May 14, 2002

Shareholder Group Calls on Hudson's Bay To Report - On Sweatshop Abuses in Lesotho

HUDSON'S BAY CO ("HBC-T;HBCSF-0")
Poor reporting procedures and a lack of information on what Canada's oldest company, Hudson's Bay Company (HBC.TO) is doing to end alleged sweatshop practices at three factories in the South African nation of Lesotho is generating a storm of controversy. And it is a situation that is clearly not in the best interests of the company's shareholders, according to the Shareholder Association for Research and Education (SHARE). A report prepared for The Ethical Trading Action Group in March, documenting rights violations at the factories include allegations of physical and verbal abuse, sexual harassment, emergency exits locked during working hours, compulsory overtime with seven-day work weeks, child labour, and pregnant women forced to stand throughout the workday. The results of an independent audit done by a monitoring firm appointed by HBC have not been released.

Although HBC has one of the industry's better codes of conduct for suppliers on paper, its failure to release the results of an independent audit of the factories continues to undermine its credibility on important human rights issues, says Peter Chapman, Executive Director of Share.

Ultimately, HBC's failure to disclose the results of its own audit of these factories could further threaten the share price which has already been battered by market conditions and downgraded debt rating.

The company is also facing a shareholder vote at its AGM on May 22nd that calls for the establishment of an independent and transparent monitoring process to reduce the risks that investors may face from consumer boycotts, litigation or damage to reputation.

As shareholders, we want the company to take concrete steps toward change, and this begins with greater transparency and openness in the reporting process, says Kenneth Georgetti, Chair of the Board, Working Enterprises Ltd., a Hudson's Bay Co. investor. We are asking the Hudson's Bay to do the right thing by its shareholders, to be part of the solution in Lesotho, not the problem.

A national coalition of church, labour, and non-governmental organizations supports the shareholder resolution and is also calling the Hudson's Bay Company to work with its suppliers and the garment workers in Lesotho to eliminate sweatshop abuses at the three factories.

At this point, we are deeply concerned that Hudson's Bay will simply turn away from the issue, says Rieky Stuart, Executive Director of Oxfam Canada.

Rather than take steps to clean up the factories in Lesotho, the company may choose to continue to hide the results of its audit and then move its clothing contracts to other low-cost factories that aren't yet on the public radar screen. We believe the company and its shareholders would be better served by looking for ways to improve the situation and live up to internationally recognized labour standards.

Last week, Fairvest, the Canadian proxy advisory arm of Institutional Shareholder Services, issued a recommendation that clients holding shares in Hudson's Bay Company vote in favour of the global labour standards proposal now before HBC shareholders.

SHARE is a national not-for-profit organization helping pension funds to build sound investment practices, to protect the interest of plan beneficiaries and to contribute to a just and healthy society. TEL: (604) 408-2456

Peter Chapman, Executive Director, SHARE Email: This email address is being protected from spambots. You need JavaScript enabled to view it. INET : www.share.ca TEL: (604) 538-0258

Gordon Keast, Chalice Communications Inc.

WEBSITE This email address is being protected from spambots. You need JavaScript enabled to view it.