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How Walmart Garment Supplier Got Itself Off Imports Blacklist

Roughly six weeks after it first slapped a Withhold Release Order (WRO) on shipments from Natchi Apparel, U.S. Customs and Border Protection said it modified the order to grant entry to all of the Tamil Nadu garment maker’s imports otherwise in compliance with the law. Shipments previously detained on suspicion of forced labor will also be discharged, officials said Wednesday.

“Every day, our department leads the fight to root out forced labor from American supply chains,” said Alejandro N. Mayorkas, secretary of Homeland Security. “Combatting these inhumane practices is a moral and economic imperative, and a challenge we must confront with a whole-of-society approach. This modification not only reflects the critical role of CBP, but it is also a testament to the important advancements made by trade unions, worker rights organizations and workers themselves who are bravely organizing to improve their working conditions.”

Natchi Apparel is a subsidiary of Eastman Exports, India’s fourth-largest garment export company. The former H&M supplier made headlines last January after one of its employees, a 20-year-old named Jeyasre Kathiravel, was raped and murdered by her supervisor. More than a year later, H&M Group and Eastman Exports signed a landmark agreement with the Tamil Nadu Textile and Common Labour Union, the Asia Floor Wage Alliance and the Global Labor Justice–International Labor Rights Forum (GLJ-ILRF) to tackle gender-based violence and harassment at the factory.

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The Swedish retailer told Sourcing Journal at the time that it stopped placing orders with all of Eastman’s units, including Natchi, sometime earlier “in line with our normal due diligence routines,” but that it remains committed to “being part of a solution” for improving worker conditions.

What differentiates the Dindigul Agreement to Eliminate Gender-Based Violence and Harassment is its comprehensive accountability and legally enforceable nature, stakeholders say. The program, they add, includes union-led training, an independent grievance mechanism and “real remedies” for abuses that place women in leadership roles.

Levi Strauss, The Children’s Place and Wrangler owner Kontoor Brands inked a similar deal with Nien Hsing Textile Co. and several human and women’s rights organizations in Lesotho in 2019 after a Worker Rights Consortium investigation uncovered widespread sexual abuse and harassment at three denim factories in the southern African country. Beyond that, such binding contracts are nonexistent despite evidence that violence against women has spiked in the aftermath of the pandemic.

CBP said it’s lifting the WRO it originally announced on July 29 after Natchi, Eastman Exports and an unnamed non-governmental organization—later confirmed to be GLJ-ILRF—provided evidence that the factory had addressed all five of the International Labour Organization’s (ILO) indicators of forced labor identified by the WRO, though it didn’t specify what these were. The ILO lists 11 indicators in all, including abuse of vulnerability, physical and sexual violence, withholding wages, excessive overtime and debt bondage.

“Forced labor directly threatens America’s economic security, and therefore national security,” said CBP commissioner Chris Magnus. “This modification recognizes that workers at Natchi Apparel are now treated with the dignity and humanity they, and workers around the world, deserve, which means greater security for American businesses and consumers.”

Labor campaigners say that the fact the program was able to deliver results that were enough to sway the CBP is proof that it works. Eastman Exports CEO Subhash Tiwari, for one, said he’s grateful that customs officials recognized the manufacturer’s efforts.

“We are very proud of the leadership role that Eastman Exports has taken, in partnership with civil society and worker rights organizations, to promote the rights of our workers—particularly our ground-breaking programs on gender-based violence and harassment,” he told Sourcing Journal.

GLJ-ILRF said Wednesday that it had delivered the evidence on behalf of all stakeholders of the Dindigul agreement, which it said brands must adopt if they are “serious” about cleaning up their supply chains. The workers’ rights group added that the WRO modification shows that the U.S. government acknowledges that freedom of association, collective bargaining and representation by an independent union that enables workers to “exercise collective agency to drive meaningful changes” at their workplace is “crucial” in the fight against forced labor.

“While U.S. trade policy must provide penalties for global suppliers and brands that don’t respect workers’ rights, forced labor enforcement shouldn’t undermine collective bargaining and other fundamental rights,” said Allison Gill, forced labor program director at GLJ-ILRF. “The Biden administration has made clear that it is aligning its trade policy with its labor policy to support workers’ rights to organize not just in the U.S. but around the world and especially in global supply chains,”

The organizations behind the Dindigul agreement are now urging other brands that have sourced from Natchi for the past two years, including Brooks Brothers owner Authentic Brands Group, Marks & Spencer, Ralph Lauren and Walmart, to add their support.

“Global supply chains too often create economic pressure that leads to exploitative working conditions up to and including gender-based violence and harassment and forced labor,” said Sahiba Gill, senior staff attorney at GLJ-ILRF. “The Dindigul enforceable brand agreements, which include enforceable commitments from suppliers, buyers and labor stakeholders across the supply chain, offer a concrete model for bringing about meaningful change for workers through roles for unions, suppliers, brands and global labor allies.”

AnnMarie R. Highsmith, executive assistant commissioner for the CBP Office of Trade, noted that the WRO modification should serve as an example to any company wishing to do business with the United States.

“Our efforts reinforce the dynamic work of non-governmental organizations on the ground to protect workers suffering under conditions of forced labor and of importers to source products ethically from suppliers who treat workers fairly and with dignity,” she said. “Together, these provide a strong incentive to remediate forced labor conditions.”