KnowTheChain launched a ranking of 20 large apparel and footwear companies on their efforts to eradicate forced labour and human trafficking from their supply chains, finding that only a small group of companies seriously addresses exploitation. Most companies have systems in place to monitor and react to forced labour and human trafficking, but few companies address systemic causes.
The average overall score of the 20 companies that were ranked across seven measurement areas was 46 out of a possible 100, a relatively high number when compared to the other two sectors that KnowTheChain benchmarked earlier this year (information communications technology and food and beverage sectors). However, there is still significant room for improvement. For example, the average scores on benchmark themes such as recruitment (22/100) and worker voice (29/100) are low.
Most nations in the world participate to some degree in the textile and apparel sector, and the employment rate in this sector has tripled in the last 15 years. Forced labour in this sector occurs both at the raw materials level and during the manufacturing stages of apparel and footwear companies’ supply chains, and ranges from the Turkman and Uzbek governments forcing children, students and other adults to harvest cotton, to exploitation of Chinese migrant workers through manufacturing facilities in Italy or Spain.
Overall, luxury brands including Prada, Kering (the holding company of Alexander McQueen, Gucci, Stella McCartney and others) and Ralph Lauren scored much lower than high street apparel retailers (such as H&M, Inditex or Primark), with none achieving an above average score. This gap between luxury brands and high street apparel brands is also reflected in benchmarks looking at other sustainability aspects, such as the Fashion Transparency Index, which focuses on supply chain management, and the Corporate Information Transparency Index, which focuses on environmental aspects.
Worker voice (29/100) is one of the lowest scoring themes of the benchmark. Only four companies proactively communicate the existence of a grievance mechanism to their suppliers’ workers, and only five companies engage workers outside of the context of their workplace in a manner that may give more voice to workers. Engagement with supply chain workers is an area where the industry needs to significantly improve, not least as engagement with workers can help identify, resolve, and prevent labour abuses in the supply chain that traditional monitoring systems do not catch.
Companies are falling particularly short in the area of recruitment practices, with an average score of 22/100. Only six companies benchmarked require that no fees be charged during any recruitment process conducted throughout the supply chain, and only two companies encourage direct hiring of workers in their supply chains. Poor recruitment practices, including excessive fees, leave workers vulnerable and open to exploitation, particularly through debt bondage.
Longstanding public awareness and pressure, spurred from incidents of child labour in the footwear sector in the 1990s and grave health and safety incidents in Bangladeshi factories in recent years, have resulted in companies putting in place supply chain monitoring systems. However, these have a strong focus on first tier suppliers, while workers tend to be at the greatest risk further down the supply chain. Adidas, which ranked highest in the benchmark (81 out of 100 points), works in partnership with its first tier suppliers to support training for second tier suppliers and subcontractors, as well as develops models to address risks of forced labour in its third tier supply chain.
To prevent and address risks of forced labour, companies are encouraged to roll out programs across their supply chains, including to lower tiers. Companies are also encouraged to promote direct hiring of workers where possible as well as to perform robust due diligence of third-party recruitment agencies. Lastly, companies are also encouraged to engage directly with supply chain workers outside the factory context, allowing companies to get a clearer picture of what is happening on the ground.
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Felicitas Weber is the project lead for KnowTheChain, a project of Business & Human Rights Resource Centre, Humanity United, Sustainalytics and Verité, which is dedicated to helping businesses and investors understand and address labour risks within corporate supply chains.
