The research, carried out by the University of Aberdeen and trade justice charity Transform Trade, is said to be the largest to date with more than 1,000 Bangladeshi fashion factories taking part, with the majority said to be selling to the 24 biggest global retailers. they are paid at the same prices today as at the beginning of the pandemic, despite the increase in the price of raw materials.
‘The Impact of Unfair Practices by Global Apparel Traders on Bangladeshi Suppliers During the COVID-19 PandemicThe study found that a large number of street fashion brands reportedly bought from factories, between March 2020 and December 2021, which were facing rising raw material costs, with nearly one in five struggling to pay Bangladesh’s minimum wage of 2, £30. ($2.79) per day.
The survey suggests that the majority (90%) of major brands that buy from four or more factories have engaged in unfair purchasing practices, with more than half of suppliers reporting unfair purchasing practices such as cancellations, non-payments, late payments and discount claims with intermediaries effects, including forced overtime and harassment.
The study claims that larger brands engaged in unfair purchasing practices more often than smaller ones, with every brand buying from 15 or more factories allegedly engaging in at least one of these unfair purchasing practices.
Nearly two-thirds of the factories reported receiving some financial support from the Bangladeshi government or Bangladeshi banks to stay afloat, and of the brands listed in the report, 12 were described as members of the Ethical Trading Initiative, which aims to promote workers’ rights around the world.
Professor Islam, who is Professor of Sustainable Accounting and Transparency at the University of Aberdeen Business School and led the project, explained: “Two years after the start of the pandemic, Bangladeshi garment workers were not being paid enough to live on, with one in five producers struggling are paying the minimum wage, while many fashion brands that use Bangladeshi labor have increased their profits,” adding: “Rising inflation rates around the world have probably made this even worse.”
The survey also found that after the closure, garment factories employed 75% of the workers they had before, suggesting that up to 900,000 workers may have lost their jobs.
Why a fashion guard dog is considered a necessary solution
Fiona Gooch, senior policy adviser at Transform Trade, said: “This research is a wake-up call. When traders misbehave with suppliers by violating pre-agreed terms, it is the workers who suffer. If the merchant does not pay the agreed amount or is late, the supplier must cut costs in some other way, and this is often passed on to its workers who have the least power in the supply chain. Reports of re-employment with worse pay and conditions, bullying and unpaid overtime are a predictable result. We need a fashion watchdog to regulate clothing retailers in the UK, in the same way as the existing supermarket watchdog.”
Professor Islam exclusively told Just Style that a key recommendation from the study is for the UK and other Western governments to introduce a fashion watchdog.
He added: “At the same time, I stress that governments in the Global South should step up and introduce independent monitoring bodies (independent of government and industry associations), consisting of representatives of non-governmental organizations, trade union bodies and development agencies (such as the ILO) to monitor unfair practices (some of which are cross-border in nature).”
Professor Islam also believes the revelations are a wake-up call for consumers who should demand greater transparency and traceability of production locations, production processes, wages and labor rights, deliveries and final payments.
It is not the first time that Professor Islam has given a recommendation for a fashion watchdog. Following research published in January last year into the way female garment workers were treated during the pandemic, he told Just Style that retailers need to be held accountable for the way they treat suppliers and employees.
Brands cited in the study include well-known fashion brands and retailers such as Best Seller, H&M, C&A, Inditex-owned Zara, Mango, Next, Asda, Gap, Primark, Tesco, Target and LPP.
Most of the brands and retailers named in the report did not respond to Just Style’s request for comment before going to press, but Tesco told Just Style it was looking into the claims, with an Asda spokesman saying: “We have long-standing positive relationships with our suppliers in Bangladesh and in we are in regular contact to ensure that we continue to source our goods responsibly in accordance with our standards and policies.”
Primark has an official response published in the report and says Just Style Primark is not one of the retailers found to be paying below the cost of production nor has it been named as a retailer struggling to pay workers the minimum wage.
A Primark spokesperson explained: “As you will see from our response [in the report]one of the express terms and conditions of our work with our suppliers is payment assurance, something that our own team of auditors also independently monitors.”
The spokesperson also pointed out that Primark signed the Agreement and is one of the founders of ETI, and also wanted to repeat the fact that the data in the report refers to the years 2020 and 2021.
Meanwhile, Justyna Weryk, head of sustainable development at LPP, made it clear to Just Style that the data published in the survey is what she described as “far from the truth” and believes it “creates an unreliable image of our company”.
She said: “The pandemic is one of the most difficult times we have ever experienced in our history. It was a challenge not only for us, but the consequences of the economic changes it initiated were also very keenly felt by our suppliers and other companies based in developing countries, such as Bangladesh. That is why, after the outbreak of the pandemic, we started an action to support suppliers.
“We settled our obligations to the factories on time. Since we found ourselves in a difficult situation due to the outbreak of the pandemic in Poland and the quarantine that followed, we were forced to limit some of our orders. We have considered each supplier’s situation on a case-by-case basis to help manufacturers maintain accounting liquidity. In the spring, when the restrictions hit the economy hard, we were in constant contact with suppliers and looked for solutions together. We also monitored the payment of wages to factory workers.”
She added that as of April 2020, 99% of Bangladeshi garment factories cooperating with LPP had paid their salaries for March and settled their obligations in the coming months when production was on hold, noting, “LPP was one of the first garment companies which was included in the Workers’ Rights Consortium (WRC) list of companies that honor their obligations to suppliers.”
The report claims that the garment industry accounts for 85% of Bangladesh’s export earnings, with more than 12 million Bangladeshis depending on the sector.
Just Style had not received a response from the Bangladesh Garment Exporters Association (BGMEA) before going to press.