APPAREL

Themes Key Findings

2018 Apparel & Footwear

The 43 Apparel and Footwear companies were assessed across the benchmark's seven themes, which were developed to capture the key areas where companies need to take action to eradicate forced labor from their supply chains: commitment and governance; traceability and risk assessment; purchasing practices; recruitment; worker voice; monitoring; and remedy. There are a total of 23 indicators across the seven themes. Each theme is weighted equally and determines the company's overall benchmark score on a scale from 0 to 100.

37

Overall Score 2018 Apparel & Footwear
26 Theme Score

Summary of Results

Worker voice is among the lowest scoring themes of the benchmark. Less than half of the companies disclose a grievance mechanism accessible to their suppliers' workers and other stakeholders. There is a lack of disclosure by companies on how they are attempting to improve freedom of association for workers in their supply chains.

Worker Voice

Eighteen companies disclose efforts taken to engage directly with workers in their supply chains. Eleven make clear that such efforts are focused on labor rights, and seven companies are able to provide multiple examples of worker empowerment in different supply chain contexts. For example, L Brands discloses that it is engaged with the NGO Pacific Links as part of the Factory Awareness to Counter Trafficking program, which includes workshops on human trafficking for workers, managers, and factory owners in its supply chains, and helps "to establish ethical practices in worker recruitment and retention." The company reports that it has enabled more than 10,000 workers and managers to access this training. Asics discloses that, through its engagement with Better Work, it works with its suppliers to provide training to workers in its supply chains on their labor rights. It has delivered such training to factories in Sri Lanka.

Primark is the only company to disclose a worker-to-worker education initiative in its supply chains; it has partnered with the NGO SAVE to introduce Worker Education Groups in Tirupur to make inter-state migrants in southern India aware of relevant local laws and their workplace rights. Four companies disclose evidence of the positive impact of engaging with their suppliers' workers. Gap discloses that surveys have provided feedback that workers whom it engaged with-in partnership with Better Work-now feel more comfortable reporting concerns and believe that workplace grievances are being resolved more effectively than before. The company also discloses data from worker surveys which show that its suppliers' workers' feelings of value and engagement and their rating of management practices have largely increased since it began its worker-engagement program.

Freedom of Association

Companies in the sector do not typically engage with suppliers or unions on the issue of freedom of association in their supply chains. However, it is clear that apparel and footwear companies are taking more action on this theme than companies evaluated in the ICT and food and beverage benchmarks, where fewer than five companies disclose working with suppliers to support freedom of association in their supply chains.

Some leading apparel and footwear companies demonstrate good practices relating to freedom of association. Ten companies report that they work with their suppliers to improve their practices regarding freedom of association, and six companies provide evidence that they have improved freedom of association for their suppliers' workers by disclosing examples of actions taken in different supply chain contexts. Adidas reports that, in countries where independent trade unions are able to form, more than 80% of its suppliers have unions. It states that, in Indonesia, 90% of its suppliers are unionized and 80% have collective bargaining agreements in place; additionally, 100% of its Brazilian suppliers are unionized and have individual, collective bargaining agreements in place. The company also discloses several remedial actions taken in relation to freedom of association in response to complaints submitted through its grievance mechanism. For example, the company reports that one of its Cambodian suppliers agreed to reinstate union leaders who appeared to have been demoted due to their union membership to their previous positions and to pay back deducted wages and benefits.

Li & Fung discloses an industrial relations project developed in collaboration with the NGO Just Solutions for its Bangladeshi suppliers. The project includes training for middle management on topics including freedom of association, participation committees, and grievance mechanisms. The project has been piloted in 232 factories, and the company has committed to expanding it in 2018. Twelve companies work with local or global trade unions to support freedom of association in their supply chains. H&M reports that it met with IndustriALL in Bangkok to discuss the progress and challenges of the Global Framework Agreement, which the company first signed in 2015. The company discloses that it has set up National Monitoring Committees in its production countries to implement the Global Framework Agreement, composed of local IndustriALL trade union representatives and H&M representatives. Only six companies (Adidas, Burberry, Gap, H&M, Inditex, and Ralph Lauren) provide information on how they ensure alternative forms of organizing in locations where freedom of association is constrained or prohibited.

Grievance Mechanisms

Twenty-seven out of 43 companies disclose a grievance mechanism which is available to their suppliers' workers. However, only 17 companies disclose a grievance mechanism which is accessible to suppliers' workers and also to other stakeholders, such as unions or local NGOs. This includes hotlines which allow complainants to contact the company directly, a requirement for suppliers to have such hotlines in place, and mechanisms operated by external third parties. Since 2016, Fast Retailing, Lululemon, and Under Armour have established hotlines for their suppliers' workers to contact the company directly. Only 13 companies disclose how they communicate the mechanism to their suppliers' workers. H&M distributes its contact details to local trade unions, which can then provide the details to its suppliers' workers. It states that any grievances are followed up on by local teams in the country, often in collaboration with IndustriALL.

