Australian surf brand Rip Curl got itself caught up in a case of major compliance concern when a report exposed the retailer for making some of its clothing in North Korea and shipping the goods with “Made in China” labels.
An article in the Sydney Morning Herald Sunday said Rip Curl sold millions of dollars worth of clothing made in the socialist state where workers toil under “slave-like” conditions.
Fairfax Media, one of the largest media companies in Australia and New Zealand, which owns the Sydney Morning Herald, conducted an investigation and found that workers at the Taedonggang Clothing Factory near Pyongyang were contracted to make some of Rip Curl’s ski wear for winter 2015.
“The clothes were shipped to retail outlets and sold with a ‘made in China’ logo on them in a practice unions and non-governmental organizations say is likely to involve other large Australian clothing brands,” the Herald reported.
Rip Curl reportedly blamed the occurrence on one of its subcontractors.
When Fairfax sent Rip Curl photos of its goods being made in North Korea, the company’s chief financial officer Tony Roberts released a statement saying it only became aware of the issue post-production.
“This was a case of a supplier diverting part of their production order to an unauthorized subcontractor, with the production done from an unauthorized factory, in an unauthorized country, without our knowledge or consent, in clear breach of our supplier terms and policies,” the Herald reported Roberts as saying.
Rip Curl issued a statement Sunday saying it takes full responsibility for this “screw up.”
“We are very sorry that Rip Curl has breached the trust our customers put in us to make sure that the products they wear cause them no moral concern,” the statement said. “That’s our responsibility to you and we have let you down on this one.”
The brand said it was “made aware” of the North Korea contracting some months ago and started taking steps to rectify the situation right away. But some of the goods did “slip through” to consumers.
“All of our suppliers know that our terms of trade prevent them diverting production to non-certified factories and we do undertake factory inspections and audits to try to prevent this happening. In this case we took immediate action to discipline the supplier for his breach and we are increasing our inspections and audits,” the company said. “Regardless of this, two styles totaling 4,000 units of Rip Curl ski wear did slip through and was shipped to customers.”
North Korea has been notorious for extremely poor labor conditions, with workers at times subject to long hours with little or even no pay, and facing imprisonment in work camps for not obeying orders.
Human Rights Watch published a report last month that said forced labor in North Korea is common even outside of political prison camps. “People suspected of involvement in unauthorized trading schemes involving non-controversial goods are usually sent to work in forced labor brigades (rodong danryeondae, literally labor training centers) or jipkyulso (collection centers), which are criminal penitentiaries where forced labor is required and where many women are victims of sexual abuse,” the report noted. “Harsh and dangerous working conditions in those facilities purportedly result in significant numbers of injuries.”
Rip Curl said in its statement, “We don’t like the abuse of people in their jobs in any country either and apologize wholeheartedly for letting this happen in the first place.”
But the “we didn’t know” claim from the company may resonate little with consumers who now expect brands to be both responsible for, and aware of, any and all occurrences in the supply chain—especially where labor violations are concerned.
Australia’s Oxfam, a global workers’ rights organization, has called on the surfwear company to publish the exact names and locations of its supplier factories to promote greater transparency moving forward—a trend many other retailers have started to adopt of late.