WASHINGTON: A new policy paper shows how retailers such as Bestseller, Kohls, M&S, Primark and Debenhams used force majeure and other legal loopholes to stiff suppliers during the coronavirus pandemic.
The paper says brands responded to the pandemic by suspending or cancelling orders with their suppliers worldwide. In order to cut costs further and improve cash flow, the paper points out how many brands refused to pay for completed orders (some already shipped) or those in mid-production, or demanded better payment terms or sharp discounts on the agreed contract price in order to accept them.
“These actions by some of the industry’s largest brands showed no apparent concern for the impact these decisions would have on their suppliers and the millions of low-wage workers whose labour, for decades, has supported the industry and fuelled its profits,” says the paper. “Though some brands subsequently agreed to pay for these orders in the face of public criticism over the devastating impact of order cancellations on workers in their supply chains, other brands still refuse to pay.”
The paper calls for better access to accountability mechanisms for workers to enforce brands’ responsible supply chain practices.
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