LONDON (Thomson Reuters Foundation) - British budget fashion chain Primark said on Wednesday it was constantly on the watch for any slavery in its supply chain while dismissing the idea that low cost meant exploitation.

Paul Lister head of Primark's ethical trading team, talks at the Trust Women Conference, in London, Britain November 30, 2016. Nicky Milne/Thomson Reuters Foundation via REUTERS

Paul Lister, head of Primark’s ethical trading team, said the retailer known for cheap, high turnover fashion kept its costs down by not spending on advertising and buying in bulk to achieve economies of scale.

After years of facing accusations of using “sweatshops” employing “slave labor” to produce T-shirts for just three pounds ($4), Primark has this year started to talk publicly about what it is doing to ensure its supply chain is ethical.

Lister said Primark’s business model was designed to produce low cost goods but he acknowledged the garment supply chain was complicated and the retailer was always looking to spot any issues.

“It is about constantly being vigilant, constantly being out there and knowing what to look for and being forensic,” Lister told Trust Women, an annual human trafficking and women’s rights conference organized by the Thomson Reuters Foundation.

The United Nations’ International Labour Organization estimates there are 21 million victims of forced labor globally, with 56 percent in the Asia-Pacific region that is home to many clothes factories used by international brands.

Lister said by starting with its stores and going backwards in the production chain, it was easy for Primark to be confident of what was going on in the 1,700 supplier factories it uses globally to stock its 290 stores in Britain, Europe and the United States.

COMPLICATED CHAIN

But he said it started to get trickier to monitor ethical practices moving down the chain to Tier 2 factories producing such items as buttons, zips and fasteners and to Tier 3 factories such as dye houses.

"The further down the supply chain you go the more complicated it gets," said Lister, who joined Primark's parent company Associated British Foods ABF.L in 2001.

He said Primark conducted independent, unannounced audits on all factories every year - and had doubled checks on the 100 or so factories it uses in Turkey this year, aware of the possible exploitation of Syrian migrants in the workforce there.

Primark had also set up a whistleblower hotline for workers and held workers’ discussion groups on topics like health that also led to staff talking frankly about working conditions.

“We look to find and we will find and when we find we know what to do because we are not scared,” said Lister, adding that it was important for retailers and NGOs to work together to combat slavery and work exploitation.

“Turkey is a particular focus and we have changed the way we operate to deal with the devastating circumstances there.”

Lister said it was hard to know where cotton came from so Primark started projects in the cotton fields of Gujarat in western India in 2013 in an sustainable farming initiative known as Cotton Connect that recruits female smallholder farmers.

“We have now expanded to 10,000 farmers in India producing cotton,” said Lister.

Lister stressed it was important to see the benefits of employment in the developing world, with the factories used by Primark employing about 750,000 people which impacted 2.4 million people, factoring in families of workers.

Quizzed about how Primark could sell men’s jackets for 18 pounds without slavery in its supply chain, Lister said the key was the retailer’s business model.

“We don’t have fancy branding, we don’t have fancy advertising, all of which adds to the price of the clothes that you buy,” he said.

($1 = 0.8027 pounds)