Jessica McGoverne
Director of Corporate Affairs Sedex
Pandemic hits site auditing, sedex rebuilds risk tool
Sedex is a leading ethical trade membership organisation working with businesses to improve working conditions in global supply chains. Headquartered in London and with offices in multiple continents, it provides an online platform, tools and services to help businesses operate responsibly and sustainably, protect workers and source ethically. Its director for corporate affairs Jessica Mcgoverne spoke to Dipesh Satapathy on supply chain issues.
How has the pandemic affected the textiles and apparel supply chain worldwide?
The covid-19 pandemic has had severe economic and health impacts on the apparel, textiles and footwear sectors and their workers.
Earlier this year, Sedex published a report on the impact of covid-19 on businesses based on responses from over 3,300 of our members and included a section on the garments and footwear sector. We will be publishing another report shortly in November on the latest impacts reported by businesses.
In our first COVID-19 Impacts Report, 68 per cent of businesses in the apparel and footwear manufacturing sector expected a significant decrease in revenue because of the pandemic. This percentage is even greater for businesses in this sector located in major apparel-producing nations like India (88 per cent), Turkey (83 per cent) and Bangladesh (77 per cent). Some retail brands have halted orders or withheld payment for orders already completed, depriving workers of crucial income. Garment workers in Asia, for example, have been deprived of up to $6 billion in wages across March-May this year.
Our latest survey finds that 86 per cent of supplier businesses in the manufacturing of apparel and 62 per cent in textiles have suffered decreased orders. The sectors also saw low shares of respondents reporting extending leave entitlements (17 per cent and 15 per cent respectively) to support workers during periods of illness, allowing them to be on leave for longer.
A significant proportion of businesses (60 per cent) in apparel manufacturing reported workers taking time off for care duties. With women far more likely than men to bear the brunt of caregiving duties, our findings support recent humanitarian research that suggests women are more negatively impacted by the pandemic than men, with the impacts widening systemic gender related inequalities.
A figure calculated recently by the Centre for Global Workers' Rights (CGWR) and the Worker Rights Consortium (WRC) estimates that garment factories and suppliers from across the world lost at least $16.2 billion in revenue between April and June this year as brands cancelled orders or refused to pay for clothing orders they had placed before the coronavirus outbreak.
Has transparency and certification/ auditing across the supply chain also been affected because of the pandemic?
Yes. The pandemic itself (e.g. safety measures, site closures and increased pressure on sites) and its effects like restriction on movement has dramatically affected the ability to audit sites. Sedex saw a 50 per cent decrease in the number of Sedex members ethical trade audits (SMETA) in April-June compared with the same period last year.
Transparency in supply chains is a continual challenge for businesses, both during and outside of crises like the pandemic. Supply chain visibility is critical for addressing challenges like illegal subcontracting, corruption, worker safety and worker vulnerability (e.g. protections available for migrant workers).
We have released Virtual Assessment and other tools to address these issues during the pandemic. In these uncertain and disruptive times, it is more critical than ever that companies can maintain and increase supply chain transparency and get an up-to-date understanding of their suppliers' operations, so that they can continue to source responsibly and assess working conditions. Site assessment is an integral part of this.
What steps are needed to make the supply chain robust and minimise the damage in the future?
The steps Sedex recommends include general best practice for buyers and suppliers, across their own operations and in their approach to collaborating with each other.
Developing, increasing and maintaining supply chain transparency is essential at all times, for robust business operations at all times and for supporting both suppliers and their workers in times of crisis. We strongly recommend that all businesses increase the knowledge of their suppliers beyond the first tier of supplier relationships.
Visibility of suppliers across the entire supply chain then allows a business to conduct targeted site assessments and risk assessments. An understanding of inherent and systemic risks within countries and industries allows a business to take action to mitigate risk, while site assessments allow issues to be identified and remediated.
Good purchasing practices, with strong collaboration and open communication between buyers and suppliers, are another crucial step.
Buyers must review their purchasing practices and demands placed on suppliers to ensure that, where possible, suppliers have the ability to continue operations and provide decent and safe jobs for workers. This is important at all times, not just in times of disruption.
Buyers must ensure that procurement teams are supported appropriately to source responsibly. For example, actions to consider when managing the impact of covid-19 include:
Agreeing lead times to allow for slower/disrupted production resulting from physical distancing and other covid-19 measures and impact;
Maintaining regular orders;
Ensuring the price of goods covers additional transport costs;
Removing penalties for shipment delays;
Ensuring clear forecasting so that suppliers can plan their workforce to ensure that working hours meet income needs but are not excessive.
These are good practices that will also support robust supply chains generally. More guidance around covid-19 can be found on the Sedex COVID-19 Guidance Hub.
What steps has your company taken to address those supply chain issues?
Supply chain visibility and access to good quality data dramatically improve the ability of businesses to achieve their goals, improve operations for both management and procurement, meet demand and protect workers. The insight gained from understanding its supply chain also helps a business to understand the impact of a crisis like covid-19, and make informed decisions about how to respond.
Sedex has pivoted to rapidly enable businesses continue to do this and support manage the impact on workers and their supply chains during the pandemic. In response, Sedex has launched:
Sedex Virtual Assessment: We have developed and launched the Virtual Assessment tool that uses video technology to allow social auditors to assess site performance remotely so that brands can continue to assess suppliers, sites and working conditions even while in-person access may be prohibited due to current safety measures. Virtual Assessment is aligned to the existing SMETA audit methodology, allowing for seamless integration with members' existing data on the Sedex platform.
Direct worker reporting: We have developed a worker voice tool in partnership with &Wider, which uses mobile technology to gather anonymous feedback directly from workers about their sites and working conditions.
COVID-19 Modular Self- Assessment Questionnaire (SAQ): We have built a self-assessment questionnaire for supplier businesses specific to the covid-19 situation and its impact. This allows us to gather insight about the effects, business impact and responses across suppliers all over the world and from various industries.
We have also rebuilt our Risk Tool this year. It combines inherent risk information about countries and industries with site-specific information uploaded by businesses to create bespoke risk indications for sites.
Too many audits, often with confusing requirements from different buyers, have been resulting in high costs for producers in the past-an issue flagged by the European Union a few years back. Does that problem still continue?
Audit fatigue can be a challenging problem within compliance. Sedex offers a solution to overcome this, and our business was founded on the basis of reducing audit fatigue by enabling suppliers to share one audit with multiple buyers. Our platform continues to accept all audits and, on an average, companies on the Sedex platform are connected to three to four customers. An audit can be shared easily and privately with all customers.
Our Virtual Assessment tool helps continue this process during the covid-19 pandemic and related safety restrictions. Using the tool means that a site does not have to contend with the additional challenges of managing in-person visitor access, but site assessments can still be conducted.
This article was first published in the November 2020 edition of the print magazine.
Published on: 27/11/2020
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
