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Buyer Beware: Wartime Ukraine Requires Responsible Sourcing

The last thing apparel companies sourcing from Ukraine should do is leave their suppliers in the lurch, a multistakeholder organization that works to improve conditions in the garment supply chain cautioned last week.

“Overall, the situation is dire, with local stakeholders reporting regular bombing and the overall upheaval of ‘normal’ lives,” the Fair Wear Foundation, whose members include brands such as Filippa K and Nudie Jeans, said following a stakeholder meeting about heightened due diligence during wartime.

With the military onslaught from Russia creating so much uncertainty, a stable business relationship could help Ukrainian manufacturers maintain a sense of continuity while alleviating their economic concerns, the organization said.

“Factories are still operating depending on the level of conflict in the region where they are located,” it added. “The wish for brands to remain in business with their Ukraine partners was explicitly expressed, as economic activity in Ukraine strengthens their position and will ease the transition once the conflict is over.”

Monitoring the bombardment’s impact on workers—in particular, worker turnover, job and wage loss and means for access to remedy—remains critical, the Fair Wear Foundation said, especially if the conflict spills over into neighboring countries such as Poland.

“As this situation may require ad-hoc sourcing decisions when the need to move production elsewhere arises, member brands are required to conduct human-rights due diligence when selecting alternative suppliers,” the organization said. “In this light, regular updates and conversations with your brand liaison are recommended.”

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Different forms of humanitarian support, including ensuring or promising job safety, were also discussed during the meeting. “Good examples” of this included suppliers who offered fleeing workers accommodation and employment at one of their other factories near the Ukrainian border. Some manufacturers were able to provide workers who had to stay home because of safety or caregiving issues with a basic wage, and those who braved the chaos with a bonus.

Holding jobs for workers who are conscripted into the territorial defense force is just as vital. Under martial law, Ukrainian men between the ages of 18 and 60 have mandatory military service. “When men get drafted for the war, it is important that their jobs and income are protected,” the Fair Wear Foundation said. “This is also required by law.”

Several brands and retailers have offered relief in the form of supplies or donations, but the best way to figure out what is required is to engage directly. “Some regions lack food, some electronics, some medicine,” the Fair Wear Foundation said. “Ask your business partners how you can help them, they know best.”

Another way buyers can help is by providing advanced payments to suppliers who are pre-paying their workers, which will strain their own financial liquidity. “By providing advance payments to your supplier in Ukraine this pressure may be relieved and the continuation of payment of wages is ensured,” the organization said.

Roughly 92,000 garment workers are employed in 6,000-plus factories in Ukraine, according to 2010 data from the Clean Clothes Campaign, which said that 90 percent of the industry operates “in the shadows” with poverty pay and lackluster conditions.

Lingerie maker Cosabella is one brand that has hit pause on orders since the Kremlin’s assault began, though it hopes to “com[e] back as soon as we can,” co-CEO and creative director Guido Campello previously told Sourcing Journal. Zara said its Ukrainian suppliers account for less than 1 percent of its sourcing base, though it did not elaborate on the status of its operations there when pressed. Adidas, which said at the outset of the war that it was taking a wait-and-see approach, likewise did not respond when asked if its three production lines in the country were still running.

The factories of Puma’s sole supplier in Ukraine, which produces goalkeeper gloves, are located in a region that is not an immediate conflict zone, a spokesperson told Sourcing Journal. They are currently working at a capacity of “about 50 percent.”

Hugo Boss told Sourcing Journal that production at its three partners in Ukraine, which make up less than 1 percent of its sourcing volume, is “mostly stopped,” though its overall business is unaffected. “Nevertheless, we are monitoring the situation very closely to take any measures, if needed,” a representative said. “Apart from business-related issues, the war fills us with great concern. The safety of the people and our partners is of top priority. Our thoughts are with all the people affected.”