Unethical labor: the importance of Supply Chain Transparency

The global textile and clothing industry plays a significant role in international trade, with Asia emerging as a key player. According to the World Trade Organization (WTO 2019 before covid), Asia alone accounts for 58.4% of world clothing and textile exports. However, behind its great success lies a dark reality of exploitative labor conditions. Workers in this industry often endure long hours, low wages, unsafe workplaces, limited rights, lack of regular contracts, and systemically hazardous conditions.

The global textile and clothing industry not only faces challenges related to exploitative labor conditions but also grapples with ethical concerns surrounding labor rights. Not all Asian countries exporting textile and clothing to the EU have ratified "Fundamental" ILO ( International Labour Organization ) conventions and their concrete application is far from the norm. UN Guiding Principles on Business and Human Rights, and OECD Guidelines for Multinational Enterprises fix good standards of corporate social responsibility for Western brands operating in such countries, but are not binding and do not provide for sanctions if not applied. They are one of the symptoms of the long lasting crisis of International law enforcement.

A number of measures have been suggested to change this situation, including in repeated European Parliament resolutions. This article aims at highlighting the value of ethical labor in the textile and clothing industry and raises suggestions for additional measures promoting responsible and fair treatment of workers. One of the crucial issue is the external production, made by global segmentated suppliers. The most important suggestion at a brand level is to create a partnership with the suppliers around the world and allow them to grow in this type of matters and sensibility. For this type of approach there is the need of a team of buyers or sourcing mangers with a specific know how, and competences in specific procedures. This is the type of professionals that Between Conscious program could provide to brands.

EURATEX, the European Apparel and Textile Confederation, has the primary objective to foster a favorable environment for textile and clothing manufacturing within the European Union. As the representative voice of the European industry, EURATEX plays a pivotal role in providing accurate data and valuable tools to EU institutions. Such information assist policymakers in formulating effective strategies that promote Europe’s economic growth and facilitate job creation. Among other activities for the promotion of the textile industry, Euratex is very much involved in promoting research and sustainable development of European manufactures to reduce their environmental and social impact.

But the problem, when it comes to the production of clothes, is mainly in imports from other non European supplier countries, which, urged on by the demands of the former, baulk at the standards they impose. The Agreement on Textiles and Clothing (ATC) and all restrictions thereunder terminated on January 1, 2005. The expiry of the ten-year transition period of ATC implementation means that trade in textile and clothing products is no longer subject to quotas under a special regime outside normal WTO/GATT rules but is now governed by the general rules and disciplines embodied in the multilateral trading system.

China has taken the lead in the lower-value assembly segments of the value chain, followed by other Asian countries. PRC counts more than 100 000 manufacturers, employing over 10 million people, mostly located in five provinces in the eastern coastal area. Factories are clustered near shipping ports and logistics centers, shortening delivery times to clients. China remains the leader in this sector, even though it faces more and more challenges such as the appreciation of the yuan, rising labor costs (especially in the coastal provinces) and lower profit margins for business. Brands meanwhile have been shifting orders to countries that may allow higher profits: first to Bangladesh, but also to India, Pakistan, Vietnam and Cambodia. A segmentation process may lead China (together with Vietnam and Thailand) to focus on producing high-end clothing, while low-end clothing could head to countries such as Laos, Myanmar and Cambodia.

On the other hand, while regulations for the transport of textile products continue to be problematic, even more worrying are the working conditions .

While human rights clauses have been included in all new general cooperation and trade agreements negotiated by the EU since 1995, in 2008 they began also to include sustainable development chapters.

These contain obligations to respect labor and environmental standards, with a clear reference to core labor standards as defined by ILO conventions. The Council of the EU has recently stressed that business activities in partner countries should respect human and labour rights and promote decent work. The Council has also asked the Commission to strengthen the external dimension of the forthcoming revised EU Strategy for Corporate Social Responsibility (CSR).

