2 Wyco is a leading international retailer selling clothing and accessories, with stores throughout the world. The countries from which it sources its products include Sri Lanka, Bangladesh, India and Vietnam. It was shocked when a British newspaper reported that an unauthorised subcontractor had used child workers to make some of its products at a factory in Delhi. In response Wyco immediately issued a statement.

‘Earlier this week, the company was informed about an allegation of child labour at a facility in India that was working on one product for Wyco. An investigation was immediately launched. The company noted that a very small portion of a particular order placed with one of its vendors was apparently subcontracted to an unauthorised subcontractor without the company’s knowledge or approval. This is in direct violation of the company’s agreement with the vendor under its Code of Vendor Conduct’.

Wyco’s CEO said, ‘We strictly prohibit the use of child labour. This is a non-negotiable for us. Wyco has a history of addressing challenges like this head-on. Wyco ceased business with 20 factories due to code violations. We have 90 people located around the world whose job is to ensure compliance with our Code of Vendor Conduct. As soon as we were alerted, we stopped the work order and prevented the product from being sold in stores. While such violations are extremely rare, we have called an urgent meeting with our suppliers to reinforce our policies. Wyco has one of the industry’s most comprehensive programmes in place to fight for workers’ rights. We will continue to work with stakeholder organisations in an effort to end the use of child labour’.

(a) ‘Being an ethical company isn’t enough any more. These days, leading brands are judged by the company they keep’. What does this mean for Wyco?

(b) When Wyco found itself with this supply chain problem, did it respond in the right way?