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Nearly Half of Global Fashion Brands Have Not Committed to Paying for Finished Orders

As millions of garments workers face destitution because of canceled orders amid the COVID-19 pandemic, nearly half of the world’s leading clothing brands have yet to publicly claim financial responsibility for finished garments, a new study claims.

A survey of 35 brands and retailers published Thursday by the Business & Human Rights Resource Centre (BHRC) found that only 19, including H&M and Zara owner Inditex, have said they would pay for completed orders in full. According to the Workers Rights Consortium’s “COVID-19 tracker,” these to date include Topshop operator Arcadia Group, Bestseller (to a partial extent), C&A, Edinburgh Woolen Mills Group, Gap, J.C. Penney, Kohl’s, Urban Outfitters, Sears and Walmart-owned Asda.

Eight companies (23 percent) have requested retroactive “discounts” from suppliers for orders they had previously placed. Debenhams, the nonprofit pointed out, has asked for a whopping 90 percent discount. In addition, eight firms (23 percent), including Primark, have delayed settling their bills by extending their usual payment term by up to 180 days, or six months.

The pandemic has only exacerbated the “pre-existing conditions of severe power imbalance” between clothing brands, suppliers and workers, the BHRC noted.

“In the face of international disruption caused by COVID-19, too many fashion brands are only looking to protect their own profit at untold cost to workers who make the clothes they sell,” Thulsi Narayanasamy, senior labor researcher at BHRC, said in a statement. “Hard-nosed refusal to pay for orders in this pandemic is only an extension of how many fashion brands do business: driving down costs and dodging their share of the risk in supply chains.”

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There are pockets of positivity, however. Three brands—Hermès, N Brown and Zalando—said they have shortened payments for some suppliers to help ease cashflow problems during the crisis. Another 23 said they have taken steps to ensure workers are paid for March and April, and 19 companies said they are helping suppliers access financial resources.

“In contrast, some brands have stood out against this norm, showing leadership. This can build trust with suppliers and workers on whom their successful recovery will depend,” Narayanasamy said. “Laggard brands must follow this example or risk undermining efforts to protect workers. Brands being transparent about their action should be applauded as this allows civil society and workers to monitor whether commitments are being met.”

Still, a wide swath of workers have not been paid for these months or are being paid only part of their wages, the BHRC said, sparking large-scale protests in Bangladesh, Cambodia and Pakistan as demonstrators wrestle between fears of catching the contagion or the threat of starvation.

And while 17 companies have signed the International Labour Organization’s call to action to support garment manufacturers and workers as they navigate the pandemic’s fiscal stranglehold, the “humanitarian crisis unfolding, with workers being laid off and owed wages, means that brands must commit to a relief fund.”

“Ultimately, without binding industry standards to enforce fair purchasing practices there is no level playing field for responsible brands, and no protection for workers,” Narayanasamy said. “Instead callous companies can under-cut with impunity. This has left millions of women and migrant workers in fashion’s supply chains unable to put food on the table for their children, and wondering how they will pay the rent.”