Finger-pointing in the fashion supply chain is a constant that has endured for decades. The question of who should pay for the suffering of workers has been volleyed between stakeholders, but the reality is that labor often bears the brunt of decisions made by global brands.
“I think it’s very important to talk about this now as the industry has a dark night of the soul and thinks about how it adapts [into a] modern industry that puts rights and the environment at its core,” Business & Human Rights Resource Centre (BHRCC) labor rights project manager Natalie Swan told Sourcing Journal.
The launch of BHRCC’s digital portal shines a spotlight on how fashion brands’ purchasing practices affect workers’ rights across the globe, providing information and possible solutions. Titled, “Who Pays for the Crisis?” the portal contains key information and analysis on supply chain shocks, brand responses and the end-of-the-line impacts on workers.
It also features insights into the intersection between supply chain resilience, purchasing practices and worker rights. According to BHRCC, it will be updated regularly to act as a resource for the whole value chain, including brands who wish to understand how their purchasing practices can play a role in preventing worker abuse.
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Within the portal, there is also an allegation tracker of labor rights abuses found in the supply chains of global apparel brands.
The portal has been received with mixed reactions, including some displeasure from global brands and retailers who find the spotlight unwelcome. But manufacturers in Bangladesh, Turkey and India said that a tool to promote transparency has been a long time coming.
“It is normal for us to always be on a firing line—that we are not doing enough no matter how much effort we put in, but ultimately the level of stress we’re under needs some recognition too,” a Bangladesh manufacturer said. “We’re squeezed for every cent by the brands and retailers for whom we manufacture, and we have been asking for years for them to take some responsibility in helping us help the labor.”
Several labor leaders said they regarded the portal with surprise because they didn’t expect global brands to be held accountable for their part in the problem.
“It’s a long-standing problem that we have all been facing, how purchasing practice is the dark side of the business model, really implicating workers at the bottom of the supply chain,” Bangladesh Centre for Worker Solidarity (BCWS) executive director Kalpona Akhter said. “Manufacturers don’t speak about it openly because they are too worried about their business relations.”
Akhter said the issue came to the fore during the Covid-19 crisis, “as many businesses canceled orders, not caring if the workers would get paid.” According to the labor leader, “Workers needed to hear something different, like, ‘Don’t worry, we have your back, because we have made profits for a long time.’”
“Instead, global brands and retailers reacted by announcing themselves as ‘bankrupt’ so they didn’t have to pay manufacturers,” she added. “More than 300,000 workers lost their jobs, they ended up back in the villages starving with their children.”
Labor leaders in Vietnam responded similarly, saying they were forced to make cuts that caused workers and their families to go hungry. They called for the global purchasing practices business model to be “reviewed or upgraded.”
Swan said important discussions on due diligence and risk assessment need to be had. Speaking about the influence that brand purchasing practices have on labor rights outcomes, she noted the “alarming disruptions” to purchasing models exacerbated by economic slowdowns, political instability and the impact of the climate emergency in sourcing countries.
“These have led to factory closures, reduced working hours for labor, and the need for practices that safeguard worker livelihoods and workplaces,” she said. Swan also said it is “really important that in parallel with the conversation on due diligence we have this conversation about money and about purchasing practices and how these two things are intrinsically interlinked.”
“This would help brands think more broadly, more creatively and more concertedly about how they undertake due diligence, engage with stakeholders, workers and their representatives along the supply chain,” she said. “You can have the most beautiful risk assessment but if you don’t have money to mitigate those risks and allow workers across the supply chain to thrive—from ensuring safe work places and due wages that are actually decent—then we’re not going to see a reduction in labor rights abuse.”
She noted the urgency of this mission, adding that it is “critical that we have that conversation now.”
“As we shift to an ever-increasing climate emergency where we know a just transition is needed to a low-waste, low-carbon industry that has workers and workers’ rights at its heart, we need to be negotiating,” she said.
Swan referred to international fashion buyers as market leaders with the leverage to determine where and how businesses operate. They can set the standards for the industry, she believes.
BHRCC has added a special focus on Bangladesh within its portal, as the country was under a microscope throughout 2023 for civil unrest related to the debate over the minimum wage. In the end, the settlement on Dec. 1 raised the minimum wage to 12,500 taka ($113.12) per month, an increase of over 56 percent that still falls far short of the estimated 23,000 taka ($208.20) per month needed to constitute a “living wage.”
Manufacturers stressed that the jump in pay has been taxing for them, and called for better costing from global players rather than just rhetoric about social impact and sustainability.
Reaching out to the top 15 international buyers, as well as labor rights activists, BHRCC said that several brands have shown commendable responsiveness and robust commitment to addressing the Bangladesh wage crisis.
Nine brands confirmed that they incorporated the new minimum wage into costings, with three—Primark, Bestseller and Next—revising existing orders to reflect the change in pay. Meanwhile, Bestseller, Next, Inditex and H&M have taken significant steps to make wages a clear, itemized cost within their pricing frameworks, applying these changes directly to their operations in Bangladesh.
Seven brands including Bestseller, H&M, Tesco, C&A, Next, Inditex and Primark, as members of the Action, Collaboration, Transformation (ACT) Initiative, are collectively working towards addressing living wages in their supply chains, underscoring a commitment to ethical practices.
A Supply Side map within the portal highlights key statistics on the workforce and industry in sourcing countries, with a frequently updated news feed of publicly available articles related to the impact of purchasing practices on worker rights.
Some brands told Sourcing Journal that they were not pleased with the portal’s allegations tracker, and questioned where the information was coming from. Swan said BHRCC compiles publicly available information for the tool. “It’s not a completely full sample, but a sample of what is available in the public domain to build a picture,” she explained.
“Those brands that we have contacted have already provided information in the public domain that allowed us to make these connections,” she added, noting that there was a 53-percent response rate to a questionnaire sent out to brands and retailers.
“We welcome those businesses that have been transparent enough and acknowledged that there is public accountability,” she said. “We are living in the realm of privacy and anti-trust, and many businesses have utilized this as a way to not as publicly talk about issues around purchasing practices and costs.”
Manufacturers in Bangladesh told Sourcing Journal that they’ve feared raising the issue at the risk of losing business from global brands. That would leave garment workers in an even worse place—without jobs. But labor leader Akhter said she doesn’t believe companies will be “shifting their business overnight” if the supply chain speaks out.
“The situation is not about Bangladesh or India or Vietnam, but every country they source from. Traditional workers need to raise their voice to have better living wages, but at the same time the legislation should be for the entire supply chain, not for any specific country,” she said. “It is time for brands and retailers to change themselves, so that even if they want to hide they cannot.”