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Manufacturers must comply with minimum standards governing their behaviour towards workers, but the same standards don’t apply to brands’ behaviour towards suppliers, Ali pointed out.
“If you look at some of the big brands’ websites, they would note there that ‘all our suppliers must comply with ILO (International Labour Organisation) Conventions and national and international labour practices. All well and good, thank you very much, we will comply and we will do our best’,” he said.
“In the meantime, what have the customers [brands] complied with? There is absolutely nothing, anywhere really, which actually demands the same level, not the same level but any level of common compliance from the purchaser.”
Why it matters
Last year saw the fashion industry, along with other sectors, fighting for economic survival during the government-imposed lockdown and restrictions. Thousands of retailers worldwide closed their stores for a period of time, some closed for good.
According to data from the ILO, about 50 million garment workers worldwide lost wages that totalled $5.79 billion between March and May last year. The global garment trade virtually collapsed in the first half of 2020 with Asia’s garment-producing countries hit the hardest.
Ali, who is also the vice president of the Bangladesh Manufacturers and Workers Association, recalled that after the Rana Plaza garment factory collapse in 2013 in Dhaka, Bangladesh, many manufacturers in Asia took measures to ensure such a tragedy wouldn’t happen again.
“The factories have become safe, the industry has become safer for the people who work in it, but while the industry made the workplace safer, the people’s livelihood was never secure because their livelihood depends essentially on the balance sheet calculations of somebody sitting somewhere else in some part of the world,” Ali said.
What action has been taken?
The Worker Rights Consortium, an independent monitoring organisation, created a Covid-19 tracker last April to highlight the brands acting responsibly towards their suppliers and workers.
“We started the tracker after a survey of 316 garment suppliers in Bangladesh, conducted by the Center for Global Workers’ Rights (CWGR) at Pennsylvania State University in collaboration with WRC, found that 80 per cent of apparel suppliers have been forced to slash employment as a result of buyers canceling orders and four out of five fired workers have not received the severance pay mandated by law,” Liana Foxvog, crisis response director of the global, told Inside Retail.
“None of the buyers had offered suppliers any financial support to help pay workers.”
When the tracker was launched, only six companies committed to pay suppliers and workers in full for orders completed and those that were already in production: H&M Group, Zara owner Inditex, Kiabi, PVH, Target (USA), and VF Corporation.
“After strong pressure from worker organisations in the exporting countries and advocacy groups in North America and Europe, more companies committed to paying in full for their in-production and completed orders,” Foxvog said.
“Many of the additions are brands that had retroactively canceled substantial quantities of orders at the outset of the pandemic, but later, after public outcry and media scrutiny, shifted their positions and agreed to pay in full for their orders that were already in production or completed.”
One of the CGWR surveys showed that 65 per cent of suppliers last year reported that buyers have demanded price cuts on new orders that are bigger than the year-over-year reductions buyers usually ask for.
While fashion brands do not set the wages of production workers, Ali said there should be a partnership between retailers and manufacturers to strengthen compliance and create mechanisms for fair living wages.
“This gap has to be bridged,” he said.
Where is the fashion industry at now?
According to the Global Fashion Agenda, there needs to be a holistic understanding of how wages should be measured and how systemic change towards better wage systems can be brought about.
“At present, only a minority of companies explain the wage estimates that they use to track and benchmark worker wages within their value chain, meet each worker’s needs and provide some discretionary income,” the advocacy organisation said.
The organisation added that industry players and governments should support and extend wage and social protection schemes, develop policy frameworks and facilitate multi-stakeholder dialogue.
“We need to shake the system up a bit and soften the edges,” said Irina Van Der Sluijs, engagement manager at the Netherlands’ ASN Bank and chairperson at Platform Living Wage Financials, another speaker at last week’s Global Fashion Agenda event.
The ASN Bank funds and invests in garment companies that meet its sustainability criteria. Van Der Sluijs said their bank specifically puts the environment, social, and governance (ESG) criteria first.
“We use our stringent criteria to projects and possible investees,” she said. “We assess our investees on how they perform on living wages and we use that every year and we communicate that openly always on the website.”
Heather Lang, executive director for Sustainable Corporate Solutions Sustainalytics, another speaker at the event said the market has responded and addressed some key socioeconomic issues during the pandemic, including employment, financial inclusion and access to health care.