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Industry rejects responsibility for workers' -

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Reporter: Simon Lauder

ELEANOR HALL: As Australia's clothing industry struggles to survive in the harsh economic
conditions; it is now also dealing with some uncomfortable moral questions.

The charity group Oxfam says Australian companies may be sourcing their products from sweatshops
and need to ask a lot more of their foreign suppliers when it comes to labour rights.

It has singled out Pacific Brands which recently announced that it would cut 1850 jobs in

But the textile industry group has hit back as Simon Lauder reports.

SIMON LAUDER: In a report on 26 Hong Kong based suppliers and clothing companies, Oxfam rates how
open and clear the companies are in reporting on the wages and conditions of their workers.

Oxfam's labour rights campaigner, Tim Connor, says more and more Australian firms are outsourcing
work to companies such as 'Li and Fung'.

TIM CONNOR: 'Li and Fung' don't own any factories either, so companies like Pacific Brands and Just
Jeans contract their production to 'Li and Fung' and then 'Li and Fung' has a network of 10,000
factory suppliers around the world that they don't own but they then further contract the
production out.

SIMON LAUDER: Dr Connor says he would classify nearly all clothing factories in the developing
world as 'sweatshops', so his report doesn't bother scrutinising working conditions, merely the
level of transparency.

TIM CONNOR: They're not releasing the addresses of their factories. They claim to be monitoring
factory conditions but they're not providing evidence of that by releasing the reports and they're
not allowing independent organisations in to verify that 'Li and Fung' report.

SIMON LAUDER: If you don't, for example, know how much the workers are earning, how can you say
with certainty that they are sweatshops?

TIM CONNOR: Well we can say with certainty because there's been a huge amount of research done into
factories. I've been working on this issue full-time for 15 years and it's extraordinarily
difficult to find a factory where workers are paid a living wage and where their basic rights are

SIMON LAUDER: The Oxfam report singles out Pacific Brands for contracting some of its work out to
'Li and Fung'. Pacific Brands recently announced 1850 job cuts in Australia, as it moves more
manufacturing to China. Last night the company's chief executive, Sue Morphett, told Channel Nine
the move will make the company more solid and more flexible.

SUE MORPHETT: And one of the things that we cannot afford is the luxury of local manufacturing.

SIMON LAUDER: This morning Pacific Brands has put out a statement, defending its record on
protecting working conditions overseas.

The statement says: "Pacific Brands insists on high standards and goes to great lengths to ensure
compliance and continuous improvement through external auditing... We have sacked numerous
suppliers for failure to comply with our standards or failure to work towards attaining them."

Oxfam says Australian companies shouldn't have to rely on external auditing, instead it says they
should pressure their foreign suppliers to be much more transparent about working conditions.

The coordinator with FairWear Victoria, Liz Thompson, says it's the only way standards will

LIZ THOMPSON: We want those same kind of standards to apply in Pac. Brands factories in China as
they do in Australia. I think that's reasonable.

SIMON LAUDER: But why should it be up to Australian retailers to police that?

LIZ THOMPSON: Because they're the ones making the profit out of it at the end.

SIMON LAUDER: The industry group, Textile and Fashion Industries Australia, says it shouldn't be up
to Australian companies to police work conditions overseas.

Executive director Jo Kellock:

JO KELLOCK: What has to happen is there needs to be time for those countries to catch up and so I
notice that a lot of the firms have been targeted but I think it's a bit unfair - they're easy

SIMON LAUDER: Don't the companies though make a conscious decision to go into business in countries
where there is a lack of regulation, thereby opening themselves up to the risk of exploiting

JO KELLOCK: Well I think there's always; it's not a perfect world and you're mindful of those
things and I think most people try to do the right thing. But once again as is done in Australia
there are regulations, award conditions around that protect Australian workers.

So I don't think it's fair then to turn around and say in other countries that Australian
businesses should be responsible for those same regulations when it's clearly a role for

ELEANOR HALL: Jo Kellock is the executive director of the Textile and fashion Industry Group. She
was speaking to Simon Lauder.