Sweat-shopping: The role of companies
Surely it’s the responsibility of developing countries themselves, not companies, to solve these problems?
- The cost of cotton: Cotton subsidies
- The cost of cotton: Dirty cotton
- The cost of cotton: Funding exploitation
- Sweat-shopping: Introduction
- Ethical Commitments
- Sweatshopping: Feeling the 'squeeze'
- Sweat-shopping: The role of companies
- Sweat-shopping: A change of clothing
- FAQ: Where can we find an 'ethical' supplier?
- Redress Fashion Campaign Resources
Of course the problems in the garment industry are complex and companies can’t solve them alone.
Governments in developing countries must do more to implement and enforce workers’ rights. Minimum wages often aren’t high enough and workers’ rights are not always protected in law or practice. Factory owners have duties as employers to ensure they treat their workers fairly, but some are corrupt and greedy, and exploit their workforce.
Power in the supply chain
The Bangladeshi garment industry is a major employer and provides most of the country’s export earning. In the face of increasing global competition, especially from garment giant China,
Bangladesh’s relatively low labour costs have kept it competitive.
While the minimum wage of £12 is less than half of what trade unions in Bangladesh estimate to be the living wage, the government in Bangladesh has to consider demands for an increase against the threat of the country losing its competitive edge in the world market.
Even trade unions are limiting their demands by calling for a minimum wage of 3000 taka (£20) per month, while estimating the real living wage to be 4000 taka. Employers claim that in many cases, this demand will raise the cost of labour alone above the price they receive for a garment.
“Buyers who come to Bangladesh tell us, ‘we are businessmen, we want to make money. If we see cheaper prices in China we will go there’.” Factory owner, Bangladesh, quoted in The Guardian
Yet retailers and brands are, in many ways, the most powerful players in the supply chain. Many developing countries rely on the textiles industry for a large proportion of their income — and are eager to attract investment. Within and between these countries tens of thousands of factories are competing to sell to the big brands and retailers.
The brands and retailers can source from where they want — and chase the best deals across the globe. They are setting the terms of trade — terms which drive a ‘race to bottom’, where countries lower standards in order to be more competitive - and taking the biggest share of the profits. Their power limits the ability of the other players in the supply chain to promote workers’ rights.
But, instead of using this power responsibly — to promote better standards — their current practices are intensifying the exploitation at every stage of the production process. For their ethical policies to be meaningful, companies need to address their own behaviour, and take responsibility for the impact this has on conditions throughout their supply chains.
“When we negotiate with the factory owners they say they can’t increase salaries because they are getting a very low price from the buyers. The workers then get pressurised to hit higher targets to make up the losses suffered by the factory owner.” Union leader, Sri Lanka, ActionAid
“One supplier in China said that when suppliers have to make a choice between completing an order on time or not exceeding code norms on overtime, they always completed the order. Not doing so would definitely cost business, whereas exceeding code norms on overtime would only lead to a reprimand for non-compliance if an auditor happened to discover it.”
…Downward pressure on prices and lead times appeared to be having a negative impact: in all countries and sectors suppliers reported that this limited their ability to make improvements in labour practices. IDS, 2006
Sources and further reading
The ETI code of labour practice: Do workers really benefit?, Institute of Development Studies, University of Sussex, 2006
See also the resources on the previous page