More Brands Paying for Orders, Averting Destitution for Apparel Workers

To:WRC Affiliate Universities and Colleges
From:Scott Nova
Date:June 2, 2020
Re:More Brands Paying for Orders, Averting Destitution for Apparel Workers

I write to update you on the increasingly successful efforts of the WRC and other organizations to ensure that leading apparel brands honor their obligations to suppliers and workers during the current crisis.

As we have reported, the WRC has been working for the last two months to address the most urgent challenge facing garment workers, including those making university apparel: the decision of many leading apparel brands and retailers, at the outset of the Covid-19 crisis, to retroactively cancel apparel orders that suppliers and workers had already produced. This sudden withdrawal of billions of dollars in contractually promised payments threatened the survival of factories around the world and put the jobs and livelihoods of millions of garment workers in jeopardy. While the crisis facing many brands and retailers is very real, ignoring contractual obligations and pushing the economic pain of the pandemic down the supply chain onto the backs of suppliers and workers is not a responsible approach to the crisis.

The WRC is conducting interviews with workers who have lost their jobs at factories where brands are refusing to pay suppliers. The experiences of these workers make clear why it is so important for brands and retailers to honor their obligations. We interviewed a worker at a factory in Bangladesh, producing for the brand Primark, which canceled orders across the board when the crisis began. She lost her job at the end of March. Since then, she told the WRC, “I did not taste a piece of fish or meat, not even a single egg.” She continued, “[A few days ago], I went to the vegetable market…I bought some rotten and broken vegetables with low price…I feel like a beggar…” The worker added: “I have a [$25] debt to the grocery shop…[the shop owner] gave me some days till [the] Eid [holiday], but I don’t know how I will pay…” The worker explained that her daughter and mother, who live in her home village, are entirely dependent on her, but she has had no money to send them for several weeks, and they are running low on food: “The last [$10] I had, I sent that already.” The worker concluded, “My coworkers are also in trouble…Now only Allah can save us…” This worker’s situation is comparable to that of hundreds of thousands of others in Bangladesh and millions more across the global supply chain.

The WRC recognized from the outset of the crisis that the most effective way to reduce the massive loss of jobs and income unfolding throughout the industry was to persuade major brands and retailers to honor their obligations to suppliers. We have worked for the last two months, in conjunction with other human rights and labor rights organizations, to urge brands and retailers to pay their bills. Because most collegiate product is made at factories that also produce for major non-collegiate brands, success in this effort has profound implications for hundreds of thousands of workers that make university logo products.

Very substantial progress has been achieved through this effort. As the WRC’s “Brand Tracker” shows, there are now 16 major brands and retailers that are committed to paying in full for all orders that were in production, or completed but not paid for, as of the inception of the crisis. We estimate that this represents more than $10 billion in payments to suppliers. I am pleased to report that Nike, adidas, and Under Armour are all among those brands that are honoring their obligations to suppliers and workers.  

For most, though not all, of the brands and retailers now paying in full, this commitment represents a reversal of an initial decision to cancel many—or all—of their orders. This includes major industry players like PVH (Calvin Klein and Tommy Hilfiger), H&M, the giant British retailer Tesco, and Inditex (Zara). To give you a sense of the scale involved, these four corporations alone canceled more than $350 million in orders in March—just in Bangladesh. That translates into a month of lost wages for more than 350,000 workers, in a country that represents a modest fraction of a typical brand’s production.

The success that has been achieved in persuading these and other leading brands and retailers to honor their obligations to suppliers and workers has enabled thousands of suppliers around the world to pay wages over the last two months and to keep many of their workers employed.

We estimate that several hundred factories making university logo goods have benefited from this progress and have been able to pay their workers in accordance with the law and university labor standards—averting violations of university codes and enabling workers to support their families. Since most of the countries exporting apparel have little or no unemployment insurance, and since few garments workers have any savings they can fall back on, this continuation of wages and employment has helped avert a great deal of suffering.

There are, unfortunately, still a substantial number of major brands and retailers that have not committed to honoring their obligations in full. Some of these corporations have moved significantly from where they started, including the huge European retailer C&A, and are now paying for a substantial portion of their orders. Others, like Kohl’s, continue to pay for little or none of the clothing they ordered.

We are continuing our efforts to persuade Kohl’s, C&A, and others to honor their obligations in full.

It is important to stress that severe challenges remain for garment workers, not just as a result of unpaid orders, but because future order volume will be greatly reduced in the months ahead. This is why the WRC continues to advocate for the mobilization of funds from international financial institutions to help sustain workers’ income throughout the crisis.

As always, please let me know if you have any thoughts or questions about this communication.