Source, produce and trade ethically – embracing social compliance in your supply chain

Whether you are selling clothes, shoes or handbags, from the picking of raw materials to the manufacturing, packaging and delivery of your goods, modern slavery can exist at all stages of the supply chain.

In fact, according to the International Labour Organization, at least 40.3 million people worldwide are thought to be trapped in modern slavery, with 24.9 million people believed to be trapped in forced labour. It is estimated that, although 2021 data is not yet available, this figure is now higher as a result of the pandemic and political instability in some regions.

The fashion industry has often been in the spotlight for poor/dangerous working conditions, unfair wages, excessive overtime, child labour and physical violence, which are some of the most significant indicators of forced labour.

News coverage of unpaid labour in garment factories, casualties from fire hazards at dyeing houses, or illegal immigrant workers can be seen from time to time. Whether you are a fashion brand owner, designer, buyer or compliance officer, it is crucial to carefully examine working conditions so your own brand won’t make the headlines one day, potentially causing enormous tangible and intangible damage.

Over the past two decades, since the concept of social compliance in the supply chain emerged, and the warning call of the tragedy of Rana Plaza in Bangladesh in 2013, the industry has implemented various initiatives, standards and programmes to improve the situation. We saw greater transparency being established amid this complex issue.

However, the massive order cancellations from buyers in Europe and the US at the beginning of the COVID-19 pandemic in 2020 was generally viewed as a major step back for social compliance. The humanitarian crisis caused by Russia’s invasion of Ukraine might pose a further threat to supply chain relationships.

The sudden influx of Ukrainian refugees could be exposed to workplace exploitation despite being given the legal rights to work in the European Union under the Temporary Protection Directive invoked in early March.

You may be thinking that you run a fairly stable supply chain and understand your suppliers well, and that the issues of forced labour are very unlikely to happen but you may want to re-think this.

Given the volatility and complexity of garment manufacturing processes, modern slavery could take place at various critical stages that you may not be aware of. Say for example, the labour condition of the suppliers that your vendors use could be a make-or-break in this multi-tier industry.

And speaking of volatility, taking the Ukraine situation as an example, in the coming few months, refugees could be hired by your garment or footwear suppliers in nearby countries such as Poland, Romania and Moldova, or further west to Germany and France. To prevent forced labour issues effectively, you must ensure a regular assessment of the compliance of your supply chain or adopt a robust system that adapts to the latest changes.

To assess the real-life scenarios of your suppliers, nothing beats an on-site visit to talk to the factory owner and workers, check on their employment records and business operating documents, walk around and observe the workplace. An on-site visit gives you plenty of valuable information that you can’t get from email communications or video calls. It's also a good way to foster a better understanding and relationship between both parties, which is beneficial in the long run.

This is particularly important as, with the changing attitudes of general consumers toward brand values and linking social compliance to a business's success, your performance in this area could set your brand apart from competitors.

There is no doubt about the benefits of on-site visits but you can well imagine the time, effort and cost involved. Lacking the knowledge to examine compliance properly could be a hurdle as well. The good news is that there are a plethora of social compliance audit standards, including amfori BSCI, ICS, SCLP, SMETA and WRAP which you can use instantly as a starting point.

The scope of these social compliance standards vary, but the processes are more or less the same – there are approved/verified auditors conducting the site assessment in person against the standards’ requirements through interviews, observation and document reviews. Local laws’ specifications on labour rights are taken into account so the compliance will come from both international and local perspectives.

All findings and non-compliant items will be detailed in an audit report, and corrective actions will be suggested and agreed upon on-site with the owner and other person-in-charge. You can either request your suppliers to go through any of these audit standards or leverage the shared audit results which are allowed in some of the schemes mentioned.

If you are looking for more information on which standards suit you best, how the audits are executed or other queries regarding social compliance, you can reach out to Eurofins Consumer Product Assurance, with a network of companies having approval from those programmes mentioned. Find out more at https://www.eurofins.com/assurance/consumer-products/factory-audit/