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Why This Labor Expert Urges Brands to Stop ‘Shooting Yourself in the Foot’

“Multinational corporations talk about engaging stakeholders and listening to worker voice, but doing this in a meaningful way requires trust that is built over time. That trust has been eroded in multiple ways.”

So writes Judy Gearhart, senior researcher in residence at the American University School of International Service’s Accountability Research Center, in a report about effective transnational supply chain advocacy.

Case in point: Despite the flurry of public commitments to a living wage, many brands and retailers have repeatedly refused to pay suppliers more for products when garment workers’ wages do increase, she told Sourcing Journal. More recently, the spate of canceled orders at the start of the Covid-19 pandemic left millions of industry employees on the knife edge of destitution, with many, even today, still struggling to claw back their lost wages and severance.

“Any remnant of trust that existed before Covid, I think, was decimated after those orders were pulled so quickly,” said Gearhart, who served as executive director of the International Labor Rights Forum before it merged with Global Labor Justice in 2020.

Recovering—and subsequently growing—that trust requires a new form of accountability, one that goes beyond voluntary agreements and codes of conduct, argues the paper, which looks at the roles that the Bangladesh Center for Worker Solidarity (BCWS) and Cambodia’s Center for Alliance of Labor and Human Rights (CENTRAL) have played in championing enforceable, multiparty agreements amid the shrinking civic space in Bangladesh and Cambodia. CENTRAL’s Tola Moeun and BCWS’s Kalpona Akter have become leaders in the Clean Clothes Campaign’s network of trade unions and workers’ rights organizations.

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The relationship between fashion brands, suppliers and workers is frequently antagonistic, but it doesn’t have to be, Gearhart said. Frameworks like the Accord on Fire and Building Safety Accord in Bangladesh, the Lesotho Agreement and the more recent Dindigul Agreement offer a new worker-centered approach that should be viewed not as an increased liability burden but as “your best troubleshooting mechanism,” she said. She pointed to the speed at which organizations such as the Clean Clothes Campaign, the Asia Floor Wage Alliance and the Worker Rights Consortium were able to document wage abuses at the height of the pandemic.

“If we could somehow get past that resistance and acknowledge that there’s this incredible network of experts that are able to provide real-time information and support a responsible solution,” Gearhart said.

It was Moeun’s critcisms of Better Factories Cambodia’s lack of transparency that led the International Labor Organization (ILO) initiative to be more forthcoming with its data, as well inform the fact that the Bangladesh Accord needed that same level of openness. There’s a power in movement building and knowledge building that no social auditing group has come close to replicating, Gearhart said.

“Neither BCWS nor CENTRAL has ever called for a boycott—they want things to be better for workers, not to end,” she added. “We need to see them as allies.”

‘Brands cannot bind themselves’

Moeun, for one, is tired of the status quo. “People keep talking about labor standards, people keep talking about social dialogue and so on and so forth for many, many years,” he said. “We have the Universal Declaration of Human Rights. Most of the producing countries have ratified the core conventions of the ILO.”

But the truth is that most workers in the global South are denied many fundamental freedoms, including the freedom of association, the right to collective bargaining, the right to organize, the right to strike and “especially the freedom of expression,” Moeun said. Brands, he added, have the ability to shift things, whether with suppliers or governments, because “they are the money.”

Moeun has experienced this personally. In 2018, the Phnom Penh Municipal Court falsely accused him of embezzlement, which carried a maximum penalty of three years in prison and a fine of 6 million Riels ($1,478). The charge didn’t stick, however. The Fair Labor Association later rallied its member brands to write to the Cambodian government challenging the complaint. His freedom, he said, came down not to the country’s judicial process but to international pressure.

“Even though I really appreciate the action taken by the brands, it should not be the end of the brands’ intervention,” Moeun said. International laws are well and good, he noted, but if there’s no way to enforce them, they’re merely words on paper.

For Moeun, binding agreements are the best solution, particularly in spaces where democracy is under constant attack. CSR, he said, is not a binding agreement. Neither can brands make laws to “bind themselves.” He said that corporations should be using their leverage to help create social protections where they are in short supply. Without the rights to organize and collective bargaining, he said, problems such as gender-based violence and excessive overtime will continue to proliferate to the detriment of the entire industry.

“I believe that the consumer would not want to see the clothes that they‘re wearing come from the exploitation,” Moeun said. “We need to work collectively to fix this root cause. Brands should [be competing] fairly, not in the exploitation of labor.”

The need for ‘joint sovereignty’

Michael Bride, senior vice president of corporate responsibility at PVH Corp., approaches the issue from a unique vantage point. Before joining the Calvin Klein and Tommy Hilfiger owner in 2018, he was deputy director of the Bangladesh Accord. Prior to that, he worked for a trade union in his native Ireland. In short, he has had a view from all sides of the bargaining table.

“I think the binding agreement certainly has an element of accountability to it [but] there’s so much focus on the agreement, per se, like a piece of paper with the signature,” he said. “What has been missed and I think what continues to be missed with the Accord is that we had 140,000 safety findings, 2,000 factories and 220 brands, and we’ve had two arbitrations.”

What happened, he said, is that the Accord built a dispute-resolution mechanism within the governance of the Accord, where anything that was in dispute between parties had to first go to the steering committee for 28 days. It was only after that, when the steering committee had a chance to mediate and produce a report, did complaints go to arbitration.

