Let’s be honest, we all felt a wave of anxiety in lockdown when we realised shopping with our favourite ethical and sustainable fashion brands was off the cards for at least a few weeks.. But can you imagine how much worse it must have been for companies who had to close their doors, not knowing when it would be possible to make their next sale?

Retailers in New Zealand and Australia have experienced immense economic stresses, with global borders being closed and restrictions around shopping, in an attempt to curb the spread of Covid-19 infection. On day three of this series, Chantelle Mayo from Baptist World Aid reflects on the vital importance of supply chain transparency in these times.


The coronavirus (Covid-19) crisis has turned economies, health systems, whole industries, and our way of life entirely on their heads. The effects have been felt by most of us. Restrictions on our freedom of movement meant that for a time, we weren’t able to flock to the shops to buy the latest threads, and now that we can, it seems that many of us are a little bit hesitant to revert to our old shopping ways.

And retailers are feeling the pinch. More and more fashion companies are shutting their doors every day to protect themselves from a dip in sales and their staff and customers from infection.

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For workers in garment supply chains who already experience disproportionately high labour rights risks every day, the economic and health risks of this crisis are particularly high. Are workers able to practice social distancing while at work, or when travelling between work and home? Can they access sick leave or annual leave to self-isolate? How is their employment security as companies cancel orders or default on payments? All too often, we don’t know the answers to these questions.
 

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Transparency has become an important factor for businesses success in the 21st Century, playing a key role in gaining the trust of consumers and investors alike. There is a growing global consensus that companies have a responsibility to prevent human rights abuses.

Making supply chain information public is considered a first step in the right direction for companies new to labour rights management. Supply chain information is essential for human rights organisations, company stakeholders, and customers, to hold companies accountable for the wellbeing of the people that produce their clothing, and advocate for improvements where violations are found.

 
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In this time of coronavirus, as workers become even more vulnerable, transparency from companies about how they are working with their supply chains is more important than ever. Companies delaying payments for completed orders risk leaving suppliers at a deficit, with the burden of the lost profits falling on workers who are already, on average, paid less than minimum wage.

Companies may also use Force Majeure, a legal tool that can be used to break legal contracts and back out of payments in the event of a global emergency. This might help companies to recover but has the potential to devastate global supply chains and the workers who are part of them.

There is also a risk of excessive work and an increase in unstable employment. The ability of factories to produce at their regular levels is changing constantly and unpredictably. China, for example, is slowly emerging from the worst point of its crisis, which erupted in December, and many garment manufacturers are re-opening.

Meanwhile, the situation in Bangladesh is getting worse, with many factories closing in the past few weeks. Companies that find their supply chains compromised because of coronavirus, may redirect their orders to a reduced number of suppliers, placing pressure on factories to work excessive overtime hours to meet demand.

The same risk is high for regions coming out of lockdown, as factories strive to make up for lost time and profits by committing to large orders, with staff again being forced to work excessive hours to meet deadlines. In these uncertain situations, the increased use of temporary contracts and subcontracting is another risk. Such factories are more difficult to locate and monitor for breaches of labour right and standards.

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The coronavirus crisis presents a unique challenge to social compliance. Border closures, lockdowns, and restrictions on freedom of movement mean the loss of many of the ways companies can protect workers from exploitation such as audits, worker interviews and surveys, grievance mechanisms, and union groups.

So, while the risks to workers have increased, the ability of companies to address them has declined.

 

What Next?

We encourage companies to join and aid the global effort to reduce worker exploitation in garment supply chains, by being more transparent with their supply chain information. Around the world, there are more and more organisations, partnerships, and programmes designed to help companies meet their obligations to protect the human rights of their workers.  By increasing their transparency, companies improve their credibility with investors and customers and commit to more accountability towards their workers. They also open themselves to new opportunities for collaborative approaches to global social compliance.

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2020 should have been the year of supply chain transparency. Company transparency in New Zealand and Australia’s fashion industry has never been higher; the first Modern Slavery Statements in Australia are due; and increasingly, the public is demanding information on where their clothes come from.
 
As this global health crisis unfolds, the likelihood of this appears bleaker.

But it is more important than ever.

Have you heard about the new COVID Fashion Commitments?

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These are six straightforward commitments for fashion brands to make to the workers in their supply chains, and for us as consumers to stand with them and call them to deliver.

Learn More


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