UNIVERSITAS INDONESIA

Logistics and Supply Chain Management

CASE: JOE FRESH ETHICAL SOURCING

MOSES JOK SAMUEL ATEM 2306199844

Lecturer:

Ratih Dyah Kusumastuti, PhD

MASTER OF MANAGEMENT

FACULTY OF ECONOMIC AND BUSINESS

JAKARTA

2024
Case Synopsis

Joe Fresh was a Canadian fashion and lifestyle brand created by designer Joseph
Mimran as an in-store brand for Canadian food distributor Loblaw Companies
Limited (Loblaws) founded in 2006. Joe Fresh designed, produced, and sold
men’s, women’s, and children’s clothing, accessories, footwear, and cosmetics. Its
products were available in more than 300 retail locations.
Joe Fresh was sourcing from the Rana Plaza clothing factory in Bangladesh which
collapsed in 2013, killing more than 1,100 people.
Joe Fresh has faced several challenges in sourcing ethical and sustainable
products for its supply chain, including issues related to supplier compliance,
traceability, and transparency.

Identification of Issues/Problems

• The collapse of the Rana Plaza factory and the loss of over 1,100 lives.
• The ethical implications of sourcing products from factories with poor working
conditions.
• The impact of the disaster on Joe Fresh's public perception and brand image.
• The challenge of balancing competitive position, shareholder obligations, and
customer demands with ethical sourcing.
• The legal and moral obligations of companies to ensure ethical sourcing practices.

The Joe Fresh ethical sourcing case is a complex one, with a number of
interrelated problems. Some of the key problems include

• The use of child labor. In 2013, it was revealed that Joe Fresh had been
using child labor in some of its factories in Bangladesh. This was a major public
relations disaster for the company, and it led to calls for a boycott of Joe Fresh
products.
 • Unsafe working conditions. In addition to child labor, Joe Fresh factories
have also been cited for a number of other safety violations, including locked fire
exits and combustible materials stored near heat sources. These violations have
led to a number of injuries and deaths of workers.

• Low wages. Workers in Joe Fresh factories are often paid very low wages,
which can make it difficult for them to meet their basic needs. This can lead to
poverty, hunger, and malnutrition.

• Forced labor. There have also been reports of forced labor in Joe Fresh
factories. This means that workers are required to work against their will, often
under threat of violence or imprisonment.

• Lack of transparency. Joe Fresh has been criticized for its lack of
transparency about its supply chain. This makes it difficult to track where the
company's products come from and how they are made.

Related Theories/Frameworks/Models

• Corporate Social Responsibility (CSR)

The idea that companies have a responsibility to consider the social and
environmental impacts of their actions and to act in the best interests of society.
Ethical level CSR was compromised when the company did not show any
responsibility when it came to ensuring the rights of the workers while making them
work in its factory. Another CSR issue that came up was the neglect of laws
regarding working hours of factory workers especially. As found in the case study,
the workers in Bangladesh were often made to work for 13 to 14 hours on all seven
days in a week. Apart from that, the workers were forced to work in the factory on
the day of the tragedy despite knowing the building had cracks. This was also a
serious breach of both ethical and legal breach of CSR

• Stakeholder Theory:
 the idea that companies have a responsibility to consider the interests of all
stakeholders, including employees, customers, suppliers, and the wider
community.

• Triple Bottom Line

The idea that companies should consider not just financial performance, but also
social and environmental performance.

Case Analysis

Joe Fresh faced significant challenges in the aftermath of the Rana Plaza disaster. The
company had to balance its competitive position, shareholder obligations, and customer
demands with ethical sourcing practices. Joe Fresh was not the only company sourcing
products from the factory, but it was one of the brands that received significant media
attention. The company faced criticism for not doing enough to ensure ethical sourcing
practices and for not compensating the victims of the disaster adequately. Joe Fresh
responded to the disaster by committing to improving its sourcing practices and working
conditions in its factories. The company joined the Accord on Fire and Building Safety in
Bangladesh, which is a legally binding agreement between brands and trade unions to
improve working conditions in the garment industry. Joe Fresh also established a
compensation fund for the victims of the Rana Plaza disaster.

Conclusions

The Rana Plaza disaster highlighted the importance of ethical sourcing practices and the
need for companies to consider the social and environmental impacts of their actions. Joe
Fresh responded to the disaster by committing to improving its sourcing practices and
working conditions in its factories. The company's response provides an example of how
companies can take responsibility for their actions and work to improve the lives of
workers in their supply chains.
Recommendations

• Joe Fresh can use technology to improve traceability and transparency in its
supply chain. This can include the use of block chain technology, which can
provide a secure and transparent record of transactions.
• Joe Fresh can engage with its suppliers to promote ethical sourcing practices. This
can include providing training and support to suppliers, and incentivizing them to
comply with ethical sourcing standards.

• Joe Fresh can collaborate with stakeholders, including NGOs, industry

associations, and government agencies, to promote ethical sourcing practices and
address common challenges

Lessons Learned

• Companies have a responsibility to consider the social and environmental impacts

of their actions.
• Ethical sourcing practices are essential to ensure the safety and well-being of
workers in the supply chain.
• Companies can take steps to improve their sourcing practices and work to
compensate victims of disasters.
References

https://financialpost.com/news/retail-marketing/judge-rejects-joe-fresh-class-action-related-to-
bangladesh-factory-disaster[2
https://www.iesepublishing.com/joe-fresh-ethical-sourcing-english.html[3]
https://www.cbc.ca/news/world/joe-fresh-continuing-garment-business-in-bangladesh-in-year-
after-tragedy-1.2606120[4] https://www.vice.com/en/article/mbnxmq/three-years-after-a-factory-
collapse-killed-1130-workers-this-brand-is-still-making-clothes-in-bangladesh[5]
https://store.hbr.org/product/joe-fresh-ethical-sourcing/W16063[6]
https://www.forbes.com/sites/clareoconnor/2014/04/26/these-retailers-involved-in-bangladesh-
factory-disaster-have-yet-to-compensate-victims/?sh=55235889211b