Fair fashion is about fundamental rights
An independent not-for-profit foundation, the Netherlands-headquartered Fair Wear's mandate is to work for a world where workers in the garment industry realise their rights to safe, dignified, properly paid employment. Claiming independence with a multi-stakeholder tripartite board in which business associations, trade unions and (labour) NGOs are equally represented, Fair Wear has been working actively since the outbreak of the pandemic to guide brands on issues related to responsible purchasing practices, loss of jobs, wage guidance, and ensuring safe workplaces. Fair Wear is working with 140+ member brands and it engages directly with factories, trade unions, NGOs and governments to find answers to problems which many could think are unsolvable. Alexander Kohnstamm, executive director, Fair Wear Foundation, in conversation with Paulami Chatterjee.
The pandemic has hit factories worldwide and rendered countless across the textile value chain jobless. How is Fair Wear helping the impacted deal with this blow?
When the pandemic hit, Fair Wear immediately acted to guide and support our member brands to do as much as possible to protect workers from starving or perishing to the virus and prevent factories from going bankrupt. We developed a set of guidelines for brands that you can find on our website in the covid-19 dossier and that is still being updated. We guide brands on topics like responsible purchasing practices, loss of jobs and wage guidance. Our covid dossier was probably the fastest and most comprehensive guidance at the time. It was widely used in the industry well beyond our membership and is still an important resource. We also actively aligned other organisations so that we could come with a clear and unified voice on what we believe is acceptable brand behaviour and what is not. This has helped raise the bar at a time that many saw only as a race to the bottom. But obviously, many brands in the sector are in great difficulty as well - although this also varies greatly based on the type of product they sell.
We work with our brands to help ensure they uphold contracts, stick with their suppliers, buy the products they already committed to buying and pay for these on time, and not renegotiate existing payment terms. If possible, they should place new orders and prepay a first instalment to cover the working capital their suppliers need to start producing.
When a factory was forced to close or/and is still struggling to pay its workers, brands should act to redress loss of income and support suppliers to help pay wages, especially if they take up a high percentage of their production capacity or if they own the factory.
Brands need to map where jobs are at risk or have been lost and identify loss of wages. Subsequently brands can calculate the gap between available funds and total funds needed to pay workers what they need, and act to redress lost wages and jobs.
The protection of workers against covid-19 is of the utmost importance. Keeping workers safe needs to be top priority amongst both clothing brands, their suppliers and labour unions as worker representatives. Investments that are needed to make it a safe workplace (PPE, infrastructure provisions) must be integrated in a brands' costing too. We have also worked with brands to find alternatives for in-person factory visits, and our local teams have done what they could when it was possible to assist on-site.
What steps does Fair Wear take to educate the end consumer for them to adopt mindful and fair consumption?
We are working with our member brands to create awareness about the current garment industry overall that it is not sustainable because it places enormous pressure on natural resources and human rights in the supply chain. The crisis magnifies that the clothing industry is notoriously competitive in terms of delivery time and price. Consumers expect cheap and everchanging clothing collections. That increases the pressure on all players in the supply chain.
Recently we have done a joint social media campaign around Black Friday to create awareness of human rights violations in this industry and share solutions, that are also easy to adapt for consumers. We asked our audience if they were ready to play their part in making fashion fair for everyone. Because aside from supporting garment workers, shopping in a people-friendly way will also make us look and feel good - and that' s what we want from our clothes, right? So, on #BlackFriday we asked: If you're going to shop, shop consciously. At this moment we are preparing to join the Fashion Revolution campaigns to reach as many as possible, working with our brand and social influencers to share our sustainable message.
Having said all that, I want to be clear that we should not expect the consumer to change the industry. The consumer has not asked for cheap, throw-away fashion - this is an industry invention and should be solved by the industry. Now that it exists, of course most consumers fall for the good deals on offer often as citizens and even as voters - we are all for sustainability, but when we enter a shop… So, it is really the industry that must change, helped by the regulatory environment and other key actors like investors, like banks who give interest rate discounts to sustainable businesses, like institutions with big tenders to buy uniforms etc.
