Vogue, 3 August 2020

Below is an article published by Vogue, Photo  Liu Xin/China News Service via Getty Images

Allegations of labour exploitation in the fashion supply chain are rampant. In the month of July alone, UK fast fashion retailer Boohoo was accused of worker exploitation at one of its Leicester suppliers (the company refutes the allegations); advocacy groups alleged that Los Angeles’ garment district put workers at risk of Covid-19 contagion; and a new report linked Malaysian factories to alleged forced labour.

For Raphaël Glucksmann, vice-chair of the Subcommittee on Human Rights of the European Parliament (or DROI Committee), the only solution is to hold companies legally responsible for any form of violation of human rights in their value chain, including violations perpetrated by their suppliers, subsidiaries and subsidiary contractors.

“[Brands] will take all the progressive stances in the world as long as it does not impact their business model, but the problem is their business model,” he says. “The only way to convince them is to show that if they don’t change [it], they might face justice.”

Western fashion companies have long relied on outsourcing their production to countries that often have poor labour conditions and rule of law. But as consumer awareness builds and governments like the European Union take a stronger stance, fashion faces a costly re-evaluation of its business model and entire supply and value chain. Eighty-two well-known international brands, including Adidas, Lacoste, Nike and Zara, were linked, direct and indirectly, to Chinese factories that allegedly used forced labour earlier this year. The Australian Strategic Policy Institute report alleged 80,000 Uighurs had been deported to work in factories in the last two years “under conditions that strongly suggest forced labour”.

Vogue Business reached out to the fashion companies named in the report. Of the brands that responded to a request for comment, Gap, H&M and Uniqlo denied sourcing garments from or working with manufacturers in Xinjiang. Nike said it does not source products or components directly from Xinjiang and doesn’t use textiles or spun yarn from the region. Cerruti 1881 said it has never used the Uighur minority forced labour directly or indirectly. L Brands said it cut ties with one supplier with ties to Xinjiang earlier this year. PVH said that since January 2019 the company and its licensees are prohibited from producing finished goods in the region. Jack & Jones is increasing focus on due diligence procedures in tier 3 and 4 production in the province. Lacoste said specialist auditing firms found no non-compliance among its suppliers in China. Puma said that only one of the two manufacturers associated with the company by the report works, indirectly, for Puma and there is no evidence of any form of forced labour in its factory. Zegna said none of the companies named in the report is a supplier to Zegna, but that one of the companies purchases fabrics from them.

Abercrombie & Fitch, Adidas, Fila, Li-Ning, Ralph Lauren, Skechers and Zara didn’t reply to a request for comment at the time of publication.

Glucksmann is working on a EU legislative initiative that would make human rights and environmental due diligence mandatory for companies through their entire supply chain, based on a duty of care, which is a legal obligation to adhere to a standard of reasonable care. In effect, a European parent company will be legally liable for failure of due diligence not only in its owned operations, but on all levels of the supply chain beyond first-tier suppliers and no matter where they are in the world. While details are still scarce, the legislation could also require the burden of proof in reverse (which means that the defendant will have to prove its innocence as opposed to the prosecutor having to prove their culpability) and address all human rights, not only severe violations. American companies that don’t comply will be taxed.

“The decision to go with something mandatory is groundbreaking,” says James Marlow, a lawyer on Linklaters’ ESG team, adding that previous initiatives tended to be on a voluntary basis as agreement on a mandatory position couldn’t be reached. “[Due diligence] is not just finding and getting the information; it’s finding the information, finding the issues and then doing something about it.” With the additional “standard of reasonable care” it won’t be enough for companies to prove that they did due diligence, but they’ll have to do it in a way that “a reasonable business would have done”.

In short, the law could allow affected communities and individuals employed by lower-tier suppliers in any legislation to bring their case against the top-tier European parent company to a European court, instead of bringing the local supplier to court in a local court. A German company that works with suppliers employing workers under conditions of forced labour, then, could be taken to trial in Germany.

