This article has been authored by Himeesha Dhiliwal, a third year student at Jindal Global Law School, Jindal Global University.
In an era of internet, technology (Artificial Intelligence) and social media we consummate what we search, share or even virtually stare at, thereby curating the content that we are tricked into viewing. Most businesses have attempted to seize the opportunity to adapt to the incessant changes to expand exponentially. The fashion industry like every other gets a piece in the pie too. From the Met Gala (1948) costumes to Blair Waldorf from Gossip Girl who calls Fashion as the most powerful art to our politicians calling out on the character and values of women as a result of the persuasive fashion, we make fashion choices. Our fashion choices are highly influenced by the trends as against, where and in what conditions is a piece of clothing made in the eon of fast fashion. A fashion consumer elated by cheaper clothing fails to acknowledge the price someone else is paying in return.
The fashion industry is the third-largest criminal industry in the world. With supply chains of the transnational corporations (hereinafter referred to as TNCs) and fast fashion retailers like H&M and Zara, have spread their manufacturing over the third world nations to produce clothing and meet the demands of the consumers cost-efficiently. Among the intersecting trends of fast fashion internationalisation and the parallel outsourcing of the manufacturing of such goods in the developing countries like India, Bangladesh, Sri Lanka to produce it the fastest and at the lowest price leads to workers being abused, over-worked, and exploited. With various countries continuing to demand reduced-priced quality products, the suppliers knock down the prices without compromising on their profits causing a trickle-down effect on the supply chain, leading to intensified human right violations of its workers. Article 4 of the Universal Declaration of Human Rights (hereinafter referred to as UDHR) denounces slavery and servitude by Article 1 of UDHR providing all human beings the right to equal dignity as all are born free and Article 23 of UDHR providing everyone with the right to have a just and favourable working condition. Despite international and parallel domestic legislations ensuring the fundamental rights of individuals, human rights violations have been incessantly prevalent.
Outsourcing in Fast Fashion Industry
97% of all the clothing items sold in the United States of America are currently made overseas. This results in the formulating of utterly complex and long supply chains crossing multiple borders making it nearly impossible for governments of both, Host and Home countries to regulate production, list down the scope of responsibilities, and trace violations being committed. The governments of countries hosting the manufacturing supply chain are responsible for enforcing the protection of individual human rights while corporations are bestowed with the moral responsibility to simultaneously ensure rightful treatment of their workers across the entire supply chain. Humans being selfish unbothered individuals do not pay heed to the susceptible human rights violations being caused as a result of globalisation and consumerism. The governments and employees engaged in the supply chains cherish the business that they receive from TNCs to alleviate poverty in these communities. The workers are not conventionally seen as employees of the concerned TNCs since factories are run by private businesses in these countries. This thereby creates a gap that does not allow the employee benefits to reach the workers in the third world countries. And with the conventional corporate law policy in place, liability to the TNCs is absent. To slyly benefit from the loophole, TNCs engage with supply chains instead of setting up their factories thereby avoid liability. With rising violations in this industry, the author believes that corporations need to collaborate to ensure proper monitoring of their supply chains and create a positive lasting impact. A certain amount of responsibility must be cast on private actors, however, legal measures, especially from the host state may not be sufficient to achieve these objectives.
Given the regulation-less vacuum within which the TNCs today operate, questions have arisen regarding the gross human right violations that take place. There have been different initiatives by states, international organisation, civil groups, and corporations themselves to alleviate the issues, but in vain. The problems are so systemic that no measure so far has been successful in ensuring that the factories in the Global South, which form a part of the TNC’s supply chain, get access to decent working conditions, universal minimum wages, or remedies.
Interaction between TNCs and Governments
Looking at this issue from a political-economic lens, a new kind of imperialism is seen brewing ever since neoliberalism brought these TNCs to the centre-stage, creating global commodity chains connecting production from the Global South to the final consumption and the wealth-creating monopolies in the Global North. Suwandi et al. give the example of Nike, which engages in this “arm’s length contracting”, offshoring the production processes to the periphery thereby increasing the industrial employment in these areas. Subcontracting has created a situation where the production and consumption has become increasingly severed and even the value addition is disproportionately ascribed to the North, even though most production happens in the South, creating pyramids of wealth.
Several scholars have tried to understand the socio-political factors that can help prevent fatalities associated with the supply chain coming to the consensus that only by strengthening the collective bargaining power of workers can the exploitation be prevented. It is associated with reduced wage inequality and extending labour protection to the vulnerable workers in the lower tiers of the chain. There have been very few transnational collective bargaining instances. One example is IFAP which tried to protect the worker’s right to organize but the protocol was limited to first-tier factories. Helping workers collectivise is antithetical to the idea of TNCs and the latter, even if it engages in measures to self-regulate, it would not be able to confer much-needed power onto the labour helping them voice their needs. Niebank explains how corporate self-regulations like Alliance or Codes of Conduct have failed to eliminate adverse human right issues in the garment supply chain. They often focus on specific issues rather than a comprehensive approach to human rights. Further, voluntary schemes lack adequate monitoring or means to prevent selective disclosure. They do not guarantee accountability or transparency, and nor do they take measures to ensure that the burden on the factory owner is not too high that they cannot guarantee minimum standards.
