Page last updated at 16:49 GMT, Thursday, 13 October 2011 17:49 UK

Edinburgh Woollen Mill statement

Statement to BBC Newsnight from The Edinburgh Woollen Mill:

"We have been made aware of your investigations into the use of workers from North Korea in the Eermel knitwear factory in Mongolia.

"We understand that you are not alleging mistreatment of these workers but that you do believe that there are remittances being made by the factory to the North Korean government.

"Following investigations of your allegations we have made some initial enquiries into the issues raised and can confirm that these enquiries are ongoing. We are striving to establish and understand whether there are issues with this factory which should cause us to be concerned. We have found no evidence of this so far.

"We can confirm that we have been supplied with cashmere from the Eermel factory in Mongolia for some time and that we are satisfied with the quality of garments produced by them.

"Our initial enquiries have allowed us to establish the following;

"We were not aware of the national origins of the workers in the factory. We do require that each factory gives an undertaking with regards to the humane treatment and welfare of the workers in each factory.

"We do not believe that there are welfare issues in this factory.

"We do not discriminate on any grounds in relation to the workers in the factories we use.

"We have discussed with the CEO of Cashmere Holdings, who own Eermel, the allegations relating to payments made to the North Korean Government, and the CEO of the factory has responded as follows:

"'Some of the workers of the Eermel factory migrate to Mongolia from North Korea to seek work. These workers arrive untrained and receive full and proper training in the factory. They are provided with health care, transport and accommodation and are well cared for.

"'The workers are fairly paid and the North Korean workers earn well due to their levels of productivity.

"'Workers are paid twice per month. The State Bank of Mongolia is instructed to pay each North Korean worker into their own personal bank account at the State Bank of Mongolia. The only deduction from wages at source is 10% Mongolian tax, which is a legal requirement of the Mongolian government. Each North Korean worker has their own access to their bank account and a debit card for withdrawals and payments. They purchase and spend freely.

"'We do not pay any commission to the North Korean government, any North Korean Agency or any one else, we pay the workers directly.'"

"With regards to the labelling of the garments made in Mongolia as "Designed in Scotland" this labelling is factually correct. The garments are designed by our experienced team at our HO in the Scottish Borders. Our factories are provided with clear design, colour, quality and technical specification from our teams in Scotland in order that a quality garment can be produced by the factory in Mongolia and supplied to our customer at a very keen price.

"It is a regret that we are not able to produce this type of garment at this type of quality and price out of Scotland, however, in these difficult and aggressive economic times it is a source of pride that we continue to develop a strong and expanding business out of Scotland and to provide good quality employment for our staff throughout the UK while being mindful of our social responsibilities to our business partners and their employees."

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