The Action, Collaboration and Transformation (ACT) initiative is an agreement between 20 global retailers that have committed to achieving living wages for workers in the global garment industry through collective bargaining. This is the binding process that covers workers and employers across a range of issues, including the payment of a living wage.
The list of international brands that have signed onto the agreement include ASOS, Bestseller, Inditex, H&M, Cotton On Group, Primark, Tesco, Kmart, Big W and Target among others. ACT operates in four key garment producing countries: Turkey, Bangladesh, Myanmar and Cambodia.
“Individually, we really don’t have the scale to influence the change that we need,” Lambell said. “So we really needed to look at this systematically and [we have] taken an industry-wide approach.”
The agreement is backed by a comprehensive accountability and monitoring framework and brands are required to do an annual assessment of their purchasing practices, which is then submitted to the secretariat.
“Ultimately, success with those purchasing practices will be judged by our suppliers and [global union] IndustriALL, not the brands themselves, which I think is important,” Lambell said.
According to Miran Ali, managing director of Tarasima Apparel, one of Bangladesh’s major manufacturers, a major issue is the employer’s capacity to pay wages.
“Ultimately, my buyer is the one who can determine what’s going to happen to me and to my workers,” said Ali, who is also vice president of the Bangladesh Garment Manufacturers and Exporters Association.
“The main problem is the capacity to pay wages because if [brands’] actions push us as manufacturers to the brink of bankruptcy, that affects our ability to pay wages. The climactic moment of this was right around this time last year, when the Covid pandemic was really [becoming] worse,” he said.
Data from the International Labour Organisation revealed 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 said he is in full support of ACT and the principles of which ACT is founded so they can really determine not just the wages but also the survivability of the factories.
“There is a massive power imbalance here because if one of my big customers comes and demands something, whether it’s fair or unfair or planned or unplanned, I’m going to have to try and accommodate it,” he said.
“In failing to accommodate it, that jeopardises my ability to pay my wages. It’s not that I’m going to cut my workers’ wages because of something that a brand has done, but it would be something that affects my ability to continue to pay. That is the biggest risk we have for the workers in our industry.”
According to Ali, ACT should be worked on at a regional level, not just on a country level and it should be really pushed across all the countries that it is meant to encompass.
How global brands are progressing
As part of their commitment to ACT, retailer brands have committed to the following:
- Purchasing prices that include negotiated wages as itemised costs;
- Fair payment terms;
- Better planning and forecasting;
- Undertaking training on responsible sourcing and buying;
- Responsible exit strategies.
Lambell said in the past year, Kmart has established a project team to drive the implementation of above changes required to meet their December 2023 commitment. These include the introduction of a new open costing sheet. Approximately 40 per cent of suppliers have now submitted open costing in the new format.
Kmart has also continued to roll out enhanced planning and forecasting mechanisms with strategic and core suppliers to improve the accuracy of its forecasts and maximise capacity planning in factories. It has also developed a responsible business exit strategy and procedures in accordance with the ACT Responsible Exit Policy and Checklist.
Under the ACT, when businesses exit factories, they should be clearly communicated by the supplier to the factory, in a comprehensive manner and in writing, accompanied by a clear timeline.
As it can pose a risk to factory workers losing their jobs, brands should allow for more time for the supplier to find new clients or, if absolutely necessary, reduce the number of workers in the facility in an appropriate manner. The proposed timeline and volume should be included in the information collected prior to exiting.
“We have a long road ahead and we obviously realise we’ve got many improvements to make as brands but we have seen great progress,” Lambell said.