Pressure from Global Retailers Leads to Abuses in Factories: Report

Photo Credit: Abir Abdullah/EPA/Shutterstock
April 25, 2019

By Spencer Feingold

Despite public commitments from global apparel brands for fair and safe labor standards, retailers are incentivizing their suppliers to take cost-cutting measures that result in perilous and abusive work environments, a damning report released this week revealed.

The report from Human Rights Watch (HRW) called on companies to end business practices that pressure factory owners to ignore worker’s rights.

“We have brands and retailers saying to factories that there should be a certain standard of working conditions in the factories, but then they do not accurately cost for it,” Aruna Kashyap, senior counsel at HRW and the report’s author, told Cheddar.

HRW released their report, titled “‘Paying for a Bus Ticket and Expecting to Fly’: How Apparel Brand Purchasing Practices Drive Labor Abuses,” to mark the sixth anniversary of the Rana Plaza tragedy, which was the worst garment factory disaster in history. Over 2,000 workers were injured and 1,138 were killed when a factory collapsed in Dhaka, Bangladesh on April 24, 2013.

Retailers “squeeze suppliers so hard financially that the suppliers face powerful incentives to cut costs in ways that exacerbate workplace abuses and heighten brands’ exposure to human rights risks,” the report read.

Within the last year, HRW spoke with suppliers across Asia that recounted relentless pressure from international retailers to meet enormous demand for poorly forecast garment orders.

The report found that companies were not adjusting pricing for local wage increases, shortening the due dates for shipments, and delaying payments to suppliers — all of which worsens labor abuses in the factories. Among other pressures, retailers are also imposing unfair penalties for missed production deadlines.

Brands “try to drive down the price without accurately costing for labor and social compliance,” Kashyap said. “It takes a toll on workers because factories begin to make them work excessive overtime.”

In order to ensure anonymity, HRW did not focus on one country or the suppliers for specific retailers. Withholding brand names was also acceptable since the dubious practices are industry-wide, the group found.

In 2018, nearly 40 percent of retailers were late to pay their suppliers and 60 percent of suppliers said they were not given incentives to comply with their buyers’ public labor standards, according to Better Buyer, a watchdog group that allows suppliers to rate retailers purchasing practices.

"It is easy to write a code of conduct in which you urge suppliers to maintain certain standards in the field of overtime and wages, but those words are meaningless if the same brand then ruthlessly pushes for low prices, short lead times, and maximum flexibility," the Clean Clothes Campaign, an Amsterdam-based alliance of NGOs and trade unions, told Cheddar.

‘Jail-Like Atmosphere at the Workplace’

HRW interviewed workers in Bangladesh, Cambodia, India, Myanmar, and Pakistan, who detailed abusive practices pushed upon them by factory owners.

“I hate the jail-like atmosphere at the workplace, the ban on going to the bathroom, the ban on getting up to drink water, the ban on getting up at all during work hours,” Fawzia Khan, a 24-year-old factory worker in Pakistan, told HRW.

In order to drive down costs and meet short deadlines, the report found that suppliers were hiding excessive overtime hours, suppressing wages, and employing child labor, among other strategies that increases human rights risks.

There is a “skewed power relationship between brands and suppliers,” Kashyap noted, which leaves factories unable to negotiate adequate payment plans.

"To prevent discrepancies between words and actions, brands should sign time-bound agreements enforceable in a court of law with local and/or global trade unions to make sure their pledges become reality," the Clean Clothes Campaign said.

The HRW reports follows several public instances of abuse in the fashion world’s supply chain.

In 2017, shoppers at Zara in Istanbul, Turkey were shocked to find tags hidden in the clothes that read "I made this item you're going to buy, but I didn't get paid for it!" The notes were left by workers from a local garment factory that supplied Zara and other international brands. The manufacturer went bankrupt a year earlier and workers were left unpaid. In a statement, Zara said it "immediately took action to try to help workers in this unfair situation.”

H&M — which has 1.6 million textile workers employed by its suppliers — and Gap were also singled out in a report last year from Global Labor Justice that exposed odious gender-based violence in their factories.

No specific brand — including Zara, H&M, or Gap — were named in the HRW report.

“Issues like wage-related problems and violations related to overtime regulations, and discrimination, for example based on pregnancy, and casual hiring continue to remain problems in the industry,” Kashyap said.

HRW called on global retailers to adhere to international regulations, ensure proper forecasting for garment orders, and institute contractual reform to develop fair purchasing agreements with suppliers. The groups also urged governments and international bodies to develop and strengthen legislation that mandates a humane supply chain.

For full interview click here.