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Consumers Are Watching, But Is the Denim Industry Behaving Any Better?

2020 was a year of reckoning for many. The Covid-19 pandemic gave way to a world collectively enduring similar hardships, producing a sense of empathy that only a global crisis could inspire. Last year, consumers were more tuned into acts of humanity, and paid attention to corporations and brands that donated time, funds and resources to those in need.

Players throughout the denim industry did their part to assist, pausing regularly scheduled production and utilizing facilities for essential items such as face masks, personal protective equipment (PPE) and sanitization products. Some provided financial support for nonprofits and hospitals to assist local groups affected by the pandemic, and others supported their employees through disaster relief grants.

But while support was given to frontline workers in need of supplies and corporate employees affected by the pandemic, hardships felt throughout the rest of the supply chain—arguably the segments that needed the most support—were largely overlooked, and in some cases, deepened.

“The pandemic intensified the many crises already facing garment workers as a result of structural inequalities and exploitative practices within garment supply chains,” said Vincent DeLaurentis, director of outreach for Worker Rights Consortium (WRC), a labor rights monitoring organization.

These crises spanned unsafe working conditions, sexual harassment, violence, financial debts and more. According to Mostafiz Uddin, managing director of Bangladesh garment manufacturer Denim Expert Limited, brands pulling factory orders during the pandemic were “crippling Bangladesh’s apparel industry.” He detailed accounts of brands and retailers postponing the delivery of goods that had already been produced, others cancelling all new orders that had already been agreed upon, and some delaying payments to manufacturers for the apparel they had already shipped.

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And Uddin was not alone in his experience. A 2020 report from denim industry changemakers Transformers Foundation found that most of the denim suppliers polled experienced cancelled and delayed orders, as well as delayed payment and extended payment terms with no possibility for negotiation or discussion. Multiple suppliers also reported that their partners forced retroactive discounts, and one agreed to an extended payment plan only to have the brand file for bankruptcy two weeks later.

These breaches of contract started a domino effect, which directly impacted the livelihood of garment workers and their immediate dependents. “In short, suppliers’ disrespect and exploitation mean disrespect, exploitation and mass layoffs of garment workers,” the report stated.

Regions are still reeling from the fallout a year later. Countries like Bangladesh are exempting factories from another series of lockdowns to mitigate the financial hit from the pandemic, forcing workers to balance health risks with earning a paycheck.

“Things are not okay in the global fashion industry,” Uddin said, referencing high-profile bankruptcies such as the Arcadia Group. “The fact is that if 10,000 people lose their jobs in the U.K., this translates to 100,000 in other countries. This is what I am trying to explain to policy makers, to talk about purchasing practices and their impact around the world.”

Last month, Uddin singlehandedly began a letter-writing campaign to heads of governments in the Western world calling on them to open retail stores in their respective regions to keep businesses—and workers’ livelihoods—afloat.

Bad press

And brands’ and retailers’ unethical behaviors are coming to light. According to the WRC, today some of the world’s biggest brands are still withholding a combined total of $500 million—that’s half a billion—in severance for laid-off garment workers.

“Many brands have faced a spate of bad press in the wake of the pandemic as they moved quickly to retroactively cancel orders they had agreed to pay for and to furlough staff at retail locations, all while continuing to pay out dividends,” DeLaurentis said.

The injustice, coupled with a captive pandemic audience glued to news reports and social media, put a spotlight on companies’ ethical failures. #PayUp, a social media movement calling on corporations to follow through on their financial obligations, and the WRC’s Covid-19 Tracker, a list of companies acting responsibly and irresponsibly toward suppliers and workers, called out some of the biggest offenders and demanded change. While some, including Levi’s, Asos, H&M and Zara, are committed to paying in full for orders completed and in production, others have still made no commitment to do so.

American Eagle and Aerie, Bestseller, Cotton On, Urban Outfitters, Anthropologie and The Children’s Place are just some of the apparel brands that have yet to commit to making payments, according to the tracker.

