The coronavirus pandemic is not just a planet-spanning health catastrophe, labor advocates say. It’s also a human rights crisis in the making.
On Tuesday, the nonprofit Fair Wear Foundation, rolled out a “COVID-19 dossier” on its website to help garment industry stakeholders navigate what has rapidly devolved into a worst-case scenario with incessant spates of canceled orders and shuttered factories.
“The lives of millions of garment workers are at stake,” Fair Wear director Alexander Kohnstamm said in a statement. “It’s crucial that during this crisis all players in the garment industry show what responsible business looks like.”
The Amsterdam-based organization, whose 140-plus members include labels such as Mammut, Nudie Jeans, Kings of Indigo and Vaude, urges brands not to cancel orders that are poised to be shipped, to anticipate changes or delays in production and to be flexible about delivery dates.
Already millions of garment workers in the producing hubs of Cambodia, Bangladesh, India, Myanmar and Vietnam have been laid off or furloughed—often without legally mandated pay or severance—as a result of stalled or reneged orders from retailers grappling with plummeting sales and dormant storefronts amid social-distancing measures, according to a recent report from the Center for Global Workers’ Rights (CGWR) at Penn State University.
The issue is thrown into stark relief in Bangladesh, the world’s second-largest exporter of clothing after China. Since the coronavirus pandemic broke out, more than half of Bangladesh suppliers have had the majority their in-process or already completed production canceled—despite the fact that buyers were contractually obligated to pay for those orders.
When orders were canceled, 72.1 percent of buyers refused to pay for raw materials such as fabric that suppliers had already purchased, and 91.3 percent of buyers refused to cover cut-make-trim costs. Western retailers, in particular, have been using force majeure clauses in their contracts to extricate themselves from any liability.
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Primark has to date cancelled or delayed by far the most orders ($273 million), followed by C&A ($166 million) and Mothercare ($62 million). While retailers such as H&M, Marks and Spencer and Zara owner Inditex have agreed to honor their commitments, they may not be enough.
“As a result of order cancellations and lack of payment, 58 percent of factories surveyed report having to shutdown most or all of their operations,” CGWR director Mark Anner wrote in the report.
The Bangladesh Garment Manufacturers and Exporters Association and the Bangladesh Knitwear Manufacturers and Exporters Association estimate that the South Asian country is on track to lose roughly $6 billion in export revenue this financial year.
While Fair Wear says it recognizes that brands are facing an “extremely difficult time,” it also encourages its member brands to uphold their obligations toward the workers in their supply chains. It also calls on governments to intervene where appropriate.
“It is clear that the scale and scope of this outbreak reach beyond the power of individual brands and retailers,” Kohnstamm said. “Governments of garment-producing countries need to provide social security for workers. Crucially, economic support measures taken by European governments should also take into account the millions of people that are making our clothes.”
Without workers, for instance, there would be no factories and no clothes for brands to sell. There may even be opportunity, in this crisis, to create a more equitable industry, he added.
‘This crisis exposes how vulnerable workers are in this fragmented, global value chain. And it also shows how interdependent we are: when business picks up again, many of the factories that brands rely on may well be out of business,” Kohnstamm said. “So, there is a human as well as a business imperative for the industry to embrace a new normal, in which fair prices and living wages are the norm.”