“And in every single case, except for two, we managed to resolve that issue with the steering committee, which was at the time of the Accord, 50 percent brands and 50 percent unions and NGOs,” Bride said. “I’m not going to lie; some of those conversations were not pretty. But when you have a situation where there are 220 brands and 2,000 factories and you only have two of those issues because of this mechanism, I think that’s the piece that’s missing, right?”

Bride admitted that there were a number of Accord signatories that started out being very suspicious of labor unions. “And having just come out of the Pakistan Accord negotiations that were concluded last November, that suspicion is gone. Now you’re still going to advocate for what you want, there’s still going to be a back and forth but nobody assumes that the unions are trying to damage them.”

From PVH’s point of view—it’s a signatory of both the original Accord and the Pakistan one—if its suppliers are losing, it can’t win, he added. Bride also credits unions for persuading some of the bigger brands to sign the agreement in the aftermath of the Rana Plaza collapse in Dhaka 10 years ago. In Sweden, it was Unionen and Handels that nudged H&M Group. In the case of Zara owner Inditex, it was Comisiones Obreras, better known as CCOO.

There’s a common cause here, Bride said, but if brands want to “move the needle,” they have to commit to joint sovereignty. “It’s not just about working in partnership; it’s not just about respecting the other person,” he said. “And guess what, sometimes you won’t get everything your own way, and that’s O.K. Because it’s the legitimacy of the process that’s paramount and the outcome for rights holders that’s paramount.”

A system that already works

Binding agreements go very much “hand in hand” with mandatory due diligence laws being proposed by the European Commission and elsewhere, said Ineke Zeldenrust, international coordinator at the Clean Clothes Campaign.

“You need actual regulation to ensure that all brands are tied into that same logic so it can operate at the sector level,” she said. “Enforceable agreements can do that, too, but it’s only binding on the one that signs it. Regulation is binding on everyone, but it’s dependent on states to be willing to enforce it and on unions and civil society in states to push their governments [to do so].”

Due diligence is about preventing abuses from happening. The worker-centered approach that agreements like the Bangladesh Accord and the Lesotho and Dindigul Agreements take, however, stems from an “acceptance” that rights are being violated, sometimes on a massive scale, and that mitigation and remedy are necessary to make workers whole, Zeldenrust said.

She agrees with Gearhart’s assertion that workers’ groups, not CSR programs, are brands’ best bet for sussing out problems. “We are directly there with the workers on the ground and they are not,” Zeldenhurst said.

Rana Plaza was a tragedy that should never have happened, she said. The reason the Accord was able to come together so quickly was because a lot of the groundwork had already been laid for a safety program run by a similar multi-stakeholder task force. Only PVH Corp. and Tchibo would sign a Memorandum of Understanding for this so-called Bangladesh Fire and Building Safety Agreement, however, preventing plans from moving forward.

“We had been telling everybody, we had been warning everybody,” she said. “To me, the Accord, on the one hand, is a victory but on the other hand, also a failure because why did this have to take us so long? And why didn’t we manage to get this signed before the collapse?”

Zeldenrust said she found it frustrating that brands, before the Accord’s renewal and expansion in late 2021, showed signs of “falling back into their habits” of preferring their own voluntary mechanisms.

“It doesn’t make sense practically because the Accord model is actually cheaper because they collectivize the audit costs,” she said. “There are a lot of advantages from both an effectiveness and efficiency point of view.” It already includes a time-tested grievance mechanism, something that the European Union’s proposed Corporate Sustainability Due Diligence Directive could require.

Zeldenrust would like to see the agreement eventually include living wages, a demand from unions that didn’t make it past negotiations. But the “connection is there.” Despite the visible cracks in the Rana Plaza building, workers went back in because they were threatened with the loss of a month’s salary, which they could scarcely afford.

“Again, it’s on the industry that it refuses to apply a successful approach to the issue of wages,” Zeldenrust said.

What fashion needs are regulations to incentivize companies to negotiate, Gearhart said.

“Voluntary, confidential code-of-conduct audits are not having the impact because they de facto sideline worker organizations,” she said. “And if you’re setting up a system that de facto sidelines worker organizations, you’re undermining the ability of workers to organize. It really runs counter to what a lot of these groups have in their codes of conduct.”

Gearhart said that brands need to double down on efforts to defend workers’ right to speak out. If they’re not able to even signal that their rights are being violated, it’s “undermining anything anybody’s doing.”

“I think that between the proliferation of human rights due diligence laws and the forced labor import bans, there are growing incentives for companies to do a better job about knowing the human rights compliance issues in their supply chain,” she said. “The best path for having an early warning system and just addressing human rights risks on an ongoing basis is to work with the independent trade unions and local labor rights organizations that know the context and the issues day to day.”

Refusing to engage them in a meaningful way on an ongoing basis, Gearhart said, is tantamount to “shooting yourself in the foot” because “you just keep undermining the ability of trade unions and labor organizations to defend workers, and so you indirectly perpetuate further violations in your supply chain.”

“If corporations are not sitting down and negotiating with these groups and willing to sign an enforceable brand agreement, they‘re sending a de facto message to the employers and to the government that they don’t really support freedom of association and collective bargaining,” she added.