FASHION REVOLUTION | FASHION TRANSPARENCY INDEX 2021
VIEWPOINTS
81
VIEWPOINT: HOW MAJOR APPAREL BRANDS RESPONDED TO THE COVID-19 PANDEMIC
MARK ANNER IS PROFESSOR OF LABOR AND EMPLOYMENT RELATIONS; DIRECTOR OF THE CENTER FOR GLOBAL WORKERS’ RIGHTS; AND DIRECTOR OF THE MPS PROGRAM IN LABOR AND GLOBAL WORKERS’ RIGHTS AT THE PENNSYLVANIA STATE UNIVERSITY
I’ve been following the global garment industry for more than three decades, and I have never seen the scale of disruption and hardship as that caused by the Covid-19 pandemic. As stores shuttered and countries went into lockdown, brands cancelled more than USD 40 billion in orders without payment in early 2020. As a result, countless suppliers were forced out of business and millions of workers lost their jobs and faced malnutrition.
To better understand these dynamics, Fashion Revolution asked brands a series of basic questions regarding how they responded to the pandemic. The findings are revealing. A few companies made extraordinary efforts to cover their obligations and ensure worker wellbeing. However, most chose not to respond to the questions, and some of the brands that did respond displayed less than ideal ethical business practices. According to the FTI data findings, only 18% of brands provided a valid response to the question on whether they cancelled orders during the pandemic, and only 14% adequately responded to the question about whether they paid up in full for orders they had placed with suppliers.
The brands that responded should be commended for their transparency. However, many of these brands initially cancelled their orders without paying, causing enormous harm for suppliers and their workers in early 2020. They re-instated orders and paid up only after there was considerable activist pressure and media exposés. In some cases, brands only re-paid after lockdowns ended and stores re-opened. One brand noted that it paid for ‘completed’ orders, but it is silent regarding how it handled more costly ‘in-process’ orders. Other brands explain that they paid in full but have extended their payment terms (paying later than what was originally agreed upon with the suppliers). They state that this is ‘consistent with industry practice.’ But this is exactly the problem; it has become buyers’ ‘industry practice’ to pay suppliers months after suppliers finish and ship orders. This causes extreme cashflow problems for suppliers as they seek to pay their bills and purchase new raw material for their next orders.
What is even more concerning is that only 3% of brands were willing to adequately answer a question related to workers receiving wage payments during the pandemic, and only 3% responded to a question about worker layoffs. What we know is that more than 3 million garment workers lost their jobs during the pandemic, and many were denied millions in back wages and severance. These trends indicate it is not enough to ensure that brands properly pay suppliers, but that there also must be mechanisms in place to ensure payment of wages, protection of jobs, and guarantees for worker safety and social protection. The best mechanisms to do that are strong, independent unions with collective bargaining rights; enforceable, binding agreements; and robust social safety nets. It is precisely these mechanisms that must be an integral part of ‘building back better.’
