Why We Need Corporate Transparency on Factory Closures

Covid-19 has meant a huge drop in demand for apparel, resulting in many closures of garment-producing facilities, with many more expected. Factory closures have sweeping social impacts, both short and long term, with a single closure often affecting the livelihoods and life prospects of thousands of workers and their dependents.

When closures are carried out lawfully, with workers receiving the benefits they have earned, this at least ameliorates the impact. When they are not carried out lawfully, harms to workers are worsened.

Given the magnitude of the impact on garment workers, accurate real-time data on factory closures are necessary to track job losses and the effects on workers. Brands and retailers at minimum should publicly disclose facilities in their supply chains that have closed. In recent years, a growing number of companies are publicly disclosing their supplier lists spurred by labor and human rights advocates, such as the Transparency Pledge Coalition. Brands and retailers that already disclose this information acknowledge the importance of sharing factory details so that when abuses happen, they can be resolved. The current crisis underscores the need for companies to not only disclose their supplier lists but also those facilities that have closed.

Public disclosure of closed facilities is only a small part of corporations’ responsibility to ensure that workers in their supply chains are not unlawfully terminated because of their union activities, their gender, or their migration status and that when terminations occur, workers receive legally mandated severance and other benefits owed to them. Such disclosure is, however, an important step.