Loro Piana, criticized for its activities in Peru, declares to raise awareness among its partners there (#1688219)

A Loro Piana executive told government officials that the luxury clothing brand did not know whether any Peruvian natives were paid for supplying the company with fiber used to make $9,000 sweaters, or just over $8,650. euros.

The Italian company came under fire in March after a Bloomberg Businessweek report showed that Peruvian workers supplying Loro Piana were sometimes not paid for their work hunting and capturing vicuñas, the wild cousins ​​of the vicuña. alpaca, which produces the finest and most expensive wool in the world. Critics have called it “exploitation,” while Loro Piana says it pays local communities, who then determine how they distribute the payments.

The executive's remarks were made in April during a roundtable discussion between the textile industry and government, and a video recording was obtained following a public records request. It's the clearest acknowledgment yet of potential gaps in the company's knowledge about working conditions in its 30-year-old and highly prized Peruvian vicuña fiber supply chain. Loro Piana sources its vicuña fiber from poor Andean communities who capture the animals for shearing in a process called “Chaccu.”

“It has been said that we do not pay the people who do the Chaccu,” said Eliphas Coeli, general manager of Loro Piana in Peru. He had in fact raised his hand spontaneously to take the microphone towards the end of the 150-minute meeting, without this having been previously announced.

“I don't know how other companies operate, but we buy the fiber and deposit the payment for the value of the fiber into a bank account. The distribution of this payment is beyond our control,” he added. reference to indigenous communities and how they then use this money.

The Loro Piana company said in a statement that it had increased audits of its suppliers to ensure compliance and was working with local NGOs to benefit up to 15 vicuña communities with infrastructure projects, health care, nutrition and education.

“Loro Piana strongly reaffirms its long-standing commitment to ethical and responsible business practices. Over the past 30 years, the house has fully respected Peruvian law, ethics and labor regimes of local communities recognized by the Constitution, as well as their legitimate practices, such as the Chaccu, which takes place every year for one day.

The April meeting, a month after the Businessweek article was published, organized by government officials, brought together representatives of the vicuña industry.

Loro Piana – a subsidiary of luxury giant LVMH owned by Bernard Arnault and a flagship brand of the quiet luxury movement – is the world's leading buyer of raw vicuna fibers and the leading seller of clothing made from vicuna wool. Peruvian indigenous groups are its main suppliers of raw fiber. The company's CEO, Damien Bertrand, told the Financial Times in October that he had “officially refuted” the Businessweek article, without providing further details.

At the April meeting, Eliphas Coeli's remarks prompted a response from Enrique Michaud, who at the time was the government's main official responsible for regulating wildlife, including vicuñas. He has since left office.

“I understand what you are saying, Eliphas, and it is correct that it is a private contract signed with a community and that it is responsible for the redistribution” of income, declared Enrique Michaud. “However, we need to think about mechanisms to ensure a correct distribution of benefits.”

LVMH's code of conduct towards its suppliers states that organizations that supply it with materials must pay wages “sufficient to meet the basic needs of workers and provide them with discretionary income.” Loro Piana said it had “launched a supplier awareness campaign to better enforce our code of conduct”.

Eliphas Coeli directly addressed the code of conduct during the discussion, saying that Peruvian suppliers sign it. “Is there a form of indirect liability?” he continued. “Yes, perhaps, because each company is indeed responsible for where it sources its materials. It's easy to say, but it's much less so when it comes to confirming it” .