A special report by Baptist World Aid Australia has found that, throughout the Covid pandemic, 35% of fashion companies assessed did not show evidence that they had made regular payments to their suppliers.
The Covid Fashion Report – which this year takes the place of Baptist World Aid Australia’s annual Ethical Fashion Report – assessed 96 Australian, New Zealand and international companies, representing 428 brands, on specific positive actions taken amid the coronavirus pandemic.
Late stage cancellations of orders directly impacted garment workers’ incomes. The Clean Clothes Campaign estimates this resulted in $5.79bn in lost wages for 50 million garment workers between March and May. “In the face of this crisis, workers’ rights, wellbeing, and dignity should not be put on hold for the sake of profit,” the Covid Fashion Report states.
“The industry was reeling,” says Peter Keegan, director of advocacy at Baptist World Aid Australia. “You have to look at the hit the companies took to sales, footfall … the brands were struggling, but the workers were really struggling.”
He notes that many brands faced huge challenges to stay afloat in 2020 with senior staff putting in very long hours. Keegan also points out that in May, more than one in three surveyed Bangladeshi garment workers said their children had to forgo food due to a lack of money.
The Ethical Fashion Report is the most comprehensive of its kind for Australia and New Zealand. Typically the report highlights fashion brands’ transparency and demonstrable practices around treatment of workers, and the environment, through extensive surveying, consultation and examination of publicly available materials, giving brands a score from F to A+.
The report offers an assessment of brands’ transparency and knowledge of their supply chain but does not offer a full picture of their practices.
Brands that collaborate with the Ethical Fashion Report tend to receive higher scores than those that are assessed only on publicly available information, and the report is limited by the information brands are able to provide either publicly or directly to researchers. “We say really clearly that we are interested in seeing them have that information in the public domain,” says Keegan. “But also recognise that there are areas they may have commercial confidentiality. It’s an engaged process right throughout the year.”
'Those that … have already set up supplier relationships agreements and contracts with ethical principles were able to respond best'
He says the 2020 report started at the beginning of January with the regular research process. “In March it became clear that wasn’t going to be the best approach.”
Instead, the report pivoted to look at six key areas of worker protection throughout the pandemic, developed in conjunction with garment workers’ organisations.
The report looked for evidence of brands’ support of workers’ wages by honouring their commitments to suppliers; companies’ ability to identify and mitigate the risks of Covid-19; their processes around listening to the voices of their workers through the supply chain; the provision of fair and healthy working conditions; their ability to collaborate with external groups to protect vulnerable workers; and finally, their intention to “build back better” for both workers and the environment.
Keegan says that 70% of brands surveyed were able to show at least one positive action in these areas, which he says is an optimistic “starting point”. “We want to acknowledge the fact that the significant majority of brands were able to show some progress.”
The report found that companies that had already scored highly in previous Ethical Fashion Reports were seven times more likely “to show evidence of all commitments”. He says this highlights how critical it is that fashion brands know their suppliers well. “Those that know their suppliers … have already set up supplier relationships, agreements and contracts with ethical principles, were able to respond best.”
Brands that met all the commitments outlined by the report include international high street retailers Uniqlo and H&M, budget retailers Kmart and Big W, online retailers ASOS and The Iconic, and Australian brands including Country Road, Cotton On and Cue. Factory X – the company that owns Gorman and Jack London – which has previously come under fire for receiving failing scores on the Ethical Fashion Report, was able to show commitments on all six pillars.
However, the report also states that “no company could fully assure that their actions extended to every worker at every tier of the supply chain”.
Keegan says that the average garment is estimated to pass through 100 pairs of hands from the development of raw materials through to its purchase. “These are long and complex chains with different risks at different stages.”
Brands that did not show evidence of progress on any of the pillars include Australian high street staples, alongside international brands and ecommerce retailers who were assessed only on publicly available information, as they did not work with researchers directly.
Some of the lower scoring brands faced financial difficulty, and were placed into administration in 2020.
Keegan says that the area in which brands were the weakest overall was “listening to the voices and experiences of workers” – an action only 50% of brands could show evidence of undertaking. The report found that “72% were unable to point to visible or active support for independent unions or worker representation groups”.
New Zealand high street retailer Glassons – which has gone from an Ethical Fashion Report score of D- in 2015 to a score of B+ in 2019 – showed particular initiative in listening to its workers’ concerns, establishing a new grievance mechanism through Chinese NGO INNO. Its CEO, James Glasson, says that the change was made because “we learnt … we needed to engage with a local company that would be a better cultural fit and would encourage workers’ voice.”
Though Glasson notes its scores increased when it started actively participating in the Ethical Fashion Report, “as a brand, the Ethical Fashion Report has also brought into focus worker welfare and the continued actions we need to take to continue making positive change … We realised the importance of our role in being transparent for our customers.”
Glasson says that the most difficult to audit aspect of its supply chain has been input materials and raw materials, “as we do not have direct relationships with this part of the supply chain, this is an on ongoing focus”.
Keegan says that a lack of transparency at the earliest stages of the production process is a significant concern for most brands. “Some of the risk with raw materials is visibility – transparency as to what’s happening there. The majority have transparency around the sewing stage, but when you reach back, the conditions that workers are working in are hidden.” This means that the risks of “forced labour, modern slavery and child labour become greater. That’s also where a lot of environmental risks come into play.”
Keegan believes that, as difficult as the pandemic has been – particularly for highly vulnerable workers – brands should view the reset caused by Covid-19 as a chance to create fairer, more resilient and sustainable systems, with living wages at the core of their policies. “This is a moment where we can see that investment in things like a living wage build resilience in the industry.”
Keegan is also keen to stress that working with existing suppliers to ensure better conditions, rather than simply dumping non-compliant suppliers, is best practice. For this reason, he does not see the move to highly localised production as a silver bullet.“We know that good jobs in the garment industry are an incredible economic opportunity … for a worker in Bangladesh or Myanmar, we don’t want to lose that.
“The key dimension is how well do you know your suppliers,” he says, noting that local production can make this slightly easier. However, high scorers tend to be “the company that can show us that they have those close and long-term relationships - wherever they’re located.”
He also believes consumers have a part to play, by reading the report and accompanying consumer guide, shopping in alignment with their values and communicating with brands on the issues that they care about.“We found 82% of Australian consumers wanted to see clothing companies pay workers fairly. We know that Australian consumers are interested and concerned about these things.”