LONDON – After writing about the legally-binding, transparent, accountable, Bangladesh Accord last week, this week we come to the ILO ‘Call to Action’ for the garment industry – which is anything but these things.
We’ve been following this initiative for some time, waiting for the big release of funds into garment supply chains (so desperately needed right now) which were promised when this was announced with the usual fanfare last spring.
The ILO Call to Action for the garment industry was launched in April 2020. This was at the height of the cancelled orders crisis, a time when brands were cancelling orders with garment manufacturers in countries such as Bangladesh, Pakistan and India.
Through spring and summer, many brands were using dubious Force Majeure (‘act of god’) clauses to squirm out of contracts, and only began to pay for some of these orders after they had been publicly named and shamed.
Some behaved worse than others, and for a decent summary of where brands are on that front, the Covid-19 Brand Tracker of the Worker Rights Consortium is very useful.
The relevance of all this is that the ILO’s Call to Action was timely for brands. The logic of it, according to the ILO’s press office, was that employers, workers, retailers and major brands would form an international working group – convened by the ILO – to “address the already serious damage to the garment industry caused by the COVID-19 pandemic.”
We were not the only ones concerned that some of the brands being allowed to “endorse” this had been contributing to the “serious damage to the garment industry” the initiative claimed to be addressing (and in any case, what on earth does “endorse” mean here?)
Among these were Bestseller – still on the wrong side of the WRC Covid-19 tracker outlined above, despite having a billionaire owner; Primark, which had to be dragged kicking and screaming to pay for cancelled orders, and C&A (ditto).
The Sustainable Apparel Coalition is also a signatory. Many of the SAC’s members have behaved with astonishing negligence where supply chains are concerned during the coronavirus pandemic. These issues are, again, a matter of public record.
We have asked the SAC whether such members would be censored or banned. The answer was no (even though such a move would surely send a powerful message to the industry, in terms of drawing a line in the hand around what is and is not acceptable around purchasing practices).
Other signatories include the likes of adidas, H&M and Inditex (both of which quickly agreed to pay for all cancelled orders, it should be noted) as well as unions including IndustriALL and ITUC.
From a PR angle, brands obviously milked their endorsement of this initiative to good effect. To offer one of numerous examples, Bestseller said: “By endorsing the statement Bestseller commits to take action to protect garment workers’ income, health and employment and support employers to survive during the COVID-19 crisis, and to work together to establish sustainable systems of social protection for a more just and resilient garment industry.”
The insincerity of this statement would not have been lost on Bestseller suppliers which saw orders cancelled without by Bestseller, which at one stage imposed unilateral price cuts of up to 25 per cent on orders, as well as 90-day payment terms on many suppliers. Put yourselves in the shoes of a factory owner here: how on earth would you be able to pay the very workers the ILO initiative was designed to protect if all brands were behaving like this?
At its heart, then, there was always a huge contradiction where this initiative was concerned. On the one hand, brand signatories were being asked to “commit to working with governments and financial institutions to mobilize sufficient funding to enable manufacturers to ensure business continuity including payment of wages, as well as income-support and job-retention schemes to address the impact of the crisis.”
On the other, it is an awkward truth for all involved that many brand signatories have employed cowboy tactics to avoid having to pay for orders, demand whopping discounts on orders (which place into jeopardy the ability of suppliers to cover wages), and to impose 90 or even 120-day payment terms on orders.
We did put this to the ILO around the time that the likes of Bestseller were signing up. Nothing changed.
We also recently put a number of questions to the ILO which they in turn sent to the coordinators of the Call to Action – namely the International Organization of Employers, the International Trade Union Confederation, and IndustriALL Global Union.
We asked why it was impossible to find out whether brands were putting any money into this; why brands which had reneged on payments to suppliers had been allowed to endorse it, and whether this was facilitating greenwashing (and misleading stakeholders); whether they would share full details so far of who has contributed what, what funds have been leveraged and precisely how much money so far has reached garment workers; and, more generally, about the lack of accountability (or legally-binding elements).
Rather than provide direct answers to our specific questions, they sent a blanket statement which avoided the specifics we had asked them to address. Why do organisations do that? You ask one thing, they answer another. Suffice to say, we won’t publish their PR statement. If they wish to answer the perfectly reasonable questions we asked, they know where we are.
So what do we know in terms of figures and the amount of money which has reached garment workers? To our knowledge, the only funding sources so far are relatively small amounts of money from governments (yes, money provided by you and I for an initiative brands, by being encouraged to put their name alongside, are being allowed to take credit for).
The Call to Action only covers eight countries, and in only four of those are garment workers currently slated to receive cash transfers under a global multi-donor ILO initiative, with funding from the German Federal Ministry of Economic Cooperation and Development (BMZ) in the following amounts: €1.49m – Bangladesh; €1.95m – Cambodia; €4.9m – Ethiopia; €2.2m – Indonesia.
The EU and German Government fund for Bangladesh – the largest fund the Call to Action points to – amounts to €113m Euro.
Here’s what else we understand: in Bangladesh, where the hundreds of thousands of workers have lost their jobs or seen sharp reductions in pay, the scheme provides for Tk 3000 (€29.31 euro) per month for eligible (laid-off disabled, insolvent) workers for three months.
To our knowledge, only 3,266 workers have been deemed eligible thus far, meaning that only €287,179 of the €113m – or, a quarter of one per cent of the fund – has been committed to Bangladeshi garment workers thus far.
In your own time folks.
Of course, this is all chicken feed in the context of the global apparel industry. For context, Primark made £362m for the year ending September 2020. Adidas made US$1.1bn profit for 2020 and H&M US$322m.
This, in a year when the world’s economy was in complete freefall, is a remarkable testament to their agility and ingenuity (if only they could apply some of this ‘can-do’ to sustainability issues).
Why hasn’t the Call to Action encouraged brands to loosen their purse strings? Why were efforts not made to get something legally-binding implemented to that effect right at the start of all this (which realistically would have been the only sure-fire way to secure much-needed brand funding). Why have brands been allowed to gain kudos for not putting in a penny? Why have issues around accountability and transparency not been addressed?
And why, after almost a year, has barely a penny reached garment workers as a result of this initiative? Why are these things taking so long?
On a more general level, the apparel industry has spent years talking about social issues in garment supply chains yet real wages remain stubbornly low, leaving garment workers hopelessly vulnerable to the kind of economic shocks we have witnessed this past year. The pandemic has exposed the deep fault lines of the voluntary CSR model and its ability to provide protection to garment workers in times of crisis, which is why so many of them have gone hungry in the current crisis.
Yet another voluntary programme, which has provided cover for brands without even asking for any financial contribution in return, was absolutely the last thing the industry needed in response to the pandemic.
As evidenced in our piece on the legally binding Bangladesh Accord last week, there is a better way which, unlike voluntary initiatives such as this, it is not dependent on a wing and a prayer.
Our industry can, and should, be doing so much better.