What does your Code of Labour Practices cover? How do you act on the complaints received via the Fair Wear Foundation (FWF) complaints mechanism?
The basis of the collaboration between Fair Wear and a member is the Code of Labour Practices (or Labour Standards). The core of this code is made up from eight labour standards derived from ILO Conventions and the UN's Declaration on Human Rights. This means the Fair Wear Code of Labour Practices is strongly based in the internationally recognised standards which have been set through tripartite negotiation.
Our labour standards:
1. Employment is freely chosen
2. Freedom of association and the right to collective bargaining
3. There is no discrimination in employment
4. No exploitation of child labour
5. Payment of living wage
6. Reasonable hours of work
7. Safe and healthy working conditions
8. Legally binding employment relationship
(More detailed information can of course be found online or through individual follow-up.)
About our complaints system:
In all ten production countries where Fair Wear is active, our local teams make sure any individual worker can file a complaint, in their local language, when they feel their rights as workers have been violated. This independent, multistakeholder grievance mechanism is unique in the sector. Working together with our member brands, we work hard to address any complaints that the helplines bring to light.
When garment workers feel that their rights are being violated, or when others see this happen, they can file a complaint. This is done through a complaints handler. The complaints handler speaks the local language, which allows workers to voice their concerns comfortably and effectively. When a complaint is filed, we immediately inform the member brand(s) it involves and launch an investigation. If the investigation shows that the complaint is grounded - i.e. evidence was found in support of the complaint - we require our member brand to work together with the factory to fix the problem. This process usually involves factory management and worker representatives. We encourage our member brands to identify and address the root causes of the problem to ensure it does not happen again. Throughout our complaints handling process, all efforts are taken to safeguard the anonymity of the complainants. This helps to ensure workers' trust and comfort in the system and protects them from potential retaliation.
In an equally unique effort towards transparency, all complaints are published on our website. This acts as a living record of what our member brands are doing to address and resolve any issues that arise at their factories. This is also used as input for brand performance checks and factory audits.
Our complaints system does not replace a factory' s own internal grievance mechanism, but rather acts as a safety net when all other options fail or are not trusted by workers. It also allows our brands to have deeper insights into what is happening in their supply chains, and to deal directly with issues as and when they arise. A complaints system is one aspect of a comprehensive monitoring system that brands use to stay informed about working conditions in their supply chain.
How have goal posts of brands altered since the pandemic began?
How badly brands are struggling depends on their business model and products. Some sportswear brands, brands that produce homewear and workwear did quite well. Fashion and promotional wear were hit extremely hard. Some brands are starting to recover, while there are also brands that are on the verge of collapse. The situation of a brand obviously has a direct effect on its suppliers and therefore the workers producing its products.
The impact on workers is multidimensional and exacerbated on existing systems. For example, workers were not informed about changes in policy or measures taken by the factory, which shows a lack of social dialogue. Workers' voices were rarely heard. During the crisis we have been focusing more strongly on dialogue and relations with suppliers. We have adapted the implementation of our Performance Checks to specifically assess how member brands responded to the pandemic. We have also been stronger in addressing the power-imbalance between brands and suppliers, starting with contracts that put all the financial risks and liability on suppliers - something we will more explicitly address in the next round of Performance Checks, which will start soon.
As the pandemic ebbs and flows, do you see any change in behaviour of brands in the way they are making clothes and handling their supply chain?
I think the pandemic has made it even more clear that having strong CSR, due diligence systems and practices in place, makes you much more resilient as a business. Long-term relationships with suppliers, key to successful sustainability efforts, also prove to be good for the reliability and flexibility of your supply chain. And from a financial point of view, these two due diligence ingredients (strong systems and long-term relationships) have shown to reduce risk and thus support the bottom line. So, it is not only the leadership of the brands that now sees how due diligence is good for business, also investors and banks are making this an active part of their assessment of companies they finance. Not to mention large retailers, which also have a clear interest in the reliability of the brands they sell.
