Every year NZ $184 billion of clothing produced by forced labour is imported into countries like New Zealand, Australia and the United States. Modern slavery is rife within the production of clothing, but why? 

A key cost in the production of clothing is labour—paying the people who actually make our clothes. By vastly reducing this cost through outsourcing labour to countries with more relaxed employment laws and lower minimum wages, it becomes profitable for a company to sell us clothes at lower prices. When you combine this with our ever-increasing demand for cheap clothing, the scene is set for exploitation to occur. Here are some of the challenges we addressed in the Ethical Fashion Report research this year:


Modern slavery risks are highest in the part of the supply chain that brands know the least about

Modern slavery can occur anywhere in the supply chain, but is most likely to happen in factories or farms that companies don’t know about or have a direct relationship with. Companies typically know less about suppliers further down the supply chain so they are less likely to check on the conditions and practices of these facilities.

Modern slavery risks are also much higher for workers on short term or casual contracts, called temporary workers, and workers who have come from different areas or countries to work in particular factories, known as migrant workers. Neither of these groups has the same employment protections as other workers. Migrant workers are particularly vulnerable because they often owe fees to middle-men who helped them get the job and they can be tricked or coerced into handing over their passports, leaving them trapped until they pay back their debt.

Another at-risk group is subcontractors. When overloaded with orders from brands, factories will outsource some of the work rather than turn down an order. This often happens without the knowledge of the brand that places the order. The small factories or homeworkers who receive this work are typically completely unregulated and unmonitored, which places workers at extremely high risk of exploitation.

One way for companies to reduce the risk of modern slavery is to know their entire supply chain, so we check how much of its supply chain a company has traced. Encouragingly, more companies are tracing their raw materials than ever before. Unfortunately, the numbers are still low, with only 28% of companies aware of where at least half of their raw materials are from. Our research also looks at whether companies monitor the use of vulnerable workers and subcontractors. While the majority of companies monitor these risks at the final stage, only about half monitor them at inputs and raw materials stage.


Workers who know their rights are at significantly less risk of labour exploitation and modern slavery

If a worker can quit an exploitative job without fear of falling into poverty or if they can demand their rights without fear of consequence, they are less likely to get trapped in slavery-like conditions. This would be possible for workers if companies ensured them a living wage and guaranteed they could collectively bargain for their rights as part of a worker representative group or union.

Earning a living wage is the most effective way to reduce the vulnerability of workers, so our research assesses if companies ensure a living wage is paid and whether they have projects to improve wages. This is consistently the lowest scoring area in our research, with only four companies able to demonstrate a living wage is paid at more than 75% of their final stage facilities. One of these companies, Joyya, is in New Zealand.

There are different steps in the process to improve wages for workers. Encouragingly, we found that half of the companies have initiatives to improve wages in at least some of their facilities. However, very few (only 9%) have taken the next step of calculating a living wage for all the regions they source from—so there is still a long way to go.

Our research also assesses whether companies can show evidence of active unions or worker representative groups so that workers can demand higher wages. Unfortunately, only 7% could show this at the majority of facilities.


Four million people are trapped in forced labour by their own governments

People around the world are trapped in state-sponsored forced labour. In the cotton industry, there are high levels of forced labour in three key growing areas: Turkmenistan, Uzbekistan and the Xinjiang region of China. For example, in Xinjiang the Uyghur people and other mostly Muslim minorities are being forced into re-education camps where they are both indoctrinated and forced to work on cotton farms. Xinjiang is the largest cotton producing region in China and produces 20% of the world’s cotton. This makes it difficult to verify that cotton products sourced from China are free from forced labour.

To encourage the eradication of these practices, 37 companies have signed the Uzbek Cotton Pledge and 22 have signed the Turkmen Cotton Pledge. Similar pledges to condemn the situation in China are still in their early days, but two companies have signed the End Uyghur Forced Labour Coalition’s Call to Action, and several others have published statements committing to end their sourcing from the region.

Fashion companies have a responsibility to understand the risks in the areas they source from. If companies uncover forced labour, it’s usually better that they take the route of remediation instead of boycotting, especially if there’s likelihood of positive change. However, in cases where governments are behind the problem, boycotts may be the only option to make sure modern slavery isn’t in a company’s supply chain. It’s also a way of increasing pressure on governments to change their behaviours.

Our research looks at whether a company has completed a comprehensive risk assessment for their entire supply chain, including raw materials. While 66% companies have completed a basic risk assessment for some stages of their supply chain, only 26% companies had assessed risks at all three stages. We also assess what plans companies have in place for when child or forced labour is discovered. We found that only 26% of companies have a policy and remediation process for both child labour and forced labour. This is simply not good enough.


Modern Slavery Legislation can help make a difference, but New Zealand doesn’t have it

I’m sure you’ve heard us talking about a Modern Slavery Act (MSA) over the last year. Australia passed a MSA in 2018, which requires businesses with a revenue over $100 million to assess and disclose their risks of modern slavery through annual statements. But New Zealand still hasn't passed legislation. While Australia’s legislation is arguably more effective than similar policies in the UK and California, it still has a long way to go to reduce modern slavery. The good news? The New Zealand government can now introduce a robust MSA that builds on both the victories and shortcomings of its predecessors.

Want to know more about modern slavery in the fashion industry? Check out "The Modern Slavery Challenge” chapter in the Ethical Fashion Report!

Along with many NGOs and businesses, Tearfund is advocating for Modern Slavery legislation in New Zealand. To learn more, check out the following blogs:

Why does New Zealand need a Modern Slavery Act?
A Modern Slavery Act for New Zealand, could help you shop guilt-free

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