The Estonian textile factory Krenholm, located in Narva, has put a stop to its purchases from Uzbekistan following suspicions of the use of child labour, reported Martti Haarajoki, the CEO of Krenholm, on Tuesday.
On Monday, the textile and clothing design company Marimekko, one of Krenholm’s most significant Finnish customers, announced that it would stop buying cotton products from Krenholm, following Swedish reports that the factory is using cotton that comes from Uzbekistan, where child labour is being used in cotton harvesting.
Approximately one-fifth of Krenholm’s turnover comes from Finnish customers.
"Of course we do not accept the use of child labour”, commented Haarajoki.
Krenholm has asked all its international suppliers to provide it with a certificate which guarantees that their cotton has not been bought from farms using child labour.
"This problem applies to the entire cotton industry. In addition to Uzbekistan, child labour may be used in a number of other countries", said Haarajoki.
Krenholm buys its cotton on the global market, from America and Central Asia, through international suppliers. Just some eight per cent of the factory’s cotton has come from Uzbekistan.
"Cotton was bought from Uzbekistan at the current price ; it was not cheaper than elsewhere", argued Haarajoki.
Suspicions arose when a programme broadcast by Swedish Television (SVT) last weekend claimed that a number of suppliers of the Swedish clothing retailer Hennes & Mauritz may have been using cotton picked by school-age children in Uzbekistan.
The report also mentioned the Swedish-owned Krenholm factory in Estonia, which manufactures cotton products for Marimekko. Krenholm is owned by the Swedish Boras Wäfveri Group.
According to CEO Haarajoki, the use of child labour is difficult to prove in global business.
"The same applies to all companies in the textile industry who are buying cotton from international suppliers. The further a product has been processed, the more efforts are needed to prove the potential use of child labour", Haarajoki concluded.
Krenholm is an exceptional factory, as the entire processing of cotton - from the spinning of yarn to the printing of fabric - is performed at the same mill.
However, as a result of rocketing costs, the factory intends to transfer part of its production to Asia.
Nobody can guarantee that the production of raw material is 100 % ethical, say some experts who are responsible for purchases in certain Finnish trading companies.
While environmental questions are another hot topic today, the Finnish Neste Oil has become a target of protests by the environmental activist group Greenpeace.
On Monday the activists blockaded Neste Oil’s palm oil tanker in Finnish waters.
According to the organisation, the use of palm oil in fuel manufacturing increases its demand, which in turn leads to the destruction of the rain forests.
In the global economy, corporate social responsibility has become one of the top priorities for trade, while the problems relating to the monitoring of an entire production chain have been recognised.
The Finnish retailers Kesko Group and S Group are members of an European Business Social Compliance Initiative (BSCI) organisation, which hires independent auditors to inspect the fields and factories in the countries of origin across the whole supply chain.
The aim of the BSCI system is to continuously improve the social performance of suppliers, while the needs of manufacturing ethically high-quality products at low prices will have to be balanced.