Supplier Survey and New Brand Commitments to Pay for Orders in Production

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To:WRC Affiliate Universities and Colleges
From:Scott Nova
Date:April 2, 2020
Re:Supplier Survey and New Brand Commitments to Pay for Orders in Production

The WRC has collaborated with Penn State’s Center for Global Workers’ Rights on a survey of Bangladesh’s factory owners, in order to assess the impact of the large-scale cancellations and postponements of apparel orders. I want to share the report of the survey results with you. At the end of the report, you will see recognition of the positive commitments a number of brands and retailers have made to minimize negative consequences for suppliers and workers, by honoring existing contracts.

As you know, the strategic public health response to the coronavirus pandemic has caused demand for apparel to plummet, which is leading brands and retailers to cancel orders. This has included, in many cases, orders that are already in production or are complete and ready to ship. This is resulting in large-scale dismissals of workers, often without pay. We recognize that the crisis is creating enormous challenges for brands and retailers; at the same time, it is our hope that companies will manage the crisis as responsibly as circumstances allow, including making their best efforts to honor contracts with suppliers.

The survey illuminates the severe financial impact on suppliers of the cancellation of orders already in production or already complete. It also shows that where such cancellations result in the dismissal of workers, these dismissals are happening, in most cases, without workers receiving legally mandated compensation. This is an industry-wide problem that is not specific to university logo apparel but, of course, has implications for the collegiate industry.

The WRC, along with other labor rights organizations, has been urging brands and retailers, where they are financially able, to honor contracts on orders already in production or complete. I am pleased to report that a number of major brands and retailers have demonstrated their commitment to doing so. You will see a list of these companies on the final page of the report. We expect that additional brands and retailers will follow suit. This will substantially mitigate negative impacts of the crisis on apparel suppliers and apparel workers globally, including workers making collegiate apparel. The WRC will be monitoring the approach taken by key brands and retailers on an ongoing basis.

As always, please let us know if you have any questions or would like to discuss.