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From it’s introduction in 1978, Ikea’s cheap bookcase Billy was an instant hit. Beween 1978 and 2006, Swedish furniture empire Ikea has sold 32 million Billy bookcases. Billy is the best selling bookcase in the world. Over 400 million people a year visit an Ikea store, from Beijing to Istanbul and from Moscow to Melbourne. Ikea annually sells for about 14.8 billion euro’s worth of goods.

The Ikea formula: succes guaranteed

But Ikea is more than just a furniture store: whoever buys an Ikea bookcase shows that they belong to the globally expanding middleclass. As long as there are people from Pittsburg, Moscow or Shanghai with just a little bit of money to spend and who want to belong to the middleclass, Ikea can exist. The furniture giant is able to sell products for extremely low prices because it uses cheap, new materials like woodcurls melted in plastic and putting products in compact packages. And the unaltered concept of Ikea is also part of its success. All its stores are big and the stock is always up to date because a third of it is replaced by something new every year. You can eat Swedish meatballs in the restaurant, which makes the long journey to the store bearable. It’s things like this that strengthen its squeaky clean Swedish image.
But Ikea has also made some big mistakes. The store’s introduction in the US was difficult because of the European sizes of products like beds, kitchens and glasses. Americans used to buy vases to drink from because the European glasses were to small. And Ikea launched a children’s bed named ‘Gutvik’, which sounds like the German expression for ‘good fuck’.

I did it IWAY

But such trivial mistakes are nothing compared to the way employees are treated at Ikea’s suppliers. In 1998 Ikea got in trouble after two documentaries revealed that small children were working in factories of Ikea suppliers. In Holland, the political faction SP organised demonstrations at Ikea for a few months, asking clients not to buy anything that was manifactured through child labor. About fifty thousand clients supported the initiative and eventually Ikea created The Ikea Way or IWAY, a code of conduct for Ikea suppliers. The code is relatively strict and the much praised IWAY is often taken as an example of social and economical enterprising.

But research in 2006 showed that Ikea often doesn’t obey its own rules. Although child labor seems to have disappeared, the social conditions as defined in IWAY often aren’t accomplished. In factories in India that produce furniture for Ikea, employees work up to 15 hours a day, 6 days a week for very low wages. In Bangladesh, wages are late most of the times and overtime is hardly ever compensated. Employers threaten their personnel with dismissal to prevent them from organising labor unions.

Internal and ‘external’ oversight

How is this possible? IWAY suggests that Ikea will strictly oversee the maintenance of the code of conduct and that there will be extern oversight. Suppliers are checked by so called ‘audits’, who visit the suppliers mainly to check on the quality of the goods. Most of these visits are done by local Ikea importers. Out of 90.000 employees, Ikea only has 5 controllers that check the IWAY rules. They also train national Ikea buyers and they made 53 check-up visits in 2005.

The external oversight is even worse. In 2004 only 7 visits to Ikea suppliers were executed. These visits are made by controllers of companies like KPMG and PriceWaterhouseCoopers. Their names can be found in Ikea leaflets about responsible enterprising, but these companies are not allowed to publish the audits’ results. They only report to Ikea’s management. It seems that Ikea only uses those companies to look trustworthy and independent, when the audits are actually nothing more than internal controllers.  

Yes, Billy and very other Ikea product is cheap, but they’re not because of compact packaging or cheap materials. It’s not surprising that Ikea has transferred most of it’s production to low-wage countries in Asia: in 1997 only 33 per cent of its production took place in Asia, nowadays more than half of the furniture is made there. The real, social costs of all those cheap products are on Ikea employees in Bangladesh, China and other countries.