The pandemic and garment workers

When events were forbidden and no one went to work any longer, the demand for clothing was bound to go down quickly. The fashion industry has a strong tendency to abuse those working at the bottom and was quick to push those effects down the production chain.

Factory workers have been in the weakest positions in the industry, and the effects that the pandemic had were no different. Large fashion retailers began canceling and postponing their orders and refused to pay for ones already made.

Workers further down the supply chain faced massive layoffs and suspensions. Most of them were women. Since garment workers often live in areas with no social security and their wages are significantly below livable, workers in the fashion industry’s supply chains don’t tend to have any financial security or be able to gather savings. Pay is usually not enough to even cover daily living costs. The start of the pandemic put masses of garment workers in imminent danger of extreme poverty, endangering their basic rights even more than usual.

The Clean Clothes Campaign conducted a report on how the pandemic affected the fashion industry in 2020. The first waves were set in motion already in January 2020, when China was not able to supply raw materials to other manufacturing countries. This led to factories being closed temporarily. When the virus began spreading to the European countries and the USA, the drop in customer demand led brands to suspend and cancel orders which again led to factory workers getting sent home and going unpaid. The virus then spread to countries where factories are located, causing increasing damage. Millions of workers got suspended.

In areas where some sort of social security system exists, garment workers are often employed unofficially, and they can fail to meet the requirements to be eligible to receive social security.

The reactions of fashion companies

The reactions of fashion companies, to the pandemic and the public pressure to pay for their orders, have been variable. Marks & Spencer responded to the epidemic by canceling orders of 100 million pounds worth, but after pressure from labor rights groups, agreed to pay and receive the orders they had made.

Asos paused deliveries from suppliers. Since Asos only pays for its suppliers upon delivery, it effectively pushed the damage further down the supply chain. Staff in the Asos distribution center had also expressed concerns about safety and had claimed that protective measures against the spread of coronavirus were not sufficient. 98% of workers who were interviewed found that the working environment was not safe. Asos later committed to paying the orders they had made.

Arcadia, which owns groups like Topshop, Miss Selfridge, and Dorothy Perkins, canceled around 100 million pounds worth of product orders, some of which had already been made but not in delivery. They also demanded a 30 percent price reduction from orders they had placed earlier and were already in transit. There had also been talks that Arcade had furloughed at least most of its CSR department, which could mean that other departments would make decisions requiring consideration of social impacts in their supply chains.

Boohoo’s Leicester factories were under investigation for their coronavirus response. A report on the issue was released in June 2020, and it found that working conditions in Leicester were putting workers in danger of infections and fatalities.

Taking responsibility

The Asian Floor Wage Alliance (AFWA) released a demand in April 2020, where brands were petitioned to take responsibility for the situation. In this plea, it was stated that:

These workers, who in the best of circumstances, survive under high-risk, poverty-level working and living conditions are least equipped to bear the brunt of this enormous disaster. It is a moral imperative to respond to the humanitarian crisis faced by these garment workers, who produce for the lucrative global fashion industry year-round, but themselves live in poverty.

AFWA was working with garment production countries and found situations where workers were going hungry, facing homelessness, and were unable to get healthcare. Migrant workers lacked support systems.

Brands were urged to take responsibility, and AFWA recommended that brands engage in one-time supply chain relief contributions for each of the workers in their supplier factories, which would be an additional 2% of the total sourcing costs during the past 12 months of that factory. This would have been just a first response, and brands should still be committed to their long-term supplier relationships and pay their bills and withhold from canceling their existing orders.

A couple of months later, in June, The Clean Clothes Campaign, Global Labor Justice, International Labor Rights Forum, and Worker Rights Consortium issued their Model Arbitration Clauses for the Resolution of Disputes under Enforceable Brand Agreements. This suggested arbitration system was quickly created to respond to the needs that the coronavirus epidemic had created. It was meant to create a fast and inexpensive way to settle disputes in a neutral manner. The arbitration clauses were designed to be incorporated into agreements between companies and their suppliers. The instrument was supposed to create a system more enforceable than voluntary schemes like corporate codes of conduct and other unilateral mechanisms based on goodwill.

The result?

There has not been much follow-up on the arbitration clauses. The fashion industry relies heavily on exploiting those who are the lowest on the food chain. When facing a force majeure, it is the ones already most vulnerable who get to feel the hardship. There are practical difficulties in the way of making these production chains more responsible, but the lack of interest and empathy, and plain old greed, are also big factors in why things are the way they are.