Leveraging Desperation: Apparel Brands’ Purchasing Practices during Covid-19
A July – August survey of 75 garment suppliers in 15 countries reveals shocking changes in brands’ pricing and purchasing practices on new orders. The report finds that brands are using suppliers’ pandemic-driven desperation as leverage to drive down prices and impose onerous payment schedules on new orders they are placing. Many suppliers are being forced to accept orders below cost, potentially forcing them out of business and putting workers’ livelihoods at risk.
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US and EU trade data provide considerable evidence of a significant loss in value due to order cancellations. A total of USD 16.2 billion was lost, combined, from April through June in the US and from April through May in the EU (a number that will almost certainly increase when June data are available for the EU). Assuming that wages make up 10 percent of the value (at import price), what this suggests is the loss of more than USD 1.6 billion in workers’ wages, based on reduced imports and retroactive price discounts for the US and EU markets alone.
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This paper by the European Center for Constitutional and Human Rights, ILAW, and the Worker Rights Consortium explores the power imbalances between brands and suppliers and their contractual manifestation. It examines the law of force majeure and related doctrines and how they apply to the current circumstances. The paper explains how brands violate their due diligence obligations through canceling orders.…
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The report “Un(der)paid in the pandemic” analyzes nonpayment of wages to garment workers during the months of March, April, and May resulting from order cancellations by apparel brands, unpaid leave, and state-sanctioned wage cuts during the Covid-19 crisis. Based on a review of news reports and information from worker organizations, we estimate that across South…
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This report, authored by Pennsylvania State University’s Center for Global Workers’ Rights, in collaboration with the WRC describes the results of a survey of more than 300 garment suppliers in Bangladesh and has just reported the results. The survey found that 80 percent of apparel suppliers have been forced to slash employment as a result of buyers canceling orders—with nearly 60 percent reporting they have shut down most or all of their operations. Meanwhile, four out of five fired workers have not received the severance pay mandated by law. The survey found that almost none of the buyers had offered suppliers any financial support to help pay workers.
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Co-authored by WRC executive director Scott Nova and the CCC’s Ineke Zeldenrust, this white paper explains how brands and retailers are shoring up their own finances by refusing to honor contracts with apparel suppliers, forcing suppliers to the brink of bankruptcy and causing large-scale dismissals of workers. The report calls for brands to pay suppliers what they owe them, for the swift mobilization of international financial resources to provide income support to garment workers, and for deeper reforms to address the supply chain inequities that Covid-19 is laying bare.
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There are few research studies on the labor conditions of home textile factory workers. This report aims to fill this gap and to test the supply chain labor standards of the brands that are driving the growth of Bangladesh’s home textile industry against the actual conditions of workers in the factories that produce these goods. Workers interviewed for this report revealed violations of Bangladeshi labor law and brands’ codes of conduct related to building safety, payment of wages, working hours, freedom of association, and abuse.
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The government and apparel factory owners in Bangladesh have carried out a brutal crackdown on garment workers in retaliation for largely peaceful protests against the country’s extremely low minimum wage. Since December of 2018, at least 65 workers have been arrested and subjected to baseless criminal charges, brought at the behest of factories that supply brands like H&M, Mango, and Next.
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