury on the one hand and that of Chinese laboratories on the other, come together for a single objective: cost reduction and profit maximisation through avoidance of labour law regulations", read the document.
Prosecutors said the shoemaker's "organisational deficiencies and the lack of controls" went beyond negligence, describing it as a "malicious" attitude.
They had previously asked for Tod's to be temporarily placed under court administration for failing to carry out checks in the chain of production.
In a statement Thursday, Tod's said Italy's top court had rejected that request on Wednesday. It did not give details, but media reports say the request for judicial administration has been held up by a dispute over legal jurisdiction.
"Regarding the new allegations concerning the same matter, the company is now reviewing, with the same composure, the additional material, produced with worrying timing, by Dr. Storari," the company added.
Tod's founder and chairman Diego Della Valle is one of Italy's wealthiest individuals. He defended his company last month, telling reporters that Tod's was respected around the world and upheld "ethical values".
He also warned that such investigations risked damaging "Made in Italy" brands.
Several high-end labels have been placed under judicial administration in Italy amid investigations about the treatment of sub-contracted workers, most recently luxury brand Loro Piana.
L.Gallo--INP
