(Milan) Exploited Chinese workers, employed in Italy by an unauthorized subcontractor, made handbags and accessories for fashion house Giorgio Armani in a series of abuses by the chain supply that the in-house production company failed to properly control, Italian police said Friday.
The fashion house has denied any wrongdoing on the part of GA Operations, which produces clothing, accessories and decorative items for Giorgio Armani group brands.
The company has always implemented control and prevention measures to minimize abuses in the supply chain, Armani assured in a press release. “GA Operations will collaborate in the greatest transparency with the competent bodies in order to clarify its position on the issue,” it was added.
According to police, GA Operations hired a subcontractor who, in turn, hired unauthorized Chinese subcontractors who employed undeclared workers, some of whom were in Italy illegally. They allegedly failed to comply with health and safety regulations and rules governing working hours, breaks and days off.
Police said it was a system of “caporalato,” the illegal intermediation and exploitation of workers most often associated with the agricultural sector. Four Chinese factory owners face separate criminal investigation for their roles.
GA Operations, for its part, is not under investigation, but has been placed under judicial administration for a period of up to a year, as part of a procedure aimed at ensuring the legality of the operations , said Carabinieri Lieutenant-Colonel Loris Baldassarre.
A diagram released by police indicates the Chinese subcontractor was paid 93 euros ($137) for a handbag that the fashion house sold for about 1,800 euros (about $2,650). The authorized subcontractor, acting as an intermediary, but without real production capacity, was paid 250 euros ($368) for the same bag, pocketing 157 euros ($231) for each bag, police detailed.
“The system maximizes profits by reducing labor costs by using clandestine and illegal workers,” police said in a statement.
A video released by the carabinieri shows a leather goods workshop, with two beds and blankets in an adjacent office. A second-floor dormitory, accessed by a chain-link staircase, has a set of bunk beds and another bed strewn with clothes and blankets.
Pots and pans were stacked in a filthy bathroom, next to a broken sink and a pot of water. A makeshift kitchen included a gas burner next to a food-splattered wall. Dirty dishes and uneaten food were piled on the sink. Cardboards had been stuck on the windows.
The discovery is part of a wider investigation into the fashion supply chain operating in the provinces of Milan and Bergamo, which has placed bag and accessories maker Alviero Martini Spa into administration in January, Mr. Baldassarre said.
In the most recent case, police investigated four factories operating illegally and offering unhealthy working conditions and a series of safety violations, including illegal dormitories with “sanitary and hygienic conditions below the ethical minimum.” .
The factories were ordered to close and the four Chinese owners, who are the subject of a separate criminal investigation, were ordered to pay fines and administrative sanctions totaling 145,000 euros ($213,000) .