Peru: Loro Piana under fire for lack of oversight re. wage payments towards indigenous communities supplying Vicuña wool
"Loro Piana told Peru officials in April it doesn’t verify Vicuña worker pay". 22 December 2024
A Loro Piana executive acknowledged to government officials that the luxury apparel brand doesn’t know whether some indigenous Peruvians are compensated for providing the company with the fiber used to make $9,000 sweaters.
The Italian company came under fire...following a Bloomberg Businessweek report that showed that indigenous Peruvians supplying Loro Piana sometimes didn’t get paid for their work chasing and corralling vicuñas...Critics have called it “exploitation,” while Loro Piana says it pays local communities who then determine how they distribute payments...
“It’s been said that we don’t pay the people who do the chaccus,” said Eliphas Coeli, general manager of Loro Piana in Peru...
“Well, I don’t know how other companies work, but we buy the fiber and deposit the payment for the value of the fiber” to a bank account, he said. “And then the distribution of that payment is beyond our control,” he added in reference to indigenous communities and what they do with the money later.
Loro Piana said in a statement that it had increased supplier audits to ensure compliance and is working with local NGOs to benefit as much as 15 communities involved with the vicuña with projects on infrastructure, health care, nutrition and education...
“Over the past 30 years, the maison has fully complied with Peruvian law, ethics and the labor regimes of local communities recognized by the Constitution and their legitimate practices...which takes place over one day every year.”..
Loro Piana — a subsidiary of Bernard Arnault’s LVMH...is the world’s top buyer of raw vicuña fiber and the top seller of garments made out of vicuña wool...The company’s CEO, Damien Bertrand, told the Financial Times in October that it had “officially refuted” Businessweek’s story, without providing details...
Coeli’s remarks prompted a response from Enrique Michaud, who at the time was the government’s top official in charge of regulating wildlife, which includes vicuñas....
“... it is correct that this is a private contract signed with a community and the community takes care of redistribution” of earnings, Michaud said. “However, we must think of mechanisms to ensure that there is a correct distribution of benefits.”
LVMH’s own code of conduct for suppliers mandates that organizations providing it with materials pay wages “sufficient to meet the workers’ basic needs and provide some discretionary income.” Loro Piana said it had “launched a supplier awareness campaign to further enforce our Code of Conduct.”
Coeli directly addressed the code of conduct in the discussion, saying Peruvian suppliers do sign it...