Manufacturing’s Lament: Factory Abuses Persist

Despite the development of corporate social responsibility programs, factory monitoring systems and greater overall awareness, the apparel and textile industry still suffers from widespread worker rights abuses and dangerous working conditions throughout the supply chain.

A new report, “Free2Work, The Story Behind the Barcode,” from Not for Sale, an international antihuman trafficking organization, charges that people can be found in modern-day slavery and unsafe working conditions even in some key global apparel production hubs, and six countries are known to use child and/or forced labor at the cut-make-trim level. Citing the U.S. Labor Department’s “List of Goods Produced by Child Labor or Forced Labor, 2011” report, the countries include China and India, both top 10 global exporters, as well as Argentina, Jordan, Malaysia and Thailand.

The study, funded by a grant from the U.S. State Department, said due to decades of international exposure, child and forced labor is less prevalent in export apparel factories today than it was 20 years ago. But a lack of traceability and accountability throughout the production cycle has left workers and companies vulnerable to the worst of abuses — forced and child labor, and a system that leaves itself at risk to the extremes in unsafe conditions, as evidenced by the factory fire this weekend in Bangladesh, the latest in a string of blazes that has killed hundreds of apparel and textile workers in Asia.

RELATED STORY: Mourning, Protests in Bangladesh Even as Second Fire Breaks Out >>

The Bangladesh fire stirred international condemnation of working conditions in the apparel industry. Tuesday was declared a day of mourning in Bangladesh and garment factories will remain closed. On Monday, thousands of garment workers staged large-scale protests on the streets of Dhaka, according to international wire reports, even as a fire broke out in another garment factory in Uttara, a suburb of Dhaka. There were no casualties, however.

Sourcing giant Li & Fung Ltd. on Monday said it is compensating the families of victims of the fire, which took place at a Tazreen Fashions factory in Ashulia, Bangladesh, Saturday night. The blaze killed more than 115 people. The International Labor Rights Forum has called the fire the deadliest factory fire in the history of the apparel industry in Bangladesh. Li & Fung had outstanding manufacturing orders with the factory when the fire took place.

Li & Fung said it is matching financial assistance from the Bangladesh Garment Manufacturers and Exporters Association by pledging 100,000 Bangladeshi takas, or about $1,200, to each victim’s family. The company also said it is setting up an education fund for the victims’ children.

“Li & Fung confirms the company has placed orders for garments with Tazreen Fashions Ltd. in Bangladesh, which were being manufactured at the premises where the fire occurred,” the company said. “We are very distressed and saddened by the deaths of workers and wish to express our deepest condolences to the families of the victims.”

Li & Fung said it is in contact with the factory owner and will carry out its own investigation of what caused the fire. In September, a fire at an apparel plant in Karachi, Pakistan, killed more than 300 people, and several smaller such incidents have occurred in the region in the last couple of years, making the industry rethink its factory monitoring systems.

Düsseldorf-based C&A said it had a pending order for 220,000 sweaters from Tazreen Fashions for its Brazilian operations when the fire took place.

While the Free2Work report, subtitled “Apparel Industry Trends: From Farm to Factory,” does not specifically address factory fires, it does look at the way more than 300 clothing brands manage their supply chains to address child and forced labor. Most apparel companies covered in the study monitor the working conditions in at least some portion of their cut-make-trim factories. In contrast, the earlier phases of apparel production — including textile production and cotton farming — often remain untraced, unmonitored and out of sight. This opacity, Free2Work says, significantly contributes to the risk of abuse in these production phases. At these levels, child and/or forced labor is documented in six countries: India, China, Pakistan, North Korea, Bangladesh and Ethiopia.

“Much of the apparel we buy in the United States and around the world contains cotton made by people held in modern-day slavery,” said the report. “Sixteen countries are known to use child and/or forced labor in cotton production. Of these, Uzbekistan, Brazil, Pakistan and Turkey are all top 10 global producers.”

The report provides detailed information on 50 apparel companies’ CSR practices, assessing each management system in four categories: Policies, Traceability & Transparency, Monitoring & Training and Worker Rights.

“Each Free2Work indicator correlates with a piece of a system that should, if appropriately used, enable improvement in working conditions and the elimination of modern slavery,” the report said. “We hold that child and forced labor are far less likely in supply chains that are highly visible to companies and where workers have a voice to negotiate working conditions and speak out against grievances.”