Some leading companies disclose grievance mechanisms which they have set up with a view to addressing specific risks in their supply chains. Burberry discloses that it has introduced confidential, NGO-run hotlines in southern China since access to grievance mechanisms is a particular challenge for workers in the region. It states that the hotline provides a means of submitting complaints as well as offering emotional support and information on labor rights. Since 2016, Inditex reports that it has set up a hotline for workers in Brazil to address the risk of exploitation of migrant workers. Disclosure of data on grievances and the operation of the mechanism is poor, with only seven companies reporting on the type and number of grievances filed. Puma discloses that, in 2017, it received 81 complaints from its suppliers' workers, which included issues related to fair compensation (43%), employment relationship (35%), and excessive working hours (7%). It further discloses it received ten grievances from third-party organizations, focusing on freedom of association (46%) and fair compensation (18%) in its supply chains. Disclosing such information allows stakeholders to understand whether a company's grievance mechanism is effective and used by workers in its supply chains.

Only four companies (Adidas, Lululemon, Under Armour, and VF) show that their grievance mechanisms are available to and used by workers below the first tier of their supply chains.

Communication of Policies

Less than half of companies (20 out of 43) disclose that their supply chain standard addressing forced labor is available in the languages of their suppliers' workers, and only then publish the policy in those languages on their websites. Twenty-four companies provide some information on how they ensure their supply chain policies are communicated to workers in their supply chains, such as by displaying posters within supplier facilities. Primark, for example, discloses that it has worked with local NGOs in China, Bangladesh, and India to develop posters for factories which visualize the principles of its supply chain standard.

Communication of Policies

The company ensures its human trafficking and forced labor policies and standards are available to supply chain workers in their native languages, and that its human trafficking and forced labor policies and standards are communicated to workers in its supply chains.

The company ensures: (1) its policies and standards, which include human trafficking and forced labor, are available in the languages of its suppliers' workers; and (2) its human trafficking and forced labor policies and standards are communicated to workers in its supply chains.

Low: 0
High: 100
45

Worker Voice

The company works with relevant stakeholders to engage with and educate workers in its supply chains on their labor rights. To ensure scalability and effectiveness, the company ensures that there are worker-to-worker education initiatives on labor rights in its supply chains, and it provides evidence of the positive impact of worker engagement in its supply chains.

The company: (1) works with relevant stakeholders to engage with and educate workers in its supply chains on their labor rights; (2) ensures that there are worker-to-worker education initiatives on labor rights in its supply chains; (3) provides evidence of the positive impact of worker engagement in its supply chains; and (4) provides at least two examples of worker engagement initiatives covering different supply chain contexts.

Low: 0
High: 100
15

Freedom of Association

To support collective worker empowerment, the company works with suppliers to improve their practices in relation to freedom of association and collective bargaining, and with local or global trade unions to support freedom of association in its supply chains. Where there are regulatory constraints on freedom of association, the company ensures workplace environments in which workers are able to pursue alternative forms of organizing.

The company: (1) describes how it works with suppliers to improve their practices in relation to freedom of association and collective bargaining; (2) works with local or global trade unions to support freedom of association in its supply chains; (3) ensures workplace environments in which workers are able to pursue alternative forms of organizing (e.g., worker councils or worker-management dialogues) where there are regulatory constraints on freedom of association; and (4) provides at least two examples covering different supply chain contexts of how it improved freedom of association for supply chain workers.

Low: 0
High: 100
18

Grievance Mechanism

The company ensures a formal mechanism to report a grievance to an impartial entity regarding labor conditions in the company's supply chains is available to its suppliers' workers and relevant stakeholders. The company ensures that the mechanism is effective across its supply chains.

The company: (1) ensures a formal mechanism to report a grievance to an impartial entity regarding labor conditions in the company's supply chains is available to its suppliers' workers and relevant stakeholders; (2) ensures that the existence of the mechanism is communicated to its suppliers' workers; (3) ensures that workers or an independent third -party are involved in the design or performance of the mechanism, to ensure that its suppliers' workers trust the mechanism; (4) discloses data about the practical operation of the mechanism, such as the number of grievances filed, addressed, and resolved, or an evaluation of the effectiveness of the mechanism; and (5) provides evidence that the mechanism is available and used by workers below tier one in its supply chains, or by relevant stakeholders in key supply chain contexts.

Low: 0
High: 100
24

Freedom of Association: Notable Example

Nike

Nike discloses that it advocates for legislative reform on freedom of association in Mexico with a view to achieving full protection for workers' rights. It states that it has engaged in dialogue with the national government in collaboration with the Fair Labor Association and other brands and retailers.

Recommended Action

Worker Voice

Work with stakeholders to engage with workers in supply chains to ensure they understand and are able to exercise their labor rights. Engagement could be undertaken in collaboration with suppliers, local labor NGOs, and/or unions. When using technologies such as mobile phone apps to engage suppliers' workers, companies may wish to consider following the WEST Principles to ensure meaningful engagement.