LONDON – The British Retail Consortium, Ethical Trade Initiative, Fair Wear Foundation and Fair Labor Association have joined global calls for greater support from the international community to aid Sri Lanka amid the current economic crisis. The NGOs are calling for fashion brands to work closely with suppliers to ensure prompt payment for orders, among other measures.
Sri Lanka is currently facing its worst economic crisis in more than 70 years, which has been further intensified by the war in Ukraine.
Sri Lankas residents are experiencing daily power outages, and are unable to buy essentials such as food, fuel, or medical supplies, when these are available. Severe shortages have stoked inflation as high as 70%, with political instability and wide social unrest also impacting the economy. While a new president has now taken office, economic volatility and public protests remain ongoing.
According to the Joint Apparel Association Forum Sri Lanka, more than 50 per cent of Sri Lanka’s total exports are produced by the apparel industry, which directly employs approximately 350,000 people. A further million rely on the industry for indirect employment.
Said a statement from the ETI: “As the situation worsens, public concerns around employment and economic security increase, with many fearing job losses as the need for greater income grows with soaring prices and an overall hike in cost of living.
“The Ethical Trading Initiative (ETI) has been engaging with economists, industry associations, worker representatives and member companies operating in Sri Lanka, to better understand implications on workers and the industry at large. These meetings have helped to present a clearer picture of the current crisis and steps stakeholders are taking to alleviate risks to workers and suppliers. Some of these include the distribution of dry rations, medicines, groceries, and cooked food.”
To facilitate a collective response, ETI recently led a meeting for all companies sourcing from Sri Lanka to engage with the Joint Apparel Association Forum (JAAF). ETI, Fair Wear Foundation, Fair Labor Association and British Retail Consortium reached out to their own members and partners with supply chains in the country.
Together, all four organisations have now signed a joint call to action, encouraging companies sourcing from Sri Lanka to take specific steps to support workers, suppliers and the sector at large, during this difficult period.
They are encouraging companies sourcing from Sri Lanka take the following actions:
• Ensure that there is a clear understanding of the risk to workers in the current situation
• Maintain regular communications with your suppliers to understand their current situation and ensure timely payment of orders
• Avoid cancellation of orders and assure suppliers of business continuity for the time being
• Ensure all pending wages and severance payments are paid to all employees and workers
• Review negotiated prices and ensure future price negotiations include the increase in costs for energy, other raw materials and labour exposed to inflation
• Engage with unions and suppliers to explore innovative remedial solutions to support workers
• Work collaboratively to consider other actions to improve respect for human rights in the context of Sri Lanka’s economic crisis.