INDISKA

- to spice up Sweden and Europe with color, happiness and warmth

Saturday 29 May 2010, by Ingrid Ueland, Michelle Strohle, Romain Ader Duclaud, Sampsa Aerikkala

6 inspired

a)The main facts about the activities of the company.

Earlier projects Indiska has engaged in:
1996: Started a common project in cooperation with Peace Trust with the goal of achieving orderly schooling and improved development opportunities for children in the immediate surroundings. They supplied 100 former child workers with food, uniforms, and other equipment necessary in order to start school. The affected parents also received compensation for the lost earnings of their children when they started school.

The ?peace trust?program that Indiska is supporting, are social projects in India. They support economically and knowledgeable projects like the Peace trust vacation school (started in 2000), women?s group (2002) and student hostels for girls (2003). The goal is to create conditions for genuine development. They collect money to these projects through chosen products that they sell. The women?s group consists of 80 women with families who live under the subsistence level, who get to make postcards, bags and other small items after the patterns of Indiska?s designers, and sell them in the stores of Indiska. The goal of this project is to create job opportunities, and also job experience to open up for selling in the local market.

The student hostel for girls is created to enable girls who live far away to go to the vacation school, and to provide them with food and shelter. It was financed by the employees of Indiska giving up their Christmas presents.
They also support a water project, where they aim to guide poor farmers and agricultural workers in the Tamil Nadu area how to use natural resources, mainly how to gather and preserve water in an effective way. This may prevent many people to leave their homeland. They make their trade partners sign an eco-guarantee which says that they will only buy the products if they don?t excess a given limit of listed chemicals/compounds in the textiles. They support Animal rights, and therefore don?t sell any fur, either as clothing or as accessories.

b)The ethical challenges this company is adressing.

The Code of Conduct is something really important for INDISKA. Because of that, the company has decided that this Code of Conduct must be signed by all of the main suplliers. Concequently, this drive to trensparency and fairly business, in fact INDISKA wants to show that they don’t have anything to hide from their activities.?
Because INDISKA’s offices are based in Europe but also in INDIA, and because laws and habits are different all over the world, the Code of Conduct is ajusted to match with every cultures and labor laws.
The main goal of this Code is firstly to find and define the problem, if there is one, and then, solve it fairly.?

As we said before, another ethical challenge of INDISKA is the support of many different projects within Peace Trust in India and this, since several years.

Another challenge that INDISKA is addressing is the development of an organic collection. Indeed, the brand is nowadays using organic cotton for example which is grown, cleaned, spun, dyed and sewn in India according to the labor laws and in a way to protect the environment. INDISKA is selling, according to its ethic, only fair-trade and environment respectful products.?
Concerning the quality and the product responsibility, INDISKA also have its ethical challenges. Indeed, for the brand, the quality of the products is an important part of the purchasing. INDISKA do its best to improve as often as possible the quality and the safety of every products. Whatever they are clothes or accessories, every product pass through tests for shrinking, color retention, dry residue and twesting. Products unsafe or unhealthy are removed from sale immediately. In the same time, INDISKA ensure that dangerous chemical products like Nickel, Chrome VI or Lead & Cadmium are not used.
According to ethical targets, these are other challenges which can be highlight. Firstly, the work for the environment is everyday improved. Then, the brand always keep an eye on the fact that every employee’s pension and sick leave is paid, and also the minimum wage. For INDISKA, the water available in the factories or offices must be filtered and the toilets for men and women has to be separated.

To?conclude?with?this?part,?we?can?say?that?INDISKA?is?adressing?many?ethical?challenges,?but?the main ones are the quality of the products, the fact that they don’t represent any danger for anybody and to finish, the respect of the environment and the labor laws.

c) What makes you believe this company is really ethical and why you trust it.

Indiska has something called a ?code of conduct? which is a part of their condition of purchase. Indiska adopted this conduct 1998 as a challenge to always try to improve the circumstances for the workers. The code of conduct is based on ?ILO.s core conventions on working practices and rights in the working life, and on the UN.s Convention on the Rights of the Child. Which means that they work against things as child labor, concerning about the environment of the industries, the salaries and also against forced labor.?
?This code has to be signed by every partner that Indiska is cooperating with and it’s an important mile stone but it doesn’t mean that every company follows the conduct.? In order to have long lasting cooperation with Indiskas supplier’s communication is very important and they often have contact to reassure that the code and what it’s entitle is followed.? The main importance with the code of conduct is to see to the relevant problems that might exist in a fabric and try to change them. It’s not a change that will come over a night them say, but it’s a start of a long journey which is of great importance. Indiska is also trying to refer to India’s own labor laws and work with them rather than against them. The labor laws are good and Indiska has specifically demanded that the countries own labor laws are seen to. This code of conduct is an ethical stand point because it shows that they want to act as fair as possible and that they are concerned about their workers. ?

