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http://www.arcandor.com

Headquarters: Essen
Country: Germany
Total points of sale in Europe: 90 Karstadt-department stores and 32 Karstadt-Sport stores, Arcandor also operates the mail order company Quelle.
Name of CEO: Dr. Thomas Middelhoff
Product description: Arcandor sells a wide range of textiles and garments  as well as other non-food products (household products, stationary goods, etc.) in its Karstadt department stores.
Producer countries: In its sustainability report, Karstadt refers to the following countries: Bangladesh, Bulgaria, China, India, Pakistan, Romania, Thailand, Turkey and Vietnam.

Arcandor
Theodor-Althoff-Straße 2
45133 Essen

Comments from the CCC and proposals for action

Although Arcandor is publishing a sustainability report every two years and does promote to work on its CSR practices many open issues remain. The CCC raises especially questions of transparency and purchasing practices. While the company is open for dialog when cases of labour rights violations at its supplier factories come up, Arcandor keeps uncooperative if questions of transparency and purchasing practices are raised.

In 2006, Arcandor outsourced all its supplying activities to the HongKong based company Li & Fung, which is known for its aggressive buying practices. The CCC criticises the outsourcing strategy as a step backwards.

The following evaluation of the company’s performance in terms of transparency, code implementation and monitoring of labour standards are based on research conducted by the CCC - Germany and on Arcandors sustainability report (2008).

Transparency

Arcandor publishes a sustainability report every two years. The recent report of 2008 gives a rough overview of CSR activities in Arcandor’s supply chain.  No details are given. So far Arcandor has refused to publish a list of supplier factories. No information is available on its purchasing practices, including pieces rates or lead-times.

Formal commitment to labour standards

For years, the company has been promoting its CSR practices. However, partners of the CCC have been reporting labour rights’ violations at Arcandors suppliers. Arcandor is a member of the Foreign Trade Association of the German Retail Trade (Außenhandelsvereinigung des Deutschen Einzelhandels e.V. = AVE). In the course of a joint project with the German Society for Technical Cooperation (GTZ, or Gesellschaft für technische Zusammenarbeit), the AVE has developed a code of conduct which was signed by Arcandor (then KarstadtQuelle). Today, Arcandor is a member of the Business Social Compliance Initiative (BSCI) and has signed the BSCI code of conduct, which refers to the core labour standards of the International Labour Organization. To date, the company has not made any proposals for how it intends to achieve coherence between its purchasing practices and its ethical trading commitments.

Code implementation and purchasing practices

The CCC is critical of the lack of transparency in BSCI procedures for code implementation. Results from social audits are not disclosed and it has not been possible to get information on prices to suppliers or lead times. In Germany only one staff member is employed to work on CSR-related issues. Arcandor being the biggest German textile and garment retailer, this is clearly insufficient.

Monitoring and Verification

The CCC is not aware of any plans for involving local trade unions and NGOs in independent verification activities.

Violations of labour rights and public conflicts

On 11 April 2005, in the industrial city of Savar, north of Bangladesh’s capital city of Dhaka, a nine-storey factory building collapsed burying hundreds of workers. The factories Spectrum Sweaters Ltd. and Shahriyar Fabrics Ltd. were using the building at the time. Like several other European garment companies, KarstadtQuelle was sourcing from these suppliers. During the months that followed, thousands of consumers wrote protest letters to the companies involved, demanding security inspections at all Bangladeshi factories as well as compensation for the victims and their families. KarstadtQuelle provided its own relief fund of 35,000 Euro at the end of 2005. Bangladeshi partner organizations of the CCC and the International Textile, Garments, Leather Workers’ Federation (Internationale Textilgewerkschaft), however, demanded that the response should go beyond one-off relief. They demanded the establishment of a fund which would support the victims according to income, the number of family members and the degree of injury. After many negotiations with the CCC, KarstadtQuelle at the end of 2006 agreed to contribute 100,000 Euro to an international relief fund. However, the fund has to this day not been set up.

Recent developments

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