The Commission on its side may soon table an initiative on a label for textiles and garments produced according to principles of social and environmental standards, in order to regulate the green washing campaigns by making datas scientifically comparable. Basically labels will work like a practical implication that aims to make company more transparent about their producing processes.

In order to change the trends in textile and clothing workers' conditions a number of measures have been suggested, to be taken at different levels of responsibility even incorporating enterprise-led actions in this context.

The Call for action about Ethical Labor Practices: some solution we can think about

Ethical labor practices encompass a range of principles, including the elimination of child labor and forced labor, the right to organize trade unions and engage in collective bargaining, fair wages, health and safety conditions, and reasonable working hours. Upholding these practices is essential to ensure the dignity and well-being of workers throughout the industry.

Supply Chain Transparency:

A key aspect of promoting ethical labor practices is enhancing supply chain transparency. Many textile and clothing brands operate complex global supply chains, making it challenging to monitor and ensure compliance with ethical standards. By increasing transparency and traceability, brands can gain better visibility into their supply chains, identify potential risks, and take appropriate measures to address labor issues.

Certifications and Standards:

Certification programs and industry standards play a crucial role in promoting ethical labor practices. Initiatives such as Fair Trade, Fair Wear Foundation, and Global Organic Textile

Standard (GOTS) provide frameworks to assess and verify compliance with labor and environmental standards. Encouraging brands to seek certification and promoting consumer awareness of certified products can incentivize ethical sourcing and production.

Collaboration and Auditing:

Collaboration among stakeholders is vital in driving change and promoting ethical labor practices. Brands, suppliers, trade unions, and civil society organizations can work together to establish comprehensive auditing mechanisms. Independent audits can assess suppliers' adherence to labor standards, identify areas for improvement, and ensure accountability throughout the supply chain. Regular monitoring and follow-up actions are essential to drive continuous improvement.

Consumer Awareness and Responsible Consumption:

Empowering consumers to make informed choices can drive demand for ethically produced goods. Educating consumers about labor rights, ethical brands, and the impact of their purchasing decisions can foster responsible consumption.

Government Regulations and Incentives:

Governments play a crucial role in promoting ethical labor practices by implementing and enforcing robust regulations. Legislative measures should encompass labor rights protection, responsible business conduct, and supply chain transparency. Offering incentives and recognition to brands that prioritize ethical labor practices can further encourage industry-wide compliance.

International Brands:

Adopt responsible sourcing practices and conduct due diligence on suppliers. -Collaborate with suppliers through cooperative audits to monitor and improve working conditions.

Establish long-term relationships with suppliers, avoiding last-minute orders and sudden changes.

Importing Countries:

Advocate for international guidelines on business and human rights to become legally binding. -Utilize diplomatic and economic leverage to encourage Asian authorities to enforce labor standards.

Implement mechanisms to ensure compliance with labor rights in supply chains.

European Parliament and EU Policy:

Pass resolutions and raise awareness about the need for improved labor conditions. -Strengthen the external dimension of the EU Strategy for Corporate Social Responsibility (CSR). -Promote responsible business conduct and prioritize social and environmental standards.

Conclusion:

By focusing on supply chain transparency, certification programs, collaboration, consumer awareness, and government regulations, we can create an industry that respects the rights and dignity of workers. Ethical labor practices are not just a moral imperative but also contribute to sustainable business growth and a more equitable society.

The tracking policy such as the one presented by the European eco-design proposals with 'product labels' is a winning strategy to achieve transparency and legality in a sector that has so far had few regulations. The role of the sourcing manger in the brands should be entitled to decide a number of cooperative practices with the suppliers that bring to a mutual trust and mutual transparent communication. This ' Product label" also plays a fundamental role in raising awareness in individual consumers through detailed information, which is the foundation for rebuilding an ethical and humane textile industry.

As Between Conscious program, on a brand level, we could help companies to hire the right people to promote the change.