Italy's fashion brands sign accord to fight worker exploitation

MILAN (Reuters) -Italian legal and political authorities, fashion industry bodies and trade unions signed an action plan on Monday to fight worker exploitation in the apparel and accessories supply chain, after prosecutors uncovered widespread abuse.

Italy accounts for half the world's production in the luxury fashion industry.

The plan, which is not legally binding, is an attempt to tackle what Milan prosecutors have described in documents seen by Reuters as "a generalised manufacturing method" that puts lives at risk to boost profits.

A first draft of the scheme was proposed by a Milan court in June last year, after prosecutors uncovered workshops where underpaid workers, often irregular immigrants, produced leather bags sold to Dior and Armani for a tiny fraction of their retail price.

This month an Italian court placed a unit of Valentino under judicial administration for a year, after uncovering worker abuse in its supply chain.

"The goal is that the court will no longer have to intervene", Fabio Roia, the president of Milan's court system, told journalists on the sidelines of the memorandum signing.

The memorandum of understanding - reviewed by Reuters - focuses on the creation of a database of brands' suppliers and their workforces.

Supply chain firms will voluntarily enter their data on the platform, including information on tax compliance, social security contributions and labour law compliance, with updates at least every six months.

According to Monday's agreement, fashion brands must commit to raising awareness of the new platform among their suppliers and urge them to enter their data. However, they may still use suppliers and subcontractors that fail to do so.

The regional government of Lombardy, around Milan, will issue firms that sign up to the scheme with a six-month renewable certificate of transparency.

(Reporting by Elisa Anzolin and Emilio Parodi, editing by Gavin Jones and Barbara Lewis)