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More than a fashion faux pas: brands face modern slavery accusations

July 12th, 2017 - Posted by Mark Dunn in Procurement And Supply Chain, Human Trafficking Awareness

Glamorous photographs from Paris' Haute Couture Fashion Week were shared around the world, but behind the scenes, some of the world's largest fashion brands are facing ugly accusations of pollution, unethical sourcing and modern slavery in their supply chains.

Recent reports have exposed fashion's supply chain failures

Viscose fabrics win rave reviews for their silky feel, soft drape and breathability, but after some global fashion brands were recently accused of buying viscose from highly polluting factories, consumers may have a change of heart. Investigators for the Changing Markets Foundation visited ten manufacturing sites in China, India and Indonesia which allegedly produce materials for firms including Marks & Spencer, Tesco, H&M and Inditex (which owns Zara). The report found evidence of severe environmental damage, including water pollution from untreated contaminated waste and air pollution. It said this is "destroying marine life and exposing workers and local populations to harmful chemicals."

This revelation of supply chain failures in the fashion industry follows the publication of the 2017 Ethical Fashion Report by Baptist World Aid Australia. It investigated the workers' rights policies of 106 clothing companies which represent 330 brands, and graded them on how effectively they address the risk of forced labour, child labour and exploitation in their supply chains. The report said "transparency remains a challenge in the industry", noting that only 7percent of companies knew where all of their cotton came from. Yet children have reportedly been used to pick and process raw cotton which ultimately provides clothing for high-end shops in the west. The lesson for brands is clear: if you do not know who your suppliers are, you cannot ensure the workers making your products are free from exploitation.

But many companies have tried to improve their supply chain transparency in recent years. The Ethical Fashion Report found that 26percent of companies published their full supplier lists this year, compared to 16percent last year. 67percent of companies are making efforts to train suppliers, buyers and factory managers to understand human trafficking, child labour, and forced labour risks. 77percent of companies are working to actively improve leverage and relationships with suppliers, through supplier consolidation and/or industry collaboration.

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Long supply chains and seasonal trends have raised risk level

In the modern fashion industry, brands compete to quickly produce high volumes of affordable clothing, with clothing ranges changing every season. The pressure leads companies to cut corners and neglect sustainability concerns to maintain a competitive advantage. It's an approach that is likely to backfire. The adverse media coverage following reports by the Changing Markets Foundation and Baptist World Aid Australia should remind companies of the need for greater due diligence on their supply chains.
The fashion industry poses a higher risk of unethical sourcing than many other sectors because of the long and complex supply chains involved in manufacturing garments. For example, the overall stages in the supply chain of a cotton piece of clothing are cotton seed, cotton harvesting, ginning,
spinning and weaving and the cut-make-trim stage. At each stage, there is a risk of pollution from factories, unsafe working conditions and forced labour.

Major North American and European fashion firms tend to use factories in Asia during the garment production process, which means it can be harder to track every stage in their supply chains. Many brands faced scrutiny when the Rana Plaza building in Bangladesh collapsed in 2013, killing more than a thousand workers. The building housed factories which supplied to firms including Primark, KiK and C&A. These firms faced a media and social media campaign calling on them to pay into a compensation scheme for workers in the building.

Actions Companies Should Take

1. Request a free demo of LexisNexis Entity Insight - our newest tool for proactive supply chain and third-party risk monitoring.
2. Understand the links in your supply chain, and consider publishing your full supplier lists.
3. Train suppliers, buyers and factory managers to understand the risks of human trafficking, forced labour and pollution.

What do you think?