Audits of suppliers’ factories are failing to protect workers’ rights, so concerned retailers are looking to encourage the creation of trade unions to prevent exploitation
An elite group of retailers is trying new ways to ensure ethical standards within the supply chain amid increasing recognition that shoppers want to see workers’ rights protected.
Tesco’s former chief executive of clothing Terry Green told delegates earlier this month at the Retail Week Conference - the annual event organised by Drapers’ sister title - that retailers must accept a “new value equation” that includes the ethical background of products and advised them to work harder with suppliers to ensure transparency.
Until recently, retailers have attempted to improve ethical standards within their supply chains through codes of conduct policed by regular visits from ethical auditors. Despite such efforts, poor working conditions, low wages and abuse of those attempting to join workers’ groups or unions continues.
US retail giant Gap, for example, has an extensive code of conduct, regularly audits supplier factories and is a leading member of the Ethical Trading Initiative (ETI). Yet last month, workers from Gap supplier Modelama’s factory in Gurgaon, India, who were interviewed by Swedish TV company SVT, which was making a documentary on working conditions in the garment industry, were beaten up and expelled from their jobs, before a local workers’ rights pressure group and Gap stepped in to rectify matters.
Modelama workers had complained to local representatives of the Asia Floor Wage campaign that compulsory overtime, sometimes unpaid, intimidation and flouting of India’s labour laws were common. Gap is now trialling a workers’ council at Modelama to handle future grievances, incorporating representatives from workers’ rights groups, elected staff representatives and management. Meanwhile, managers from the factory are being “retrained” by Gap in a bid to promote a more mature system of industrial relations.
Protecting the workers
Gap says: “We’ve been pleased with the multi-stakeholder progress that was made at Modelama. Of course, we’ll continue to closely monitor this factory and, in keeping with our strong and transparent history on sourcing issues, we’ll continue to act swiftly, decisively and thoughtfully in doing everything possible to protect the garment workers who make our products.”
Gap is thought to be one of the first to attempt such a set-up in India, where there is a history of poor relations between unions and manufacturers.
Anannya Bhatacharjee, an activist involved in the Asia Floor Wage campaign, says: “We can have as many agreements as you like on paper but you need organisations on the ground to ensure they are enforced. The barrier to organisation is that workers are terrified every day that if they associate with a workers’ organisation they will lose their jobs and be blacklisted.”
Bhatacharjee praises recent commitments from retailers including Marks & Spencer, Next and Zara to work towards a “living wage” at their suppliers, but says such moves will not be properly implemented without engagement with strong workers’ groups.
Maggie Burns at UK women’s rights group Women Working Worldwide, which also advises ETI members, says she believes that Gap is ahead of the game on promoting freedom of association for workers, having already worked on projects to promote workforce councils in Cambodia, Indonesia and Central America.
She says: “We’ve been working on codes of conduct for 15 years now and there has been a certain level of movement forward but the fundamental issues of excessive overtime, low wages and resistance to bargaining collectives are still endemic right across the industry.”
In that time, the third-party ethical audit industry has grown dramatically to be worth more than an estimated $50bn (£33.16bn) globally as retailers attempt to avoid accusations of child labour, unacceptably long working hours or low pay. However, more than half of Chinese suppliers are said to attempt to mislead retailers about working conditions, according to ethical inspectors. Working with trade unions is virtually impossible in China, where unions are more or less banned. The keeping of false documentation is also said to be so endemic that software packages and training courses on how to keep multiple sets of work and staff records are available to help factories fool inspectors.
As well as being ineffective, ethical auditing is expensive and time consuming for factories and retailers. Doug Miller, professor of ethical fashion at the University of Northumbria, says: “Without a doubt there is a consensus among enlightened brands in the UK and US that audits are not working and they need to move towards more sustainable forms of workplace governance.”
At the front of that enlightened pack is Inditex, the Spanish retail giant that owns Zara, which signed an international framework agreement with the International Textile, Garment and Leather Workers’ Federation (ITGWLF) in 2007.
Inditex’s deal with the ITGWLF involves a commitment to co-operate on tackling workers’ rights throughout the company’s supply chain.
Next is said to be considering following Inditex’s lead with an international agreement that would promote union recognition and freedom of association within its supplier factories. In the meantime, it is putting in place management systems and training schemes to support union organisations in its factories.
Meanwhile, outside India, Gap is supporting the International Labour Organization’s Better Factories voluntary initiative to improve working conditions and competitiveness by strengthening relationships between buyers, local enterprises, governments and worker organisations.
Julia Hawkins, spokeswoman for the ETI, says retailers and suppliers are now recognising that mature industrial relations can bring business benefits beyond insurance against damaging exposés and criticisms of low pay for workers. She says: “Retailers and suppliers have found there are fewer strikes, a more motivated workforce, more workers turning up for work every day and there is less time spent fire-fighting on employment issues.”
Gap notes on its website, for example: “People who work a reasonable number of hours in a safe and healthy environment not only have a better quality of life, but they also tend to be more productive and deliver higher-quality product than those who work in poor conditions. In an increasingly interconnected world, acting responsibly is not just a good feeling - it’s good business.”
Still, critics argue that many key supply countries do not have strong unions or workers’ organisations. Unions in India, for example, are often accused of corruption and more concerned with politics than protecting workers’ rights. Such concerns can make manufacturers and retailers, rightly or wrongly, resistant to dealing with local union officials.
It is interesting that Inditex’s landmark deal with the ITLGWLF has not been followed by any of its major rivals in the three years since it was signed. Even ethical trading leader Marks & Spencer says it remains “satisfied” with its system of regular audits although it has embarked on a programme of workers’ rights training and industrial relations management training for middle management and HR personnel at its supplier factories in Bangladesh.
In the face of suppliers’ resistance to official unions, the temptation for retailers attempting to promote a mature industrial relations model is to favour democratically elected workers’ councils unaffiliated to a union.
However, Miller points out that such councils are relatively weak compared with unions, which are able to affiliate with a broader support group outside a particular factory. They leave open the potential for workers’ representatives to be nominated and controlled by the employer’s management.
He says brands need to work together with international organisations to promote union membership and this broader influx of workers will naturally lead to stronger, healthier unions.
In the current cash-strapped environment, retailers may see investment in such policy as a luxury they cannot afford. But with demand for more ethical fashion still important to some shoppers, finding a sustainable way to protect workers’ rights is something they cannot ignore.