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Could a ‘Fashion Czar’ or ‘Garment Trade Adjudicator’ Clean Up the Sector?

First came calls for a U.S. “fashion czar.” Now a group of Members of Parliament is urging the U.K. government to appoint a “garment trade adjudicator” to “stamp out non-compliance” with labor market regulation in the British garment industry.

In a letter to Secretary of State Kwasi Kwarteng last week, Philip Dunne, chair of the Environmental Audit Committee of the House of Commons—the same cross-political party group that led an eight-month inquiry into the social and environmental effects of fast fashion in 2018—said that a garment trade adjudicator, much like the existing groceries code adjudicator, could “stop the abusive purchasing practices of retailers, and other intermediaries, which directly shape working conditions of workers in their suppliers’ factories.”

While there is “some merit” to the “fit to trade” licensing scheme proposed by the British Retail Council in the wake of Boohoo’s Leicester-factory scandal last summer, Dunne said, it appears to place all legal responsibility—and the cost of compliance—on the shoulders of suppliers, even though pressure from exploitative brand buying practices is the major driver behind illegal practices such as poverty wages, excessive overtime and unsafe working conditions.

“Because of this power imbalance in relation to suppliers, retailers’ purchasing practices will never conform to norms of fair commercial practices unless there is regulatory intervention,” he said, adding that the adjudicator model of regulation has proven to be not only successful in the groceries sector but also economical, since it costs 2 million pounds ($2.8 million) a year to oversee retailers with a turnover of more than 13 billion pounds ($18.1 billion).

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Matthew Taylor, director of labor market enforcement, told the committee last year that while both proposals had value, he favored the idea of an adjudicator as “certainly worth exploring.” A licensing scheme in the garment sector, he said, carries significant challenges, the foremost of which is scale.

“The Gangmasters Licensing and Abuse Authority is hard-pressed to license and inspect the relatively small numbers of labor providers in the agriculture sector; you would be talking here about having to license a vastly larger number of businesses,” he said. “My view is that there is no point in having a licensing scheme unless you have the resources to enforce such a licensing scheme. We certainly do not have those now and I don’t see much sign of the government intending to put more resources into compliance and enforcement right now.”

Another impediment, Taylor noted, is the apparel supply chain’s relative lack of visibility compared with other industries. “I think the obvious danger of any licensing scheme, which is that it drives people underground, is a bigger danger in this sector,” he said. “A lot of these businesses are taking place in rooms, warehouses or, as you say, in people’s front rooms. It is not hard to hide these businesses.”

Taylor suggested a different route: a “compliance plus” Kitemark or product certification scheme—to which brands can commit and suppliers can sign up—that provides a “market advantage for businesses who are playing by the rules.”

What is clear, Dunne wrote in the letter, is that voluntary corporate social responsibility initiatives have failed to make a significant dent in improving pay and working conditions in the upstream fashion supply chain. High-street brands, too, are being consolidated under a small number of digital pure-play operations, allowing them to concentrate “considerable buying power over garment suppliers, similar to the power of supermarkets.”

“We consider that mandatory regulation and greater enforcement efforts are now necessary,” he said. “We, therefore, recommend that the government evaluate the garment trade adjudicator model, and consult on how this could, in conjunction with other measures, operate to ensure greater compliance.”

A similar sentiment is building across the pond as well. In February, a group of journalists, academics, nonprofits and brands, including Allbirds, Mara Hoffman and Reformation, signed a letter imploring President Biden to tap a “high-level advisor” to “coordinate the policies and people of the fashion industry.”

“U.S. presidents have relied on czars…to coordinate U.S. policy in a variety of industries and crises for the past 100 years, including WWI preparedness, auto manufacturing, energy, drugs and Y2K, just to name a few,” the letter said. “A czar should be empowered to bring together key industry participants, advocate for policy changes and have a senior role within the administration. The creation of a fashion czar would signal your administration’s commitment to humane labor and environmentally sound practices as well as a recognition of the role of fashion as a driver of the U.S. economy.”

As legislations for mandatory supply-chain due diligence coalesce in Germany and the European Union, a cadre of nearly a hundred brands and organizations in New Zealand, including Coca-Cola, PriceWaterhouseCoopers, The Warehouse Group and World Vision, are asking lawmakers for a Modern Slavery Act for the country’s business and public-sector supply chains. The level of modern slavery within New Zealand, they noted in a letter delivered to Workplace Relations and Safety Minister Michael Wood Tuesday, is currently unknown.

“Numerous governments around the world have already introduced legislative changes to address modern slavery. However, these countries cannot solve modern slavery on their own,” the letter said. “Like-minded countries such as New Zealand—countries that prioritize ethics and sustainability—must similarly show leadership and act to end modern slavery.”

“Modern slavery goes against our Kiwi values,” it added. “New Zealand’s identity as a nation is built on kindness, fairness, equality, and sustainability. As New Zealand continues to trade on these credentials, showing leadership on addressing modern slavery through ensuring its companies and public sector are meeting global labor rights standards, becomes more important.”