By Sachin Ravikumar and Chandini Monnappa
BENGALURU (Reuters) - A top apparel industry watchdog has launched an investigation into underwear maker Jockey International's Indian partner Page Industries Ltd (NS:PAGE) following allegations of human rights abuses at one of its factories, the watchdog told Reuters.
The investigation by U.S.-based Worldwide Responsible Accredited Production (WRAP) comes after Norway's $1 trillion sovereign wealth fund dropped Page from its investment portfolio due to concerns of human rights violations at "Unit-III" - one of Page's Jockey manufacturing sites in the southern Indian city of Bengaluru.
Page has denied wrongdoing and called allegations https://etikkradet.no/files/2020/08/Page-ENG.pdf of verbal abuse and workplace intimidation against employees "outrageous". It did not answer Reuters' questions about the WRAP probe, but said it has evidence which "flatly disproves" the allegations.
Shares in Page Industries fell as much as 3.2% on India's National Stock Exchange on Wednesday after news of the probe. The stock, which had climbed 0.8% earlier on Wednesday, was down 1.2% as of 0820 GMT.
In an email to Reuters, WRAP spokesman Seth Lennon said such violations could normally result in a factory losing its certification.
"Should the facility refuse to remediate such non-compliances or should the remediation efforts be insufficient, WRAP will revoke the facility's certification. In case any non-compliances noted prove to be so egregious as to leave no room for remediation, WRAP reserves the right to immediately suspend the facility's certificate," Lennon said.
WRAP said it makes certification decisions on a facility-by-facility basis and that it investigates whenever it receives credible concerns.
The Page site under investigation is certified until Nov. 15. WRAP did not say whether it would investigate any of Page's other manufacturing sites.
A WRAP certificate is much sought after by garment factories in countries including India, Bangladesh, China and Vietnam, as it provides assurance to international clothing brands that a factory adheres to certain ethical and safety standards.
U.S.-based Jockey, a WRAP founding member, told Reuters it requires all of its partners to maintain the certification and that it would "closely monitor" the outcome of an internal evaluation of the allegations being carried out by Page.
It did not comment on whether it would sever ties with Page if the Indian company was censured by WRAP.
Bengaluru-headquartered Page is the exclusive licensee for Jockey wear in India and six other countries. Page also makes apparel for Britain-based swimwear maker Speedo, but in a smaller capacity.
Speedo said last month it would investigate the Norwegian wealth fund's allegations and follow up with Page "as a matter of urgency". It did not respond to a Reuters email seeking comment on the WRAP probe.
While WRAP did not specify when it began its investigation into the Page factory, a person with knowledge of the development said it started in late September.
The Unit-III factory in Bengaluru employs about 1,000 workers. Page, which reported roughly $400 million in revenue in the fiscal year ended March 31, did not disclose what proportion of sales came from Unit-III.
The outcome of the WRAP probe is due in the coming weeks, the person said, without specifying a date. The person was not authorised to speak publicly on the matter and so declined to be identified.
WRAP said it would not comment on the details of an ongoing investigation.
Page said it has engaged with the Norwegian wealth fund's Council on Ethics - the body which recommended the fund exclude Page from its portfolio after its investigation "assessed the risk that Page is contributing to or is itself responsible for systematic abuses of internationally recognised human and labour rights".
The Council on Ethics told Reuters it had accepted Page's request for a meeting, and that it would likely need to conduct another investigation to assess whether its recommendation on Page should change.