Challenges due to Covid-19 normalised “exploitative purchasing practices” and cost hundreds of thousands of workers their jobs in certain sectors, a report has claimed.
Investigations by the Center for Business and Human Rights (CBHR) found purchasing teams at some companies during the pandemic had been pressuring suppliers for price reductions, delaying delivery, withholding payments and cancelling bookings.
It argued this was particularly prevalent in the garment sector, where they had created conditions that “spurred suppliers to shortchange and overwork their employees”. It added that more retailers and apparel brands need to "take responsiblity" for the impacts of their actions.
The Center for Business and Human Rights additionally found that some buying teams had taken advantage of suppliers, looking to use suppliers to offset their losses.
Natasja Sheriff, who co-authored the report and leads research on supply chains at the NYU Stern Center said: “We found that clothing retailers cut corners to avoid financial strain, while factory workers bore the brunt of the consequences.”
She added: “Workers are struggling to make rent, to clothe their children, and to put food on the table.”
One worker told the team: “EU and US customers are placing orders, but they try to find excuses for discounts, saying there is a problem with the order, even when goods are already in [the] store. This is happening very often. It was not as common before Covid.”
The Center for Business and Human Rights said retailers and apparel brands must “take responsibility” for the impact their purchasing practices had, and continue to have, on supply chain workers.
The report investigated the safety standards of factories in Bangladesh ahead of the 10 year anniversary of the Rana Plaza factory collapse in the country, in which 1,134 people died and 2,500 were injured.
It said while factory safety has “improved”, the purchasing practices of some global buyers remained “onerous”. It added: “In some ways these have grown worse in the wake of the pandemic.”
It claimed the practices have unintended consequences on supply chain workers – hundreds of thousands of which have been laid off. The report also noted that two-thirds of workers were unable to provide sufficient food to feed themselves and their families on a daily basis.
“The damaging practices that buyers employed during the pandemic did not end as the industry began to recover in 2021," it stated. "Instead, they continued in more subtle but nonetheless harmful ways. There is an urgent need for a third phase of global outsourcing – one characterised by genuine collaboration between buyers and suppliers.”
The CBHR has urged buyers to reform their purchasing approaches immediately.
It said: “Brands and retailers bear responsibility for the workers in their supply chain, just as they are responsible for assuring factory safety.”
The report investigated the safety standards of factories in Bangladesh ahead of the ten year anniversary of the Rana Plaza factory collapse in the country, which saw 1,134 people die and 2,500 injured.
It said while factory “safety has improved”, “the purchasing practices of global buyers have remained onerous and, in some ways, have grown worse in the wake of the pandemic,” which are “spurring suppliers to shortchange and overwork their employees”.