Decisions to cancel or cut orders resulted in 'wage theft' © Denise Tsang/South China Morning Post via Getty Images
Decisions to cancel or cut orders resulted in 'wage theft' © Denise Tsang/South China Morning Post via Getty Images

Retailers drive supply chain workers 'into desperation'

6 July 2021

High street retailers have driven workers in their supply chains “into desperation” during the pandemic, it has been claimed.

A report by Clean Clothes Campaign alleged H&M, Nike and Primark had not done enough to protect factory workers in their supply chains in Bangladesh, Cambodia and Indonesia.

More than half of the garment workers in these countries interviewed for the report said they had experienced wage cuts during the pandemic.

Almost 70% said there had been periods when they were not paid their normal, pre-pandemic wage, and this was making it even harder for them to make ends meet.

Business decisions to cancel or cut orders and push down prices had effectively resulted in “wage theft” as workers were still owed pay, the report alleged.

The report estimated globally garment workers were owed billions in unpaid wages, bonuses, and severance pay since the pandemic began. It said although many major brands had since agreed to pay in full for orders already in production, they had not committed to ensuring workers in the supply chain received regular wages throughout the pandemic.

It said: “Mass cancellations, delayed payments, and discounts imposed on suppliers sent financial shock waves through the industry and had devastating impacts on garment workers.”

Clean Clothes Campaign said it chose to research three brands that made considerable profits over the last year appeared often on its liveblog, which keeps track of reported violations in garment factories and garment producing countries.

Meanwhile, a study by Sheffield University said the pandemic had increased the risk of forced labour in the clothing industry, and highlighted deteriorating living and working conditions for workers in the garment supply chain.

It said this had been exacerbated by the response of retail companies, with little evidence that most have acted in line with their social responsibilities to support supply chain workers, despite many accessing pandemic recovery funds, the research claimed.

The study covered Ethiopia, Honduras, India, and Myanmar and found workers reported a sharp decline in earnings and working conditions during the pandemic and were at increased risk of forced labour. The report called for the pandemic recovery to include support for supply chain workers to mitigate the impact on them.

In March UK MPs said they were “appalled” that companies “still cannot guarantee their supply chains are free from forced labour”. The House of Commons Business, Energy and Industrial Strategy Committee said the Modern Slavery Act “has no teeth” and its transparency obligations must be strengthened with “tough fines” for non-compliance.

Primark said it was investigating the factories mentioned in the report.

“We know how devastating Covid-19 has been for the global garment industry,” said a spokesperson. “We have continued to work closely with our suppliers throughout this time to ensure our code of conduct, which sets an internationally recognised mandatory standard for every factory making products for our suppliers, has continued to be upheld.”

A Nike spokesperson said: “Through our ongoing due diligence programmes, it is our understanding that the suppliers mentioned in the report have followed local legal requirements as they relate to wages and compensation.”

An H&M spokesperson said: “Our data and assessments do not indicate that workers have not been compensated in line with relevant laws and, where applicable, collective agreements.”

 Want to stay up to date with the news? Sign up to our daily bulletin.

LATEST
JOBS
Homeworking
£75,000 - £90,000 + fantastic bonus package
Evolve Commercial Ltd
United Kingdom
£55,000 - £65,000 + fantastic bonus package
Evolve Commercial Ltd
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE