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26 Feb 2021

Sharon Waxman, President & CEO, Fair Labor Association

Resilient Workers in Fragile Supply Chains: The FLA calls for international action

The chaos and uncertainty that unfolded in the wake of the COVID-19 pandemic demonstrated the fragility of the global apparel supply chain. As COVID-19 spread, consumer demand plummeted and businesses faced unprecedented liquidity problems. Many suppliers were left to cope with a perfect storm of mandated shutdowns, a lack of raw materials and cancelled orders. Millions of workers lost their income and faced food insecurity.

The economic downturn was particularly devastating for apparel workers. The absence of adequate social safety nets and other protections often made it impossible for families to put food on the table and keep a roof over their heads. The majority of garment workers are women, often in low-pay, low-power positions, underrepresented in unions, and with additional child and elderly care duties at home. These workers are among the most vulnerable to sudden shifts in income. The ripple effect of COVID-19 put their immediate and long-term financial well-being at grave risk.

As a non-profit organisation that includes many leading apparel and footwear companies, we at the Fair Labor Association (FLA) recognise COVID-19 put the global economy through an epic ‘stress test’. Unfortunately, we saw that the current system fail to adequately protect workers and their families. As we work to build back from the economic wreckage caused by the pandemic, we need to be honest about the strengths and shortcomings of our efforts to protect the rights and livelihoods of workers, and redouble our efforts to build a more resilient system.

If there is one clear lesson from the COVID-19 crisis, it is this: a meaningful commitment to responsible purchasing practices must be central in any conversation about business and human rights.

Business action:

Too often, suppliers are held solely responsible for protecting workers, and factory management take the blame when things go wrong. However, as we have seen during the pandemic, the way brands and retailers behave is equally important. Unfortunately, not all brands and retailers honour their contractual commitments when their bottom line is threatened.

No one could have predicted or planned for the staggering economic fallout from COVID-19. Still, it should never be easy for companies to renege on contracts without accepting responsibility for the human costs – and the humans who depend on them for their livelihoods.

During the crisis, we advised FLA affiliates to honour their contracts as a way to help ensure workers continued to get paid. Brands such as Adidas, Fast Retailing, New Balance, Nike, Patagonia, and Under Armour publicly stated their commitment to uphold supplier contracts by paying for finished products, and for products where work had already begun. I believe their work, and that of others who are part of the FLA, and their broader commitment to our principles made a difference for workers. Companies that uphold good purchasing practices in good times and bad should be the rule, not the exception.

Buyers should treat suppliers as partners and work with them to prevent worker retrenchment whenever possible. And when retrenchment cannot be avoided, they need to ensure that workers receive the legally mandated severance benefits.

Government protection:

While businesses must act responsibly, governments must take the lead in protecting their citizens. To complement private sector efforts, governments and global partners need to act, once and for all, to adopt more robust social protection systems that are so clearly essential, to help the vulnerable and those on or below the poverty line to cope with the unexpected. Workers cannot be left wanting when protection is needed the most.

Many countries receiving financial resources through international organisations like the World Bank have minimal or inadequate social protection schemes. This needs to change. This aid should be conditioned on a time-bound strategy to develop more robust social protection schemes to protect workers from the ebb and flow of economic change. Most of the garments made by workers in global supply chains are sold in Europe, the United States, Japan, Australia and Canada. These governments bear a special responsibility to respond and be at the forefront of global advocacy and joint efforts to build more vital social protection schemes, particularly for apparel and footwear workers.

The havoc wreaked on the lives of millions of workers around the world is a clarion call for action and change. If, as the Business Roundtable has declared, a corporation’s purpose is to advance all stakeholders’ interests – and not only shareholders – greater fairness and equity for workers must be front and centre in any just and sustainable recovery. Companies must respect the highest labour standards and protect the most vulnerable workers in their supply chains. The international community must join in these efforts.