After being in crisis mode at first, many of our members quickly started to return to getting in touch with their suppliers, set up remediation plans and look for joint solutions with their partners. There are still a lot of issues that need to be resolved, but our brands are finding ways together with their factories to mitigate the negative impact of covid-19 on workers. Fair Wear being such a high standard has meant that Fair Wear members do relatively well despite the challenges.
We've clearly seen that it helped Fair Wear members that already had systems in place to ensure responsible sourcing. When the crisis hit, they could rely on their systems to come up with a proper response. They engaged with their suppliers about the impact of covid-19 and worked together to find solutions.
Of course, the pandemic also required our members to be flexible and change their approach. For example, they were no longer able to visit the factories and verify the factory situation through audits, while it was clear that many issues arose in factories due to covid-19. They had to check with suppliers, workers, or other local organisations how the factory responded to issues, such as on payment of (legal minimum) wages, health and safety, and a loss of jobs. They had to put more effort in mitigating the negative effects of covid-19. Something we helped them with actively, of course.
Several of our members already let us know that this pandemic has led to more trust and a closer partnership with their factories as they were in this together and actively had to find solutions together.
We look forward to the coming Brand Performance check reports where we assess the earlier response of the brands to the covid-19 pandemic. This will also provide us with a deeper insight on how brands responded to the crisis and how the crisis impacted the brands, suppliers and factories.
Some good practices of our brands:
In recent Brand Performance checks that we did, we also found several good practices. Members supported their suppliers by pre-paying orders, paying for fabrics, splitting orders.
- With the decision to bring forward regular re?orders and prepay invoices, Hessnatur supported its suppliers with liquidity problems caused by order cancellations from other clients. It also helped to balance the suppliers' capacity. The company has also shown a proactive attitude by initiating cooperation with other Fair Wear members to gather and share information - extra useful when information was hard to get.
- Maier Sports provided support by covering all additional transport costs due to delay, providing support in the organisation of face masks and testing systems and pre-financing fabrics to help suppliers with cashflow problems.
- Immediately after the start of the covid?19 crisis, Deuter's CEO contacted the management of all main suppliers. In this email it was announced that no orders would be cancelled, and extra prepayment was offered to ensure cashflow for the income of the workers. A substantial loan/prepayment was offered to the main supplier in Vietnam, to ensure proper cash flow. Management and the CSR team remained in close contact with the suppliers and checked the situation frequently, also the impact on workers' income.
When you share your findings and recommendations for improvement with brands, how forthcoming are they to implement the same? What are the check mechanisms to ascertain if conditions have improved, and continue to do so?
Last but not the least, it should be mentioned that our local teams have excellent contacts with local stakeholders including primarily labour unions and labour rights organisations, but also employers' organisations and relevant authorities. This too, makes our grievance mechanism uniquely effective.
Our complaints mechanism for the workers in the factories has been very important. We were able to maintain this during the crisis, even though we were no longer able to be in the factories. Complaints provided us with necessary information about what was going on in the factories.
Since India is one of your focus countries, what are some of the changes you would like to see in the Indian labour laws? What are some of the actionable suggestions in this regard?
The new labour code allows easy hire and fire of workers. In case of retrenchments, a workplace employing less than 300 workers can lay off their workers without prior government approval. This makes workers more vulnerable to uncertainties and further threatens their job security. In the current law, workers could only lay off workers without prior government approvals.
The Industrial Relations Code introduces more conditions restricting the rights of workers to strike. If unions must strike, they should give 60 days of notice. Such clauses are debilitating the power of union. A trade union with at least 51 per cent of the workers as members will be the sole negotiating union with the factory - is also a very high threshold considering that the current rate of unionisation in the industry is under 5 per cent.
The government should have talked about raising the minimum wage of workers but instead in the new labour codes it talks about national floor wage. This will mar any positive movement on wages by the business. Moreover, the new labour code allows deductions (not exceeding 50 per cent) from an employee's wages on grounds including fines, absence from duty, accommodation or recovery of advances given to employee, among others while the current law did not allow any deduction as fine from the minimum wage.
