Italy investigates Tod’s executives for ‘labor exploitation’

The Italian public prosecutor’s office is investigating three executives of the Italian luxury fashion house Tod’s and the company for alleged exploitation of workers. This emerges from a court document that was available to the AFP news agency on Thursday.

The Milan public prosecutor Paolo Storari had previously requested a six-month advertising ban for the company. Judge Domenico Santoro scheduled a hearing on the matter for December 3, according to his November 14 decree seen by AFP.

The public prosecutor’s office accuses Tod’s of having acted with “full knowledge” of the exploitation by Chinese subcontractors. The company is best known for its trendy leather moccasins. The allegations include violations of working hours, wages, hygiene and safety as well as “inhumane” accommodation.

Prosecutors said the company lacked “organizational models” to prevent labor exploitation among subcontractors, according to the court document.

“In particular, it outsourced the audit service to suppliers and subsequently failed to take even minimal account of the results of those inspections,” it continued. These reports showed numerous indicators of exploitation.

The Tod’s executives examined are responsible for operations, supply chain issues and compliance. They are said to have exploited 53 workers. Most of them are of Chinese origin and worked for six different Tod’s subcontractors, the document shows.

In their Oct. 29 request for the court to suspend Tod’s advertising, prosecutors made serious allegations. They claimed that “the described illegal system generated enormous profits thanks to the exploitation of (severely underpaid) Chinese workers.” This was made possible by serious organizational deficiencies.

The 144-page court document contains allegations from a Chinese subcontractor worker. He stated that his boss beat him with his fists and a long pipe made of plastic and aluminum. This happened when he confronted him about outstanding wages of 10,000 euros. Despite a contract for four hours of work per day, the worker said he worked from 9 a.m. to 10 p.m. He had two half-hour breaks for lunch and dinner and no days off.

Beyond negligence

The investigation revealed “a phenomenon in which two worlds… that of luxury on the one hand and that of Chinese workshops on the other, come together for a single goal.” This goal is to reduce costs and maximize profits by circumventing labor regulations, the document said.

Prosecutors said the shoe maker’s “organizational deficiencies and lack of controls” went beyond mere negligence. They described the attitude as “malicious.”

They had previously requested that Tod’s be temporarily placed under court administration. The reason was the failure to carry out controls in the production chain.

In a statement on Thursday, Tod’s said that Italy’s highest court rejected that request on Wednesday. No details were given. However, according to media reports, the application for judicial administration was held up by a dispute over jurisdiction.

“With regard to the new allegations in the same matter, the company is now reviewing the additional material with the same composure,” the company added. This was presented by public prosecutor Storari “with worrying timing”.

Tod’s founder Diego Della Valle is one of the wealthiest people in Italy. He defended his company last month. He told reporters that Tod’s is respected worldwide and upholds “ethical values.” He also warned that such investigations could harm “Made in Italy” brands.

Several high-end labels have been placed under judicial administration in Italy amid investigations into the treatment of workers at subcontractors. Most recently this affected the luxury brand Loro Piana.(AFP)