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Brands Guilty of ‘Straight-Out Robbery’ as Covid-Hit Garment Workers Risk ‘Unbearable’ Debt: Report

Shrinking incomes and deteriorating workplace conditions, exacerbated by exploitative buying practices by brands and retailers amid the Covid-19 pandemic, have made garment workers more vulnerable to indicators of forced labor than ever, new research published Monday has found.

The University of Sheffield and the Worker Rights Consortium, which analyzed data from workers from more than 300 factories across Ethiopia, Honduras, India and Myanmar, found that workers in all four countries experienced “sharp declines” in their quality of life from wage theft, verbal and physical abuse, sexual harassment and the curtailment of their right to organize and bargain collectively.

Although specific patterns varied by country and individual-level factors such as age, gender, union affiliation and migration status, the downward trend remained the same whether workers stayed in the same jobs they had pre-pandemic or if they had been laid off and forced to find new employment.

Indeed, of the 1,140 workers researchers surveyed, 72 percent retained their jobs at the same factory during the pandemic, throwing into greater relief the shift in climate. More than one-third (35 percent) of workers who stayed employed reported verbal abuse, threats or intimidation, while 22 percent cited unfair wage deductions and withholdings and 19 percent said access to necessities such as water and bathrooms were restricted. Nearly 40 percent claimed a lack of personal protective equipment like health-protecting face masks, as well as lax, if any, enforcement of social-distancing protocols.

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Workers, on average, saw their monthly incomes stumble 11 percent from a pre-pandemic $627.45 to a post-pandemic $560.36.

Those who had their pre-pandemic contracts terminated fared poorly as well, with nearly 80 percent reporting that they didn’t receive their severance pay in full and two-thirds saying they were given nothing at all. Workers who changed jobs as the coronavirus was raging said their new employment left them worse off with lower pay, less job security and more risks to their health and safety. In addition, 68 percent of workers who found new jobs had no written or oral contract. Those who did receive a contract from their new employers said the terms were weaker than those of their previous one.

To meet basic needs, many have taken on “skyrocketing” levels of debt. A garment worker from Ethiopia, who was unable to pay back the money he borrowed, said he risked violence from money lenders as a result. “I have decided to leave the industry because the debt has become unbearable,” he said. “If I stay here, the debt is going to kill me.”

“Growing indebtedness among garment workers in our study is a result of chronically low wages in brands’ supply chains, compounded by brands’ pandemic response,” Genevieve LeBaron, professor of politics at the University of Sheffield and the primary author of this report, said in a statement. “This is an alarming trend given the well-documented links between debt and vulnerability to forced labor.”

‘Enduring impact’

Brands and retailers have done little to intervene, choosing instead to prioritize shareholder returns and their own bottom lines by shifting the financial burden onto the suppliers and workers “who could least afford it,” the report noted. One industry expert quoted in the report described the corporate response to the pandemic—anemic in its support at best, destructive and predatory in its activation of force majeure clauses to duck payments at worst—as “a straight-out robbery, a money grab.” Only a “small handful” of brands have behaved responsibly. Overall, the public and private sectors have failed to enforce labor standards in the garment supply chain, leaving workers less protected and enabling employers to roll back conditions with “virtual impunity.”

“The response of many apparel brands at the outset of the pandemic, which included the retroactive cancellation of in-process apparel orders, pushed the economic pain of the pandemic down the supply chain, onto the backs of workers,” said Penelope Kyritsis, director of strategic research at the Worker Rights Consortium and a co-author of the report. “Our research exposes the enduring impact of brands’ irresponsible behavior.”

Covid-19 Raised Garment Worker Vulnerability to
An Indian man works at a textile factory in India. AP Photo/Ajit Solanki

In other words, the study said, the pandemic has not only damaged conditions in the immediate term but it is also “accelerating and amplifying” prior supply-chain inequities, such as the supplier-buyer power imbalance and the exclusion of worker voices within supply-chain governance. These knock-on effects can be seen in countries like Lesotho, where weeks of protests over the delay of promised wage increases recently turned deadly and authorities ultimately agreed to an effective wage increase of 14 percent rather than the 20 percent workers say they need for basic subsistence. Similar demonstrations have been occurring in Cambodia, Bangladesh, Pakistan, India and Sri Lanka, where workers are demanding the payment of arrears and owed benefits.

“It makes clear the dire need for brands to sign a binding agreement—as urged by over 220 civil society organizations—to respect workers’ basic rights, ensure payment of full regular wages throughout the pandemic and create a severance guarantee fund,” Kyritsis added.

Access to remedy

Other efforts are percolating. On Monday, the Fair Wear Foundation and the German Partnership for Sustainable Textiles announced that they are working together to improve access to remedy for workers in garment factories employed by their member brands in India and Vietnam.

It’s the first time that Fair Wear is making its complaints system accessible to brands signed up with other organizations, meaning that Esprit, G-Star Raw, Hema, S.Oliver and Seidensticker will be able to access the platform alongside the organization’s 130 brands, which include Mammut, Nudie Jeans and Kings of Indigo.

The mechanism provides workers with the ability to “easily and safely” voice concerns such as excessive working hours and problems with payments while ensuring action is taken to remediate them. Flagging such problems can also identify opportunities for larger, more systemic change.

“Joining forces is an important step towards providing more workers with better access to remedy and facilitate cooperation among brands,” Margreet Vrieling, the organization’s associate director, said in a statement. “This is especially relevant now that Covid-19 has made it so difficult for brands to visit factories. Complaints can now serve as an even more important source of information about what’s happening at the workplace.’

S.Oliver was one of the subjects of a complaint filed with the Fair Labor Association (FLA) in 2019 that claimed that it and Uniqlo owner Fast Retailing failed to pay workers in Indonesia $5.5 million in outstanding severance payments after two factory suppliers suddenly shuttered.

The Clean Clothes Campaign, which made the complaint on behalf of workers of the Jaba Garmindo factory group, accused Fast Retailing and S.Oliver of violating the FLA’s “principles of fair labor and responsible sourcing,” which the labor-monitoring group drafted to ensure the “respectful and ethical treatment of workers” while promoting “sustainable conditions” in the garment industry. The matter is still unresolved.

When asked about whether there was a cognitive dissonance between its adoption of the complaints mechanism and its lack of redress in Indonesia, a spokesperson for S.Oliver said the company takes the responsibility for its business partners and supply chain “very seriously.”

“We are committed to safeguarding and promoting human right standards in our sourcing countries and factories,” the spokesperson added. “Therefore, we were fully cooperative towards FLA’s investigation. When the full FLA report is released, we will be able to restudy the whole case from an impartial manner.

In the Fair Wear announcement, S.Oliver had said that it would like to “further develop” its existing approach to complaints and remedial action in its supply chain.”

“This cooperation gives us the opportunity to address this issue more efficiently and, most importantly, together with various actors such as the Fair Wear Foundation,” it said. “In this way, we can avoid a multitude of different channels and facilitate access for workers throughout the industry.”

Editor’s note: This story was updated on June 28, 2021 with a response from S.Oliver.