The Uighur issue

Glucksmann was aware of the numerous reports around the mass detention and forced labour practices suffered by Muslim ethnic minorites, specifically Uighurs, in the Northwestern Chinese region of Xinjiang. But he wasn’t aware of the full extent of the issue until he had hearings with members of the Uighur diaspora in Europe in September 2019. “The deeper I went into [it], the more horrible the story looked,” he says. In the years since the Chinese government escalated crackdowns against Muslim ethnic minorities in 2009 and again in 2014, leaked government documents, satellite images and former Uighur detainees and activists have confirmed the existence of heavily surveilled internment camps and allegations of forced sterilisation and abortions have been reported. The Chinese government denies wrongdoing.

For Glucksmann, who initiated a social media campaign to raise awareness of the issue in September 2019, the alleged involvement of fashion companies was an opportunity to further his efforts. “Public campaigns work better with fashion brands because 90 per cent of their business strategy is based on their image,” he explains, adding that brands that have been increasingly shaping their image as philanthropic and progressive would have a hard time ignoring allegations of involvement in forced labour, even if they are aimed at their suppliers.

For now, answers to his campaign have been varied. Since the release of the report, Glucksmann’s campaign has targeted Adidas, Lacoste, Nike and Zara, asking for meetings with executives and public responses regarding their alleged involvement with the factories named in the ASPI report. According to Glucksmann, Adidas and Lacoste both agreed to cease all activity with suppliers and subcontractors involved in the exploitation of Uighur forced labourers. Nike refused to share evidence that Taekwang, the supplier to which it was linked in the report, stopped recruiting new employees from Xinjiang and also refused to share its written exchanges with the supplier. Zara just recently accepted to meet with Glucksmann. (Adidas didn’t reply to a request for comment; Nike and Lacoste didn’t address a specific question about their exchange with Glucksmann; Zara declined to comment on a request to confirm its meeting with Glucksmann).

Similarly to Gen Z consumers’ mild response to the allegations of malpractice against Boohoo, the allegations of Uighur forced labour haven’t driven the outspoken consumer reactions and call-outs triggered by brands’ responses to the Black Lives Matter protests around the world or for their response to other political, social and environmental issues. Glucksmann, however, believes the association between forced labour and one’s favourite brand will lead an increasing number of customers to ask for a good track record in terms of environmental and human rights.

“Xinjiang and Western China look so far from our lives,” he says. “Our job is to show that what you are wearing is connected to the worst crime against humanity of today.” He said that in September the focus will move to H&M.

Implications for businesses

Adhering to the EU mandatory due diligence legislation, if passed, will be a difficult undertaking for brands, especially small and medium-sized businesses with complex supply chains and limited resources. But it’s not impossible, says Linklaters’ Marlow, who stresses that the effort is going to require engagement across the entire business. “It’s something that requires multidisciplinary attention, senior level attention and a cultural shift across organisations in the industry,” he says, adding that mandatory laws could encourage collaboration, leading to more progress.

Some companies see a standardisation of norms in a positive light. In a statement, H&M said that they “welcome and publicly support the development of a law regulating how companies should carry out human rights due diligence, and believe that going from a voluntary to a mandatory framework would lead to a greater accountability… We therefore actively support initiatives within the EU to ensure that the development of such a law is prioritised.” Cerruti 1881 said that, while it’s company policy to never comment on politics, “it is obvious that strength lies in numbers, and human rights and style of law should be backed by texts internationally enforceable.” Every other brand did not respond to requests for comment or did not provide a specific comment on the legislation.

Glucksmann says that the legislation, which should be voted in plenary in December barring a second wave of restrictions due to Covid-19, seems to have a “surprisingly” majority consensus for the moment. This is partly motivated by a frustration from some political parties with what they perceived as an economic overdependence on China, which became apparent when Covid-19 brought global supply chains to a standstill, bringing the discourse around the localisation of production to the forefront.

But simply walking away from the supply chain doesn’t eradicate the underlying human rights and labour rights abuses that are part of the globalised fashion system and the legislation shouldn’t bring companies to pull away from supplier countries en masse. “What we want to do is not to close borders and be protectionist… it’s to standardise norms [to make it that] with your search for lower costs will come a necessity of responsibility,” says Glucksmann.