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Opinion

New digital platform shines light on labour rights issues in fashion supply chains

At the height of the COVID-19 pandemic, our shopping preferences may have shifted from the latest trends to comfortable loungewear. But sadly the already dangerous and exploitative working conditions faced by the workers who make our clothes only worsened, as fashion companies scrambled to protect their profits by cancelling orders. Based on cheap prices, speed, and maximising profits, the fashion industry has long been built on poverty wages, exploitation and violence. However, too often the complex and opaque network of global supply chains obscure the relationship between brands and retailers and the labour abuses that take place in their supplier factories.

To shed light on these twisty paths from factories to our wardrobes, Business & Human Rights Resource Centre (BHRRC) has created new company ‘dashboard’ pages for 275 of the largest global fashion and textile companies. They provide easy-to-access information about company performance in protecting garment workers’ rights in their supply chains and cover the full database of labour and human rights allegations BHRRC has collected about each company over the last 18 years.

We include company and financial information, lawsuits over alleged rights violations and civil society benchmark rankings. While benchmarks can be useful to separate leaders from laggards, scores are largely based on companies’ policies and statements, often leading to significant discrepancies with their human rights track records. By placing these alongside other evidence-based indicators, we provide a far clearer picture of the human rights risks linked to the company’s supply chain.

BHRRC

Shockingly, our dashboards show that none of the 275 companies are paying living wages in their supply chain according to Fashion Checker. A ‘living wage’ is a human right and the minimum income needed for workers to meet the most basic needs – food, housing, transport, clothing, healthcare etc – for themselves and their families.

Yet, brands outsource production to take advantage of cheap wages which fall far short of living wages. Our research found the minimum wage is less than half the estimated living wage in 10 major Asian apparel exporting countries. In Sri Lanka, the minimum wage of LKR 10,000 (US$54) per month is a staggering seven times lower than the estimated living wage of LKR 75,6011 (US$408), while in Bangladesh the minimum wage is one sixth of the living wage.

The pandemic has further exposed the extent to which workers shoulder the burden of maintaining companies’ profit margins. We tracked 50 of the biggest, finding over half recorded profits since the pandemic, while many companies (including Walmart and N Brown) are still refusing to pay their suppliers in full. This leaves thousands of garment workers without pay and jobs, pushing them from poverty into potential destitution.

To ensure the workers (whose daily toil creates their profits) earn decent wages, fashion companies must adopt responsible purchasing practices and pay suppliers prices that take into consideration the financial costs of labour. This includes ringfencing labour costs that make living wages possible.

Subcontracting allows companies to shroud their true supply chains in mystery. Because it’s at the far end of supply chains where the more serious forms of exploitation take place, the full range of abuse is obscured. Our dashboards show which companies have begun to be transparent about their supply chains via the Open Apparel Registry (OAR) and those that have facilities listed on Mapped in Bangladesh (MiB). The prevalence and shady nature of subcontracting demonstrates the need for transparency beyond the first tier of the supply chain.

BHRRC

An additional problem are brands’ exploitative purchasing practices. It fuels labour abuses by creating incentives for widespread, unauthorised subcontracting to factories spared the oversight of compliance audits. Brands have a moral and social responsibility to ensure consistent and full visibility over supplier factories. We’re calling for a full list of those in accordance with the Transparency Pledge, going beyond the first tier, so workers and labour groups can know which factories are authorised to produce for the company and which are not. Crucially, this would allow workers and those supporting them the opportunity to hold brands accountable for rights violations in their supply chains.

While many brands have policy commitments to protect freedom of association and collective bargaining, there is a stark gap between these commitments and practice, as our recent report on union busting found. Just five of the 275 companies – including Inditex and H&M – have signed Global Framework Agreements, negotiated at a global level with a trade union to protect the interests of workers across their operations. Brands must do more to protect garment workers’ trade union and collective bargaining rights.

Our analysis of the 275 fashion brands reveal that only a small group of companies disclose adequate levels of information, which prevent garment workers from holding those companies to account for abuses. For decades, voluntary disclosure and sustainability initiatives have failed to bring about change. With the pandemic adding urgency to a crisis, the need for binding, enforceable legislation is stronger than ever. If we are serious about ending the suffering of millions of garment workers worldwide, companies need to be transparent and held to account for labour and human rights violations in their supply chains.