We would like to allow fertile ground for unions for them to flourish and negotiate with businesses. Membership threshold to form unions and be recognised by a factory should be lowered to at least 30 per cent. A healthy union environment takes care of all labour violations or harassment that takes place in workplaces.
Also, the government should make an effort to push the wage closer to living wage. Living wage should find a mention in the labour code. Effective implementation of social security for all workers will cushion the workers from adverse impact of hire and fire practice that is allowed in the code.
Freedom of association faces most resistance from business community and from government. There is a myth that trade unions lead to closure of business so they should be kept at bay. This mindset can be changed by active and facilitated discussion between businesses and trade unions about each other's role and the importance of having trade unions for a happy and heathy workplace.
What are some of your findings related to garment workers the world over? Which countries require major uphauling in terms of handling workers at garment factories?
Workers' rights have come under even more pressure than before, despite several government support packages designed to alleviate some of that pressure. They lost wages or even their job, had to work in unsafe conditions, while trade unions had difficulties in reaching their workers, mobilising and organising them. Research has shown that violence and harassment increased, as is the rate of workers in debt.
We also saw, for example in Indonesia, that factories used the pandemic to change contracts of workers and turning permanent workers in contractual workers, without paying them the corresponding severance payment. We have also seen workers struggling to find new employment and often ending up in the informal sector where it is much more challenging to monitor working conditions.
Some countries have changed laws to deal with the economic impact. For example, payment below the legal minimum wage is now also possible in Indonesia. In Vietnam, the government has postponed minimum wage increases.
Also in Europe, garment workers are struggling. In some garment factories in North Macedonia, for example, workers have been laid off for invalid reasons, they have not been paid even a minimum wage and they have been forced to work during the lockdown. One of the big problems in the garment sector is that much of the work can easily be changed from one supplier to another. For many products, the brand can freely choose and thus change between factories, regions and even countries. This is a basis for a race to the bottom, in which countries find themselves hostage to brands interested only in obtaining the lowest price for a similar product.
We need stronger laws and better enforcement in most or all production countries, but just as importantly we need to make sure all brands adhere at least to the minimum level of due diligence and responsible business practices - as specified by authorities like the United Nations, the ILO and which can all be found in the OECD Due Diligence Guidance for Responsible Supply Chains in the garment and footwear sector. Mandatory due diligence regulations that are now under way in the EU are a great step in that direction. Trade treaties can also help. But above all, the industry itself must raise the bar for human rights -which also leads to a level playing field for businesses that already choose to behave responsibly.
What are your long-term goals?
We know there's a better way to make clothes. A way in which workers feel safe and respected and receive a salary that is enough to provide for their families. We are pushing to make this the new normal. We believe it is possible to push the industry to a tipping point in the next few years: a point of no return on the road to fair, sustainable garment production. We have a comprehensive strategy to achieve this, shaped with our partners in trade unions, business, government and larger civil society. With our member brands and with support from the Netherlands Ministry of Foreign Affairs, we will be working on all elements of this strategy.
However, we also know fully well that many more parties are needed to achieve this goal. That's why it is not just our strategy, but a strategy for the industry at large. A strategy to work together, move together in the direction that we set together. So, we started the year by co-facilitating a high-level event called The Industry We Want, that included the leaders of relevant international organisations, trade unions, industry, investors, NGOs and other key actors. Together we intend to formulate a common purpose of the industry, set metrics to measure progress, and provide a space for joint accountability on progress towards the goals.
Our member brands are doing advanced work. But we need all brands to join the movement. Surely, as I mentioned before, good EU regulation on human rights due diligence will be of great support in that because it means that any brand selling in the EU needs to do what it can to prevent human rights violations in its global supply chains. We must all band together to make sure social responsibility is no longer seen as an optional add-on, a favour we are providing to garment workers. Because fair fashion is about fundamental rights.
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