PARIS – A survey of textile and apparel suppliers found more than half have accepted brand and retailer orders that don’t cover production costs, hampering their ability to invest in decent environmental and labour standards. The increasing pace of fashion also means up to half of suppliers have insufficient lead times, according to the survey, with pressure to produce more rapidly increasing the likelihood of them resorting to casual labour.
The findings were raised at this year’s annual OECD Forum on Due Diligence in the Garment and Footwear Sector. The forum took place to review progress in implementation of the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector, which establishes a common understanding of due diligence in the sector to help companies meet the due diligence expectations laid out in the OECD Guidelines for Multinational Enterprise.
A OECD discussion saw Daniel Vaughn-Whitehead from the ILO present findings from a joint ETI/ILO survey on purchasing practices.
“[The survey] clearly summarised the links between poor purchasing in global value chains and the ability of suppliers to uphold good labour standards,” said Martin Buttle, category leader, apparel and textiles with the ETI.
Highlighting some of the findings of the survey, Buttle said the lack of written contracts was also a major problem: “Unwritten contracts are usually more difficult to enforce and may lead to serious consequences, including financial losses, performance issues and also lack of job security for workers (yet in Bangladesh, for example, 38 per cent of suppliers said they had unwritten contracts).
“Only 17 per cent of suppliers considered their orders to have enough lead time; the majority reported that more than 30 to 50 per cent of their orders had insufficient lead times. Worryingly, lead times are getting shorter and suppliers must produce more rapidly, which they increasingly do by resorting to overtime, casual labour or outsourcing of production in order to meet deadlines.”
This point reinforces the increasing pace of fashion, lead by a breed of ultra fast fashion retailers such as Boohoo.
Adds Buttle: “Price is one of the most important criteria for buyers, who, according to many suppliers impose extreme pressure on suppliers’ price quotes. Significantly, 39 per cent of suppliers reported having accepted orders where the price did not allow them to cover their production costs. In the apparel and textiles sector (my area of expertise) this outcome is reported by 52 per cent of suppliers.
“As speakers from Turkey and Bangladesh attested, these have very real impacts on suppliers’ businesses and their ability to invest in good labour and environmental standards.”