With an absence of free trade unions and independent NGOs to help companies identify human rights risk, companies like Adidas are going directly to workers
Last month was the fifth anniversary of the collapse of the Rana Plaza factory complex in Dhaka, Bangladesh, which killed 1,134 workers. While the direct reason for the building’s demise was shoddy construction and poor regulations, it can be said that the weight of the global apparel supply chain also weighed heavily on the doomed structure.
Vast networks of manufacturers and buyers, investors and consumers weave a tangled web around the apparel industry and ensure supply chain management in this sector is among its most challenging areas.
China has of course dominated the market as apparel suppliers for many years. But, higher mainland wages and a more competitive job market have prompted Chinese manufacturers to shift aspects of their manufacturing off-shore, or to shunt them into some of China’s darker corners.
That major brands such as H&M and C&A were apparently unaware that prison labour was making their products is sobering
Recent revelations from Peter Humphrey, a UK citizen just released after two years in the Chinese prison system, have shone a bright light on the extent of slavery and forced labour there. That major brands such as H&M and C&A were apparently unaware that prison labour was making their products is sobering. But given the complicated landscape they and the entire garment industry have built, it shouldn’t be such a surprise.
Disclosure remains a major issue, despite some transparency improvements – and much still needs to be done.
Earlier this year, Fashion Revolution, a UK-based consumer advocacy group, published its latest survey of the garment industry’s human rights standards. Researching 150 leading apparel brands, the Fashion Transparency Index found that even the best performing companies were mid-range of the NGO’s own scale, and just 10 companies reached that seemingly modest level.
The legacy of the Rana Plaza tragedy weighs on the apparel sector. (Credit: Sk Hasan Ali/Shutterstock)
Those that did well, led by sports brands Adidas, Reebok and Puma, had “significantly increased their level of disclosure since last year”.
Lowell Chow, greater China senior researcher for the Business and Human Rights Resource Centre, says companies must go beyond auditing to get a true picture of what is happening in their supply chains.
“Social auditing ... has become almost the mainstream approach to addressing human rights violations along the supply chain. But often auditing can by itself generate problems, too, as it diverts resources away from what could have been spent to address workers’ concerns directly.”
Chinese-run factories in other countries do not enjoy the best reputation
He adds: “In order to genuinely tackle the issues, companies should build systems both internally and externally, to identify problems on an ongoing basis, instead of using occasional inspections.”
Nicola Macbean, executive director of The Rights Practice, a worker-focused human rights NGO, notes that as supply chains are in turn flicking out of China, companies need to ask more questions.
“One question would be: who is controlling suppliers in other countries. Chinese-run factories in other countries do not enjoy the best reputation. What information and access would a Western corporation have regarding third-country suppliers? What is the regulatory environment like in that country and are there local political issues that would make monitoring difficult?”
Fashion Revolution monitored 150 brands in its survey of human rights standards.
Given China’s place at the core of the global apparel supply chain, it makes sense to maintain a focus on the country with regard to impacting human rights standards across the region. Much of what happens in garment manufacturing in Asia goes through China at some point.
Fortunately, says Kate Larsen, senior consultant on human rights for ERM, a London-based sustainability consultancy, the garment sector has built good links with workers throughout Asia. “Apparel tends to lead the way in engaging workers and NGOs,” she says.
In China, she adds, “local organizations, such as the Inno Handshake worker hotline [in] Guangzhou, work with at least 20 western buyers and many factories to help around 500,000 workers understand their rights and responsibilities, gain counselling, report rights concerns and drive their remediation”.
Inno Handshake was set up in 2007 as the result of a collaboration between Hong Kong-based CSR Asia and major multinational brands.
Free trade unions and other independent NGOs, are less powerful – or even outlawed – in China
Larsen also points an extensive array of international standards and protocols, such as the Fair Labor Association and United Nations guidelines, including the UN Guiding Principles on Business and Human Rights, that can aid in directing and quantifying such processes.
State-focused protocols such as the UN guidelines are particularly applicable in countries, like China and many others in South-East Asia, where governments have a high degree of control over conditions and regulations in the nominally “private” sector. Negotiations with governments, as much as with suppliers themselves, is crucial, no matter what the scale of operations.