To ensure that the ethics of the company is followed as well as the code of conduct Indiska has one person that is mainly hired.? They also have specialized personnel that are hired to visit the industries and look how the products are being made and to ensure that the working conditions are after the code of conduct. Indiska is very strict on the policy and are engaged in fair working conditions for everyone hence the special hired personnel.?

To ensure that the working areas are ethical and that the company is taking care of its employees there is an employee that travels around with a special ?safety bag? which contains different safety equipments that is necessary in order to prevent different health consequences.? Having a single handed out person whose job is to ensure the safety on the working field is very ethical of a company to do especially since they have their factories in a country where the competition is very high and you can easily put your manufacturing to another industry which will produce the items for a much lower cost. But that is not the main character of the company. They exist in order to help poor people in India and want them to have as good working conditions as us in the west, as good as possible so to say. There are not many companies that have the ethics in mind while also trying to reach profit because without profit you can’t afford to have the company up and running. So to say that Indiska only has the ethical perspective in mind where to be lying but to say that they care equal is more likely the truth. Do to the fact that Indiskas brand is built on this concept; that for each clothing you by or for each teabag you purchase a special amount is going back to the workers directly or indirectly, they are/trying to be ethical.

Another very ethical and good thing they do in order to get some good PR for the company as well as keeping their workers alive is to inform about HIV/AIDS. Indiska says that very many people in their production countries is affected with HIV/AIDS and therefore asks the countries national health authorities to put up information in the industries toilets in order to try to prevent the illness from spreading. This might seem as a little thing to do but for each person that the information reaches you just might have saved a life. Will this benefit the company, Indiska? Maybe not directly in order of input but since it brings good PR it will benefit them indirectly with higher revenues. ?
So after receiving all this information about Indiska and also the fact that some of us have been a customer of them for a couple of years they have proven themselves to be trustworthy.? But for all information you might come over how can you know that this is the truth? Who wrote this and why should we trust that it is the truth? But for now Indiska has convinced us of their ethics and we can only hope that the morals and ethics are as applied in real life as in their homepage.?

d) The possible challenges facing Indiska in the future and how we think this company may improve

Considering Indiska’s strict policy on ethical issues and control of the supply chain, expanding to second tier suppliers as well, it must be kept in mind that its core business strategy is to produce as cheap as possible enabling them to sell as cheap as possible. For a company that has positioned itself in the price competition segment of the industry, the role of pioneer of ethical business doesn’t fit perfectly and will sure raise questions.

Indiska informs that they don’t have any factories of their own, but are buying from 130 different suppliers in Asia and Europe. Even though they have one person to control and inspect these suppliers’ facilities and working conditions in them, it is fairly obvious that it’s not enough for a supply chain that vast. The following statement by Indiska is a good indicator of that: ?We have so far done nearly 400 new visits and follow-ups with our main suppliers and with many sub-contractors and home workers over the last five-year period.? So Indiska clearly has to increase the amount of controller’s or create a more effective system for controlling its ethical policy.

A company that uses low prices as its competing strategy has to streamline its supply chain to be profitable, and Indiska has outsourced all of its production and is sure to try to reduce costs by tendering the suppliers. This will obviously create cost pressures on the suppliers that could result in the deterioration of working conditions or slipping from ethical codes. For example can Indiska honestly say that its products are environmentally friendly, when it is not controlling the waste management in e.g. India, where recycling and waste management practices are very different to the ones in the western world? Even though its suppliers would follow the local environmental rules it doesn’t mean the practices are according to the idea of ecological practice in the countries the products are sold. Indiska should see to what extent the ecological practices in India comply with the western world’s practices and codes and then possibly aid the system in India to improve or find a way to manage their waste in a genuinely ecological way.

Indiska will eventually encounter the same situation than other companies outsourcing to third world countries for lower labour costs, the tipping point of cost versus quality after the wage level in these countries rise. As the living conditions and social norms are unlikely to change at the same time, the problems that Indiska now offers help for will be present even after the wage levels have risen. At this point Indiska will have to decide whether to move its production to some country where wage level is still so low that it is highly profitable to transport the goods from there, or stay in e.g. India and continue the ethical work there with slightly smaller profit margin. These issues will eventually show Indiska’s true colours in ethical business, whether it truly found a way to cut costs ethically and improve conditions or did it just find a good PR strategy to shine its image and divert the attention from typical low cost outsourcing.

Bibliography

http://www.wikipedia.se www.wikipedia.se
http://www.indiska.se www.indiska.se
http://www.google.se www.google.se

Location: Stockholm (Sweden)

Sector: clothing and interior design

Official website: http://www.indiska.se

Key figures:

Number of Employees- around 800
Countries of operations -? Sweden, Norway, Denmark and Finland

Nbr. visits: 2358

Nbr. inspires: 6