Are brands and suppliers doing their due diligence in eliminating human rights violations from their supply chains? Not nearly as much as they need to as speed to market and other bottom-line related pressures — driven by brands — keeps the industry from reaching full compliance.
Human Rights Watch, the New York-based international non-governmental organization championing for human rights, released a 66-page report on the effects of time constraints and cost-cutting methods by factories, which are incentivized by power-wielding brands. As the report notes, brands are still responsible for inadequate transparency and disclosure within their supply chains, leaving factory workers vulnerable to abuses. There’s finger-wagging at brands who splinter poor sourcing and purchasing practices, among other decisions, to muscle alongside the pace of fashion change.
Recently marking the sixth anniversary of the Rana Plaza disaster in Dhaka, Bangladesh, in April 2013 that claimed 1,138 worker lives and injured 2,000, there is sharp focus on addressing labor injustices. The report includes interviews with South and South East Asian garment suppliers, social compliance auditors, garment industry experts, numbering decades of experience and garment workers. Workers were interviewed in Bangladesh, Cambodia, India, Myanmar and Pakistan. The report also includes trade export data analysis from Asia.
Better Workplace Conditions, Come at a Price
The beginning of the degeneration of factory conditions may be traced to one thing: money. With a relentless focus on speed and cost, brands squeeze suppliers tightly, or threaten to take their business elsewhere, thus fostering workplace abuses. According to a 2016 collaborative report published by the International Labour Organization, “Seventy-eight percent of apparel suppliers said price remained the ‘main criterion’ brands used when placing orders, while just 47 percent said working conditions were factored into the decision.”
As a result, there’s no room for negotiation when buyers have countless options to produce their goods. “You can’t pay for a bus ticket and expect to feel like you are flying,” in the words of an Indian supplier, who described the impossible pressure to appease demands and maintain quality and labor compliance.
Regarding worker wages, brands must reflect statutory minimum wages even despite a repeat order. “If you are a brand that says you care about social and labor conditions, most likely you are paying attention to the labor markets where you are doing business. Some brands just don’t and that’s really the problem,” said Shelly Gottschamer, an expert with more than two decades of sourcing experience. Minimum wages may not always be living wages.
Time Is Money
All human rights seem to be out the window when it’s crunch time. Suppliers cite “shortened lead times, penalty clauses and payment delays” as factors determining where buyers place orders, but all of these factors spread suppliers thin. One Pakistan-based supplier told Human Rights Watch that some products, for which lead time was traditionally more than 60 days about five years ago, is now expected to be produced within a month. Soliciting buying agents can also shorten the time available for production when said agents take weeks to transmit purchase orders to factories. Factoring in the time it takes for suppliers to gain brand approval on fabric, color swatches and samples extend the time in production, too. Nearing the deadline, suppliers face expensive air shipment to meet agreed-upon delivery windows or subject workers to overtime because of orders.
“It’s cheaper for me to get workers to do overtime work and try and meet the delivery date for shipment than be delayed and pay for flight costs,” said one supplier in Pakistan.
According to Better Buying Purchasing Practices data in fall 2018, “about 65 percent of buyers adhered to payment terms and cleared bulk invoices on time,” but delays added anywhere from 21 to 100 extra days from the agreed upon date to make the payments. Sanctioning voluntary standards of repayment may ensure brands take the willing steps toward better business practice. The U.K. Prompt Payment Code exemplifies three key commitments to good business practice which include: to pay suppliers on time, give clear guidance regarding payments and encourage good practice is adopted throughout their supply chains.
Who Wields the Power?
Fueled by brands’ pressurized purchasing behaviors, the worker is undercut and over-stressed. Widespread violations exist with respect to worker safety (including safe workplace conditions and the individual well-being of workers), human resources (regarding fair wages and hiring practices) and related concerns.
A factory in Myanmar cited “stolen minutes” whereby an “hourly” production target was set, in reality, for every 45 or 50 minutes. Refusal to award overtime pay, double bookkeeping to shield overtime hours or the barring of workers to “freely form or join unions” further persists at factories in each of the five surveyed countries: Vietnam, Indonesia, Lesotho, Jordan, and Haiti. Human Rights Watch analyzed apparel export data from Pakistan to the EU and the U.S. between 2011 and 2017, revealing that for the top five product categories, “the nominal U.S. dollar price per garment was largely stagnant,” despite the Pakistan government consistently raising the minimum wages.
Citing the “jail-like atmosphere” at her workplace in a Pakistani factory producing for international brands, Fawzia Khan, a 24-year-old unmarried female worker had been banned, along with her peers on the sewing floor, from bathroom breaks, water breaks, standing breaks and even “the hour” break she is supposedly entitled. It is only 30 minutes, in practice. If workers do take breaks, they are ridiculed and reprimanded. The norm is overworking, with sudden demands, and often without overtime pay. When Nay San Lin, a 19-year-old male worker, tracked the course of the hourly production targets over one month in mid-2018 at his employer, a Myanmar factory, 100 pieces became 120 and then 200 pieces. With that, sexual harassment and verbal abuse run rampant because of “underlying pressure” from brands’ purchasing practices. Thus, suppliers respond by trying to push production forward at an unreasonable pace.
“Stuffy environments without proper ventilation” are commonplace, and basic human rights, are increasingly inaccessible to women workers, where facilities lack sanitation products, facilities and freedom to tend to their needs. Although progress has been made in Bangladesh, for example, on fire and building safety since, much work remains across the supply chain. Individual factory remediation is dependent on brands’ financial contributions, but to the supplier’s detriment. Few buyers would invest the necessary funds in restoring one factory if they can go next door.
Bartering worker livelihood in order to cut costs and fulfill orders is the worst case scenario when brands extort suppliers and fail to take responsibility in the face of disaster. What does it look like when a brand maintains responsibility? They offer flexible delivery schedules, assume the cost of air freight, waive financial penalties and construct mutually feasible written manufacturing contracts. The UN Guiding Principles state companies should horizontally integrate human rights into “all relevant business functions,” including sourcing and purchasing decisions. Third-party auditing and surveying, as urged by the OECD Due Diligence Guidance on Garments, should engage both buyers and suppliers (anonymously) for better understanding. On top of that, brands should track compliance, pledge transparency and instill key performance indicators to uphold human rights standards.
Supplier compliance is necessary for meaningful change to occur, but ultimately brands are responsible for the choices they make in their supply chains.