Apparel makers lack a common definition of what constitutes “sustainability,” “transparency” or “ethical sourcing.” And in the absence of a uniform standard, each company can assess its ethical record independently and is free to give themselves all the accolades they like. But that rewards clever marketing and storytelling, not actual monitoring and accountability — and leaves consumers without any way of discerning between brands that meet high labor standards and those that only talk about it.
As a recent report by the Human Rights Watch explains, supply chain transparency practices vary immensely among apparel companies. Many pick and choose what details to publish about their labor and human rights practices. Others refuse to publish supplier factory information at all.
The majority of companies measure the effort they’re making — touting their own policies or codes of conduct — but stop short of assessing whether those efforts are delivering their promised effects, according to new research by New York University’s Stern Center for Business and Human Rights. “Having strong policies in place around workplace safety or wages is important, but it does not guarantee that workers are in fact safe and adequately paid,” said Casey O’Connor, who co-authored the report.
That leaves consumers in the dark about the type of labor standards they’re supporting.
“It’s very hard to distinguish,” said Dorothée Baumann-Pauly, research director at NYU’s Center for Business and Human Rights. “The facade looks identical.”
The problem has gained new visibility with revelations of the poor labor conditions in factories making clothing and shoes for Ivanka Trump’s fashion line. The factories severely underpaid workers and forced them to work excessive overtime, according to activists for China Labor Watch who made headlines when they were arrested by the Chinese government. The watchdog had previously alerted the brand to alleged labor abuses, which it ignored. This wasn’t the first time: the Fair Labor Association also found that another factory making Ivanka products was in violation of two dozen international labor standards, and paid its workers little more than a dollar an hour.
Though Trump’s company lags behind other big brands, it is hardly alone.
Less than two decades ago, major apparel companies didn’t reveal any information about their supplier factories. That began to change after Nike came under scrutiny in the late 1990s for abusive labor practices. Phil Knight, then-chief executive, bemoaned that the brand had “become synonymous with slave wages, forced overtime, and arbitrary abuse.” By 2005, Nike and Adidas published names and addresses of all their factories. Patagonia, Levi Strauss and Puma followed suit.
But transparency alone isn’t enough, Baumann-Pauly warned. She thinks the obsession with the word has led companies to conflate transparency with accountability. “You can disclose lots of information, but is it the right information to hold factories to account? And is there someone who picks up that information and acts on it?”
Frameworks for universal standards already exist. The International Labor Organization (ILO), a U.N. agency founded in 1919 as part of the League of Nations, creates and maintains a system of international labor standards that set out basic principles and rights of work. Monitoring mechanisms exist too. The Fair Labor Association (FLA), a non-profit formed in 1999 as a collaborative effort of universities, civil society organizations and businesses, evolved out of a taskforce created by President Bill Clinton in the wake of child labor and sweatshop scandals. It uses the standards of the ILO to monitor companies’ supply chains and protect workers. Participating companies sign up to a two or three-year implementation schedule, after which they open up their factory doors to the FLA for evaluation.
“We evaluate the action on the ground, the internal systems, the conditions for workers, against the benchmarks,” said Sharon Waxman, the FLA's president. If companies meet the standards, they are accredited — a process that must be renewed every three years with new evaluations.
The problem is that FLA accreditation has yet to go mainstream. Just 23 apparel and footwear companies are currently accredited. Twenty-seven others are seeking accreditation — but this is still just a fraction of an industry whose firms number in the thousands.
Meanwhile, the current system allows companies to continue profiting off exploited laborers.
Many brands, claiming to self-monitor, focus only on factories with which they have direct agreements and ignore the back chain of unauthorized sub-contracting to smaller factories. In the wake of the 2013 collapse of Bangladesh’s Rana Plaza building, in which over 1,100 workers died, over 200 brands signed up for the Bangladesh Accord and the Alliance for Bangladesh Workplace Safety, committing to improving safety standards by summer 2018.
Yet these initiatives, aimed at ensuring factory safety, cover only about 2,000 out of 8,000 garment factories in the country, according to a study by BRAC University in Dhaka. That means approximately 3 million workers toil in factories that fall outside Bangledesh’s monitoring and remediation mechanisms.
“These brands know,” Baumann-Pauly said. “They give out orders that exceed the capacity of the facility they audit. It’s a known secret.”
An assessment by NYU Stern has found that four years later, only 79 factories have passed third-party inspections set up by the Accord and the Alliance. The rest remain critically behind schedule for fixing structural, fire and electrical issues.
Genuine commitment to sustainability — rather than merely the show of it — requires monitoring of the entire supply chain and a willingness to meet internationally-recognized standards. For most brands, this is still more than they’re ready to do. Pressure from the public and from companies that do meet the standards could change that.
“The FLA has to become known to consumers and investors as the gold standard,” Baumann-Pauly said. She emphasized that mass-market fashion and respecting human rights are not incompatible. Indeed, the FLA-accredited companies include major brands like Nike, Adidas, New Balance, Puma and Patagonia. Yet amid all the noise, these companies get mingled with those that just spout rhetoric. They’re avoiding the business risks associated with sub-par supply chains, but they aren’t reaping rewards from consumers for their good behavior.
Consumers care about sustainability, and they may be interested to know which brands are accredited and which aren’t. “The American consumer doesn’t want to buy products made under abusive conditions,” said Phil Knight of his decision to bring Nike’s factories into line.
To better act on that sentiment, however, consumers need a clear choice between products that actually take care of their workers and those that just talk about it.