Larsen believes companies should go beyond mere standardization, however, since many of the institutional actors that could be relied upon to help facilitate the process for proactive companies, such as free trade unions and other independent NGOs, are less powerful – or even outlawed – in China.
H&M was implicated in revelations about prison labour. (Credit: Venturelli Luca/Shutterstock)
“In terms of protocols to respect labour rights, besides audits, training and more, as independent trade unions in China are not allowed, other approaches are used to hear worker voices and support respect for their rights, and to thereby reduce risks to business,” says Larsen.
Sofie Nordström is co-founder of QuizRR, a Swedish consultancy that provides training in developing sustainable supply chains. She agrees with taking an approach that digs deeper. (See How QuizRR is taking human rights training to the factory floor)
Stakeholders need to act on the wealth of information that is being disclosed in order to hold brands, governments and suppliers to account
“Garment companies are realizing that audits and inspections alone are not leading to sustainable change and companies are increasingly investing in tools and programmes to enhance capacity building and knowledge raising at the work floor level.”
Those pushing for better human rights standards in the apparel supply chain are certainly looking for more action.
The Fashion Transparency Index 2018 concludes that stakeholders “need to act on the wealth of information that is being disclosed in order to hold brands and retailers, governments and suppliers to account for human rights, working conditions and environmental impact”.
Source: Good World Solutions
More direct enquiries may help. In 2016, the Good World Solutions project drilled down into worker engagement issues. Some 119,000 workers across 70 Chinese factories, supplying companies including fashion brands American Eagle and JCrew and toy maker Hasbro, were invited to confidentially complete a survey on questions around worker satisfaction and retention.
The study showed that 43% of workers were dissatisfied with their current job, 73% regularly experienced workplace stress and 28% felt their complaints were not fairly resolved.
Such reports help manufacturers better understand the workers making their products. But the bridge between data and action remains unbuilt for some companies.
Rather than setting a quantifiable goal, Adidas says it is supporting human rights defenders
Adidas, which ranks second, behind Marks and Spencer, on the new Corporate Human Rights Benchmark in the apparel sector, has taken a cultural approach to human rights in China, and elsewhere. Rather than setting a quantifiable goal, the company says it is supporting “human rights defenders” or HDRs.
According to Adidas these “can be any person or group of persons working to promote human rights locally, regionally, or internationally”.The company seeks to support such figures to alert it to human rights problems they identify.
“We may actively support the work of the human rights defenders … We will also petition governments … where we feel the rights and freedoms of human rights defenders … have been impinged by the activities of the state or its agents.”
Adidas ranks second in the Corporate Human Rights Benchmark. (Credit: testing/Shutterstock)
The approach has the support of NGOs such as the International Service for Human Rights (ISHR), which says workers have to be placed at the centre of tackling human rights in companies.
The ISHR is among those lobbying for binding workplace standards in a process under way at the United Nations since 2014 to “elaborate an international legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises”.
The ISHR and other groups have sought to focus on human rights defenders as central functionaries in the “prevention of, and accountability for, human rights violations associated with business activities”.
Evidence suggests that, after decades in which much of the industry has floundered, giving workers in the supply chain a voice and a presence is crucial. Those companies that do can establish positions of leadership, drive brand differentiation and rise above the pack.
This article is part of the in-depth briefing China’s New Dawn. See also:
Green bond market helps China’s green revolution overcome headwinds
China looks offshore for its new renewable frontier
Chinese companies slow to join RE100
Women and children first: how brands are innovating to help China’s female workers
IKEA and Audi pulled up for sexist marketing
Global goals: Huawei’s strategy to connect the world – and take on Apple
Electronics sector charts new path after ‘bloody decade of labour abuse’
How QuizRR is taking human rights training to the factory floor
China’s toy industry in push to improve conditions for migrant workers
How Mattel’s quick move rescued Barbie
China ramps up search for solutions to meet urbanization challenges
garment supply chain China Adidas Corporate Human Rights Benchmark Rana Plaza ISHR QuizRR Good World Solutions CSR Asia Business and Human Rights Resources Centre The Rights Practice ERM Inno Handshake UN Guiding Principles on Human Rights Fair Labor Association