Lynnette Kay, director at Slave-Free Alliance in Australia, has praised Aldi for its proactive approach to prevent modern slavery and is encouraging other businesses in the retail industry to step outside of their comfort zone and tackle the issues in their supply chains.
“Retail supply chains are very complex and can involve tens of thousands of suppliers across many sourcing tiers. The supply chains are also constantly changing due to environmental factors, the need to ensure product availability and the need to keep prices as low as possible,” Kay said.
“It is extremely difficult for retailers to continually understand and mitigate the modern slavery risks in their supply chains. [However] there is an opportunity for innovative businesses to set themselves apart in the market and protect their brand reputation.”
Red flags to watch out for
Kay identifies several ‘red flags’ for retailers with high turnover that could indicate exploitation and slavery in the supply chain.
“The first is labour supply companies involved in the supply chain. Work that is unskilled and often completed by migrant workers (for example, picking fresh produce, packaging meat or poultry products or cleaning premises) is a risk,” she said.
“Lack of knowledge of English and their labour rights in Australia are other red flags. This is also a challenge in global supply chains.”
Her advice for retail and FMCG brands is to start by identifying suppliers and mapping them out by location and the size of the contracts.
“Assess your business’ knowledge of modern slavery risk, from the executive team to buyers and other staff, and then your suppliers’ knowledge of modern slavery risks and systems in place to address the risks. Then prioritise high risk areas for further investigation,” Kay said.
“Also, working with others to increase your leverage with businesses overseas is often much more effective than trying to do this as a single retailer.”
Of course, every brand’s supply chain is vastly different. The fashion industry still has a long way to go in addressing modern slavery.
According to James Bartle, founding CEO of Outland Denim, “the system is broken” in the fashion sector.
“At its core as a system, the fashion industry has been built in a way that exploits people, millions and millions of people,” Bartle told Inside Retail.
“And so the biggest challenge for a single brand such as ourselves is investment into the innovation, infrastructure, and technology we need to rewrite this system and rebuild it in a better way. It’s simply not something we can do on our own.”
Bartle founded Outland Denim in 2011 in a bid to provide employment for young women in Asia at risk of human trafficking. It is one of few brands that can boast 100 per cent traceability of its organic cotton denim supply chain.
“With this level of traceability and connection to our suppliers, there is opportunity to gain understanding of the challenges that face these workers, and improve conditions for the benefit of the whole industry,” he said.
Outland Denim has been working in partnership with PSG, Bossa Denim and Nudie Jeans using the Supply Network Intelligence System, a program that supports suppliers at the earliest stages of the fashion supply chain, to address any issues. The brand also recently launched an equity crowdfunding campaign with Birchal to support its sustainability initiatives.
“Creating a brand truly by the people, for the people, shareholders will be investing in circularity research that we hope will revolutionise the way we discard textiles, as well as our manufacturing arm, which will offer opportunity to use the sustainable production methods we have become known for to produce for other brands. For us, it’s simple. The more we grow, the greater impact we can have,” he said.
Bartle believes there is a lot more awareness, education, and action being taken in the retail industry to protect garment workers compared to when Outland Denim started out, but there’s still a lot of work to be done to resolve issues further down the supply chain.
“The further from the brand a supplier is, the less traceability, and therefore the higher the opportunity for exploitation,” he said, advising brands to collaborate not only with other brands but with suppliers to find solutions.
“We need to collaborate with our suppliers too in order to identify issues and find the solutions. We don’t exist in a vacuum so no one is going to win this ‘sustainability race’”.
The biggest challenge, he said, is not falling into the trap of greenwashing and the ‘race to sustainability’.
“This manipulative marketing that stamps products as “100% sustainable” or hides facts in the fine print, if at all, is the greatest threat to the pursuit of sustainable practices and innovation,” he said.
“It slows true progress; and while it may win positive sentiment in the short-term, brands will suffer the repercussions of disenfranchised customers when the truth in their slogans is inevitably brought to light.”