DeLaurentis added that some of the biggest offenders are sweeping their unethical actions under the rug and covering them with Corporate Social Responsibility (CSR) programs that are little more than empty promises to do better. Programs initiated in the past year to provide life skills training for workers and better practices for farmers, for example, are helpful, but do not make up for wrongdoings.

“We believe that many brand initiatives were set up to evade the pressure to make legally binding commitments currently being called for by workers, unions and labor advocates,” he said.

A chance to do better

Companies are still finding ways to undue the damage caused during the pandemic, but they have examples from prior events to look to for guidance. History has shown that some of the most significant, long-lasting changes can come from widely publicized injustice. In fact, two programs that got it right, according to both DeLaurentis and Jeff Hermanson, director of global strategies at Workers United, a U.S- and Canada-based labor union, were the result of exposed wrongdoings.

Both gave praise to the Bangladesh Accord, a legally binding agreement between workers, factory managers and apparel companies ensuring the safe Bangladesh garment factories. The agreement was formed after the collapse of the region’s Rana Plaza factory in 2013 which killed 1,133 people and critically injured thousands more.

The Accord, which was set to expire in five years, was extended in 2018 with a Transition Agreement that will be in effect until this year, when it will evolve into the Ready-made Garment Sustainability Council (RSC). The RSC will continue with factory inspections, remediation monitoring and safety training at some 1,700 facilities supplying Accord signatories.

The other program that was praised for its success was the Lesotho Agreement, an initiative that serves 10,000 workers at four garment factories in the Southern African nation, and aims to empower local unions, as well as human and women’s rights groups through gender-based violence and harassment (GBVH) awareness trainings, a confidential reporting system and enforcement processes led by independent nonprofit Workers’ Rights Watch. The program was established in response to reports of abuse within Nien Hsing Textile—a manufacturer that produces jeans for Levi Strauss & Co., The Children’s Place and Kontoor Brands—in 2019.

According to Hermanson, what made this program so successful was the supplier negotiations that were held during its development.

“An important element was that, after the brands agreed on a program, negotiations took place with the supplier, a 10,000-worker manufacturer, for an inter-locking agreement,” he said. “This gives the Lesotho Agreement more staying power, since the supplier is a signatory to the program, along with the trade unions that represent the supplier’s workers.”

Still, these programs are not foolproof and require constant monitoring. Despite the rigorous pledges in the Bangladesh Accord, just last month, at least one worker died and more than 40 were injured or sickened as a result of a fire at a garment factory in the capital of Dhaka in Bangladesh.

Who can help

In addition to better brand and supplier relations, local governments can also make a significant difference in supporting supply chain workers’ rights during the pandemic and beyond. The Garment Manufacturers Association of Cambodia (GMAC)—the trade organization that represents the nation’s garment and footwear industries—announced the Cambodian government is seeking to vaccinate 100,000 workers in April, 200,000 in May and another 200,000 in June.

The news comes just as the United Nations Educational, Scientific and Cultural Organization (UNESCO) and GMAC announced the rollout of a literacy program in 11 factories across seven provinces to increase employee skills in the workplace.

Consumers can also play a role by educating themselves on the garment supply chain and supporting reputable brands. And according to James Bartle, founding CEO of ethical denim brand Outland Denim, it’s never been easier to identify which brands are truly doing the work.

“It is a positive thing that between increased transparency in how brands work, and the power consumers hold particularly with the aid of social media, the industry is being held accountable,” he said.

Despite this, however, he noted that consumers can’t bear too much of the burden. “While consumers need to be celebrated for really helping to lead this movement, it shouldn’t be up to them to clean up the mistakes of the industry,” Bartle said. “It’s good to see other stakeholders such as brands taking responsibility.”

Ultimately, according to Hermanson, it requires everyone to operate with respect.

“In order to fundamentally improve conditions in the global apparel industry, every actor needs to be more conscious of the interests of the other actors and promote organization of each group of actors, leading to a multi-level negotiation for fair terms and conditions,” he said. “This can happen consciously and peacefully, through the thoughtful agency of the brands, suppliers and workers, or it can happen through blind and destructive struggle as workers respond to abuses and call upon their allies to expose the abuses and force change through pressure on brands and collective action at the factory level.”