Profitable Apparel Companies Asked to Pay Supply Chain Workers
31 March 2021
KnowTheChain’s monthly newsletter shares worker perspectives, the latest from the KnowTheChain team, and updates and resources on forced labor in supply chains in the business and human rights sphere.
The Clean Clothes Campaign has partnered with trade unions and labor rights organizations in a global campaign to demand immediate relief for garment workers and reform of the apparel and footwear industry. Workers are estimated to have suffered wage losses of at least US$3.2 billion from the first three months of the Covid-19 pandemic after cancelled orders. The #PayYourWorkers campaign calls on companies that have profited during the pandemic to establish a severance fund by paying manufacturers $0.10 more per t-shirt so that workers receive their full wages and are guaranteed severance pay if jobs are cut.
KnowTheChain has published an analysis of ICT companies’ supply chain relationships, showing that ICT supply chains are highly interconnected and are linked to forced labor risks through a multitude of relationships. The analysis shows that buyers with strong supply chain policies are often linked to low-scoring suppliers that may not address forced labor risks in their own supply chains. ICT companies must implement responsible purchasing practices, adopt a worker-centric due diligence approach, and ensure remediation of rights violations to address forced labor risks in lower tiers of their supply chains.
Forced Labor: The Latest Developments
The US Customs and Border Patrol issued a forced labor finding on Top Glove, the result of a months-long investigation, banning imports of disposable gloves produced by the company in Malaysia.
In the wake of sanctions imposed by the EU, UK, US, and Canada on officials reportedly implicated in the mass internment of Uyghurs and other ethnic minority Muslims in Xinjiang, Western apparel companies including H&M and Nike face backlash over statements on the use of forced labor in the region. A number of Chinese apparel companies announced they will continue to source Xinjiang cotton. Some global companies sent conflicting messages, initially noting support for Xinjiang cotton. These statements were later retracted by Asics and Hugo Boss; with no clarification from Fila. Other apparel companies including Inditex and PVH removed earlier statements made about Xinjiang from their websites. Ryohin Keikaku, owner of the Muji brand, noted that its audits did not identify forced labor in Xinjiang. While the Better Cotton Initiative suspended the use of Xinjiang cotton in October, the China branch of the Better Cotton Initiative has stated that it found no signs of forced labor in cotton production in Xinjiang.
85 New Zealand companies have signed a joint letter urging the government to instigate an inquiry into whether New Zealand needs a Modern Slavery Act.
Cotton workers in Uzbekistan have formed the first independent trade union, “a significant turning point in the fight to protect labor rights and eradicate forced labor in the country,” according to Cotton Campaign. Yet workers face intimidation.
For further news on forced labor in relation to business and human rights see the Business & Human Rights Resource Centre website.
The Business & Human Rights Resource Centre has assessed company efforts to address forced labor in Pacific supply chains of canned tuna. The report builds on a survey of 35 canned tuna brands and supermarkets carried out two years ago to assess how their human rights approaches have developed. It finds a lack of progress on oversight of recruitment, remediation plans, and actions to mitigate heightened risks of forced labor resulting from Covid-19.
A study of the Business & Human Rights Resource Centre, Wikirate, and WalkFree finds that only 47% of asset managers are compliant with the UK Modern Slavery Act and only 27% disclose conducting human rights due diligence in their portfolio.
Oxfam launched a report to revisit the commitments made by companies in response to its Behind the Brands campaign between 2013 to 2016 which aimed to strengthen the social and environmental sourcing policies of the ten largest food and beverage companies in the world. The report assesses companies on the implementation of their sustainability commitments and finds that companies’ efforts at the global level do not adequately filter down to different sourcing country and supply chain tiers.