Shoppers are eagerly returning to malls and many countries are getting used to a new “normal”, but Covid-19 continues to put the people who make our clothes at risk. 

The pandemic has worsened inequality and vulnerability in the garment industry. Here are some of the challenges we addressed in the Ethical Fashion Report research this year:


Women in the supply chain have been disproportionately affected by Covid-19

Eighty per cent of garment workers are women. Over the past year, women have faced disproportional wage gaps, as well as verbal and physical abuse. They have also been subjected to reproductive discrimination during layoff decisions. At the height of the pandemic, suppliers refused to pay maternity benefits and many of the first furloughed or fired workers were pregnant women.

This area is essential for companies to focus on in their supply chains, so we check if companies have implemented a policy and strategy to address gender inequality and women’s rights violations. Sadly, we found that only 21% of companies have a comprehensive policy and strategy and many companies still have nothing in place to address gender inequality.


Wage theft and debt have increased for the most vulnerable

During Covid-19, 95% of fired workers were not paid the wages or redundancy pay they were owed. It’s estimated that factories withheld over half a billion dollars from workers. This has forced workers and their families into starvation, with a majority saying they had to go into debt just to feed their families. Withheld wages had such extreme impacts on workers because they were already only just scraping by on dismally low wages.

Workers and their families going hungry is unacceptable. That's why we advocate for companies to pay a living wage to workers that meets a family's needs and allows workers to save money for unplanned events. Paying a living wage isn't simple though, so our research asks an array of questions that assess how committed a company is to researching and implementing a living wage in their supply chain. The results in this area are disappointing. In fact, this has consistently been the lowest-performing part of our survey over the years. Very few companies had calculated the living wage in the regions they source from and only four companies could show a living wage is paid in over half of their final stage facilities. In New Zealand, only one company pays a living wage to all workers at final stage.


Companies’ ability to monitor factory conditions has been disrupted

In the pre-covid world, companies would regularly travel to manufacturing locations to visit their factories and inspect the factory conditions and products being made, or they would get a third-party auditor to do this. The pandemic’s travel restrictions meant companies couldn't do these normal checks, so many changed to factories assessing themselves, or auditors doing virtual inspections. Both of these new approaches to checking the conditions in factories are much cheaper and more convenient for companies. There is talk within the fashion industry about whether virtual auditing will replace traditional in-person auditing. However, organisations like the International Labour Organisation have warned that self-assessment and virtual auditing are not as good at picking up human rights abuses, making it easier for these things to slip under the radar.

We believe that robust supply chain accountability is important and that brands are responsible for providing safe, risk-free environments for supply chain workers. So, our research looks at how much of its supply chain a company is monitoring and what type of monitoring is taking place. We found that traditional auditing is slowly returning to pre-covid rates, with 77% of companies monitoring at least half of their traced final stage facilities, 37% of which monitor all traced final stage facilities. Many companies don’t have visibility into, let alone direct relationships with, the inputs level (fabric production) and raw materials level (cotton farms). Our research found that only 6% of companies are monitoring all of their traced inputs. This puts these levels at higher risk for labour rights abuses.


The way that brands and supplies work together isn't working

For far too long, brands have enjoyed massive profits while taking very little financial responsibility for the people in their supply chain. When the pandemic hit and countries went into lockdowns, brands cancelled orders in a panic. In many cases, suppliers had already spent money on fabric and materials for these orders that they couldn't get back. This meant they didn’t have the financial ability to continue their operations and pay their workers. Covid-19 has shown the necessity for a mutual brand-supplier partnership, where brands take on a fairer share of financial risk and support. However, not everyone is on board with this. A post-pandemic gap has emerged where many companies are requesting greater supplier flexibility (lower costs, faster production) while suppliers are asking for greater stability (guaranteed orders, longer lead times).

How brands treat suppliers has a direct effect on the workers in those factories. We want to encourage brands to have positive relationships with suppliers, so we check if brands have something called Responsible Purchasing Practices (RPPs) in place and whether they track their progress. RPPs include implementing reasonable production timelines, accepting financial liability for last-minute order changes, and ensuring pricing negotiations are fair. We found that most brands had RPPs in place, but unfortunately, few tracked data to measure if they were being implemented well.

COVID-19 has ultimately left the fashion industry with two options: remain stagnant in its exploitative and unsustainable ways, or build back better with a more resilient, planet-friendly and people-focused production model.

Want to know more about Covid-19's impact on the fashion industry? Check out “The Covid-19 Challenge” chapter in the Ethical Fashion Report!

 

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