While self-regulation is not bad by itself, it cannot substitute other modes of regulation. They are neither sufficient nor efficient in reducing the impact of human right violations on subcontractors in the South. It can certainly play a complementary role in taking initiatives like the ACT. Instead, the focus must be on the strategic use of Home State Regulations like binding human right duties on corporations, removing barriers from extraterritorial civil litigation, and holding TNCs vicariously liable in tort for even the factories subcontracted, while formulating a way to hold corporates accountable through private international law instruments. Strict transparency regulations with binding due diligence obligations on all TNCs at every level of operation would be a lot more helpful as compared to placing all the reliance on self-regulation by corporates. Additionally, these TNCs must be mandated to publish their supply chain reports with routine investigation reports to keep a check on the functioning and taking action against violations if any.
Role of Standards, Benchmarks and Ratings
In the documentary, “The True Cost”, a factory worker named Shima Akhter said, “I don’t want to wear anything that is produced with our blood”. From the earlier findings, it can be concluded that the role of the States is primary in regulating the safety of workers, ensuring fair employee benefits, upholding labour conditions, and equipping the workforce with technical skills. But there also exists a great amount of responsibility on the TNCs, the private actors to regulate such violations as well. To assess the actions or in-actions of the TNCs, several ethics rating agencies and private benchmarks/codes exist which might aid in creating an ethical standard for the fashion industry manufacturers to abide by. In a global economy, standards play a vital role in creating a common vocabulary and shared metrics, which then facilitate and elevate the quality of decision-making among investors and other stakeholders, mainly consumers. They provide consumers with the choice to make informed decisions to create a sustainable future in fashion. These ratings and benchmarks encourage transparency through which, fashion brands can be found responsible by the consumers. The statement by Shima Akhter is indeed a plea to the consumers and not to the manufacturers or contractors. Nonetheless, an experiment using ethical stickers in products, the consumers’ purchase choices weren’t influenced by the warnings in the packaging. But the multiple public-led movements supporting sustainable fashion and the outcome of such campaigns is a testimony for the effect of accountability through consumer choices.
KnowTheChain benchmarks and ratings are based on the United Nations Guiding principles which specifically assess the degree of forced labour risks in their supply chains. Astoundingly, GAP scored 75/100, H&M 65/100, and were among the leaders. But when we compare it with the Ethical Consumer ratings of companies, which takes a more wholesome approach rather than focusing merely on the aspect of labour exploitation in the supply chain, there are differences. While analysing the track progress of 11 High-street retailers from 2011-2017, there have been noticeable drops and improvements in their supply chain management policies. One such retail which has significantly seen a drop in its ranking is GAP. The reason being, they had made a commitment to ensure wages are enough to meet workers’ basic needs in their policies for over 15 years but have failed to make any progress whatsoever towards its payment. GAP monitors if ‘minimum wages’ are paid but seems not to acknowledge the difference between this and a wage that is enough to live on and support a family. On the contrary, corporations like ASOS and Uniqlo both in 2011 produced a basic code of conduct that covered aspects of freedom of association, discrimination, child labour, and forced labour. These codes of conduct are often seen as a company’s ‘Constitution’ and as a form of self-regulation that normally contains general principles to guide behaviour. In 2017, ASOS’s code of conduct was brought in line with the Ethical Trading Initiative’s base code and it was engaging in Action, Collaboration, and Transformation on issues such as living wages within its supply chain. Uniqlo become a member of the Fair Labour Association and had produced more details on its website regarding how it monitored its supply chain.
Another unique brand rating system is Good On You, where they distinguish between small and large brands based on 'annual turnover'. Through this, they recognize that the larger brands have greater influence over their supply chain impacts, and with their stability in the market, they are expected to comply with higher standards.
Interestingly, no FLA-affiliated suppliers and companies are from India and Bangladesh. When the Global South, especially Bangladesh, India, Myanmar, and Vietnam, have become the hub for fast fashion industries looking to cater for the masses, compliances of these standards in these countries become significant. These ethical ranking and benchmarks may play a role in probing more manufacturers to comply with the ethical standards.
In the midst of all this, private rating platforms like ‘Spend Matters’ ask consumers if their favourite clothing brands are ‘transparent with supply chain sustainability’. However, the separation of interactions between the labour-factory managers, the brand-consumer and informational agencies-consumers does little to aid the plight of the workers as consumers may be placated by the brands with promises of ‘sustainability by using biased research. While previously mentioned private bodies may have helped uphold certain basic rights for the workers, it is only governmental agencies that can bring these interactions together on a common platform in the long-term, instead of focusing on specific issues. Not only does a government not face the same issues of funding but also has a higher level of legitimacy in the eyes of consumers and companies. The UN Guiding Principles that seek to make companies responsible for all their actions are certainly something that needs to be emulated by the host and party nations across the world, but one does wonder if it would take a bigger disaster for them to be finally implemented.