Kilian Moote, Free2Work’s senior director of corporate engagement, said, “While it’s clear from the study that egregious labor abuses are occurring around the world, the apparel industry is more active than most in trying to curb them. For example, 54 percent of cut-make-and-trim operations are accredited.”

Wages are of chief concern to workers and payment of a living wage is demanded by virtually every major labor rights group. Free2Work’s data find that while a handful of the CSR management systems correlate with a known improvement in wages, only a small number of brands report guarantees of higher-than-minimum wages at the factory level.

“There is no direct way to measure the existence of child or forced labor in a supply chain,” it said. “However, we do know that where workers are treated fairly, where they have a voice about their conditions and receive adequate pay, modern slavery is by nature far less likely to exist. Beyond this, wages are a critical measure of the decency of a supply chain because they are of chief concern to workers.”

The report looks at 50 key apparel companies’ responses to the issues of child and forced labor. Moote said about 45 percent of the companies participated in the surveys sent to them. Others were assessed by third-party research. Of these, 62 percent have a code of conduct that covers core International Labor Organization principles, 32 percent have taken steps to use responsible purchasing practices and 30 percent have a policy addressing subcontracting and homework.

Among the firms Free2Work assessed, 46 percent use their own internal monitoring system to audit at least a portion of their supply chains. A full 70 percent of companies have elected to contract with a third-party auditor to monitor at least a portion of their supply chains. Some of these also use some internal auditing, and some do not. Unannounced audits provide a more accurate picture of day-to-day operations because abuses cannot be as easily hidden without advanced warning. Workers are best able to express concerns when interviewed off-site, away from management. Only 8 percent of companies assessed report using unannounced visits and/or off-site interviews for the majority of their audits. The Alta Gracia factory in the Dominican Republic was cited for its good monitoring practice while PVH Corp. was cited for its monitoring and training good practice in this area.

In the area of traceability and transparency, only 46 percent of apparel manufacturers have fully traced their suppliers throughout the supply chain, with just 18 percent of textile and raw material makers having done so. Patagonia and Timberland were cited for their good practices in transparency.

In the sector of Worker Rights, 44 percent of companies assessed had a pilot grievance mechanism, 34 percent had base sourcing of decisions on supplier labor conditions, but just 2 percent sourced from suppliers where workers make a living wage. Alta Gracia was also named for its wage good practice, while Asics, New Balance, Nike and Puma were named for their freedom of association good practice.

The report also graded companies on their efforts to guard against the use of child and forced labor in its supply chain. The grades are based on publicly available information and data self-reported by the company.

In assessing a company, Free2Work asked 61 questions about the firm’s production policies and practices. Free2Work assessment questions concern a company’s management of raw materials, inputs and cut-make-trim manufacturing.

Free2Work grades take into account the prevalence of child and forced labor in the countries in which companies report operating. Where companies source from suppliers in low-risk areas, they are graded on a softer curve because it is expected that less stringent management systems are necessary to combat abuse in these regions, particularly where strong national rule of law exists. Free2Work grades are an indication of the extent to which companies have traced their suppliers and established management systems throughout their supply chains.

Moote said while the report aimed to present as an objective analysis as possible, “the grading process inevitably involved some level of subjectivity.”

Overall grades ranged from A ratings for Alta Gracia, Good & Fair, HAE Now, Hanesbrands Inc., Inditex, Maggie’s Organics, Prana and Timberland to F ratings for Armor Holdings, Lacoste, Robinson Textiles Inc., Skechers and Spiewak. When rated for their policies that specifically protect against child and forced labor, A grades were given to Adidas, American Eagle, Eileen Fisher, Esteam, Gap, Good & Fair, H&M, HAE Now, Inditex, Levi’s, Maggie’s Organics, New Balance, Patagonia, Prana, Solidarity (Fair Trade USA line), Timberland and Tompkins Point (FT USA line). Getting an F grade were Armor Holdings, Blauer, Lacoste, Propper, Robinson Textiles, Skechers, Spiewak and Unifirst.

Despite the problems and low grade in many areas and for many companies, Free2Work said, “Most well-known apparel companies now admit responsibility to their supply chain workers, and many are putting resources into facilitating change, even at the inputs and raw material levels of their supply chains, where modern slavery is most rampant. Our hope is that the trend will continue, and that companies will use our ratings and analysis to improve, and to follow today’s best-practice leaders into creating concrete improvements for workers tomorrow.”