Body Shop International Takes Heat With Ethics Charges
ADDENDUM: The following story about Body Shop International contained an erroneous statement, due to a tape editing error, when it was originally broadcast. The story ran in Morning Edition, September 7, 1994 and a correction was run the next day, September 8, 1994, in Morning Edition.
ALEX CHADWICK, Host: This is Morning Edition; I'm Alex Chadwick. The cosmetics company Body Shop International advertises itself as socially and environmentally responsible, but, an article in the Minnesota- based magazine Business Ethics challenges that claim. Among other things, the article alleges that Body Shop's products are not so natural, its policies not so environmentally conscious, and its business practices not so ethical. Nina Teicholz reports.
NINA TEICHOLZ, Reporter: With more than a thousand outlets in 45 countries, the London-based Body Shop's trademark bright-green stores are well-known to many consumers. And, like many people, the customers in this Washington, D.C., shop say the company's socially responsible reputation is one of the main reasons they buy Body Shop products.
BODY SHOP SHOPPER: I like to buy the ones that are made in, like, Third World countries and stuff like that. I think that's a really neat idea.
2nd BODY SHOP SHOPPER: I like their commitment to the environment. They're very conscious about that.
3rd BODY SHOP SHOPPER: And I like the fact that they don't use animal testing. I like to support that kind of business.
TEICHOLZ: But, last week, that progressive image came under fire. In an article published by Business Ethics magazine, journalist John Entine [sp] reported that the company's image is more myth than reality.
JOHN ENTINE, Journalist, `Business Ethics' Magazine: The Body Shop is sleazy and bullying, and hides behind a veneer of rubbishy and manipulative propaganda. They are nothing more than a group of thugs.
TEICHOLZ: Here, Entine quotes a letter sent to him by Steven Corey [sp], director of the Indigenous Peoples Rights Organization, Survival International. The statement may sound like hyperbole, but, Entine says more than 125 interviews with former employees, franchisees, and others, support that view. For example, according to Entine, the company emphasizes its program to buy raw materials from the developing world. Yet, those products account for less than 1 percent of its overall purchases. And he says the Body Shop's so-called `natural products' are apparently filled with petrochemicals.
Mr. ENTINE: Its colorings, its fragrances, its preservative systems, its base ingredients, are all synthetics, are all petrochemicals. Yet, if you pick up a Body Shop brochure, or you look in their product catalogue, you don't see a word mentioning the petrochemicals.
TEICHOLZ: The Body Shop's record as an environmental leader is also called into question. In 1991, for example, David Brook [sp] was hired by the company to develop environmental programs for the company' s U.S. branch.
DAVID BROOK, Developed Environmental Programs for Body Shop International: The reality was that I had no budget to put those ideas and programs into place. At that point I began to question how sincerely committed the corporation was towards accomplishing those environmental objectives.
TEICHOLZ: Brook says company officials stymied his attempts to improve recycling efforts which, to him, reflected the Body Shop's overall focus on the bottom line.
Mr. BROOK: Some of the decisions that seemed to be made in the U.K. were based purely on economics and not on environmental concerns. And what I mean by that is that if it was cheaper to make a container out of a cheap plastic over there without regard to its recyclability, they would do it.
TEICHOLZ: Perhaps most troublesome of John Entine's allegations is that the Body Shop abuses its franchisees around the world.
Mr. ENTINE: The Body Shop just settled a breach of contract suit in Norway. French franchisees have banded together to take legal action. There are problems in Australia, Scotland-
TEICHOLZ: Conversations with several U.S. franchisees, afraid to be named, confirmed this portrayal. Their revenue never came close to company projections, and when, nearing bankruptcy, they approached the company for help, they say the Body Shop responded with legal threats and intimidation tactics. A spokesman for the House Small Business Committee, currently reviewing franchising practices, says he's received complaints from almost a quarter of the 65 U.S. Body Shop franchisees, and the Federal Trade Commission is investigating those complaints.
The Body Shop has launched a vigorous campaign of denial against the article, although company spokeswoman Angela Bawtry [sp] admits a rapidly expanding company sometimes makes mistakes.
ANGELA BAWTRY, Spokesperson, Body Shop International: At the end of the day we are human beings, and I think, you know, in any company you're going to get small incidents that don't go the way you want them to go, and we admit that that's the case. I think what we have here is a completely flawed picture of those incidents being exaggerated; some of them actually being untrue.
TEICHOLZ: She says the Body Shop fully discloses the contents of its products, and that synthetics and petrochemicals must sometimes be used for preservative purposes. She characterizes the company' s relationship with its franchisees as healthy and prosperous, and the Body Shop calls environmental manager David Brook a `disgruntled former employee.' Consumer advocate Ralph Nader has criticized John Entine for picking on a decent, if imperfect, company, when so many other corporations engage in much more reprehensible business practices.
But, as Richard Adams [sp], publisher of U.K.-based New Consumer magazine says, the Body Shop must answer to a higher standard of accountability.
RICHARD ADAMS, Publisher, `New Consumer' Magazine: The difficulty with the Body Shop is that it claims leadership of the social responsibility movement in business. To me, that means they have to be operating at really a very high level and, unfortunately, this doesn't seem to be the case.
TEICHOLZ: Many in the socially responsible investment movement are dismayed by the company's continued resistance to outside scrutiny and criticism. They hope the dispute will be clarified by two investment house reports on the Body Shop due out later this month. For National Public Radio, this is Nina Teicholz reporting.
CHADWICK: A correction now regarding our story yesterday about the Body Shop International, a producer of cosmetics and other beauty products. Due to a tape-editing error, the story created the impression that Body Shop products contain only petrochemicals and synthetics; in fact, the products do contain natural ingredients, as well as other substances.
[The preceding text has been professionally transcribed. However, in order to meet rigid distribution and transmission deadlines, it has not been proofread against audiotape and cannot, for that reason, be guaranteed as to the accuracy of speakers' words or spelling.]