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The 2017 Ethical Fashion Report - THE TRUTH BEHIND THE BARCODE - Analysis & Policy ...
The 2017
Ethical Fashion
Report
THE TRUTH BEHIND THE BARCODE
The 2017 Ethical Fashion Report - THE TRUTH BEHIND THE BARCODE - Analysis & Policy ...
THE 2017 ETHICAL FASHION REPORT
THE TRUTH BEHIND THE BARCODE

Date: 19th April 2017
Authors: Gershon Nimbalker, Jasmin Mawson, Hsu-Ann Lee, Claire Cremen
Behind the Barcode is a project of Baptist World Aid Australia
www.behindthebarcode.org.au

Report Design
Susanne Geppert

Front cover photo credit: Asian Development Bank,
used under creative commons license 2.0.

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The 2017 Ethical Fashion Report - THE TRUTH BEHIND THE BARCODE - Analysis & Policy ...
CONTENTS

   1. Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
  2. Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3. Made in … . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
		 Bangladesh 21, Cambodia 23,
		 China 25, India 27, Australia 29
  4. Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
  5. Knowing Suppliers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
  6. Auditing & Supplier Relationships. . . . . . . . . . . . . . . . 37
                                                                                                                                    Appendices
  7. Worker Empowerment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41                                         Statements from Non-Responsive
  8. Living Wage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44               Companies 80
                                                                                                                                    Sources and Further Reading 82
  9. Brand Index.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
                                                                                                                                    About Baptist World Aid 85
10. Survey Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60                Acknowledgments 85

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The 2017 Ethical Fashion Report - THE TRUTH BEHIND THE BARCODE - Analysis & Policy ...
1
Executive Summary
     This section outlines the research aims
     and scope, data collection and findings
     and overall results of all companies.

                                               4
The 2017 Ethical Fashion Report - THE TRUTH BEHIND THE BARCODE - Analysis & Policy ...
OVERALL GRADE

                                   Empowerment
                                        Worker
                                                 Relationships
                                                    & Supplier
                                                     Auditing
                                                                    Suppliers
                                                                 Knowing Your
                                                                                Policies
                                    D–              D+            D+            B          Abercrombie & Fitch*       D+
                                                                                                                                                                                                                                                                                               OVERVIEW

                                    B–              A–            A+            A+         adidas Group               A–
                                    F               C             B+            A          Aldi                       C+
                                    F               F             F             F          Ally Fashion*              F

                                                                                                                                      Overall Grades: A– P
                                    C–              B–            A             A          American Apparel           B
                                    C+              C–            C–            B+         Anthea Crawford*           C+
                                    C+              B+            A+            A+         APG & Co                   A–
                                    D–              C–            B–            A+         Arcadia Group              C+
                                    D+              C+            B+            A+         AS Colour                  B–
                                    D+              C+            B             A+         ASOS                       B–
                                    F               C–            C             A–         Bardot                     C–
                                    D–              D+            C+            B+         Ben Sherman Australia      C–

                                                                                                                                                                                            exploitation in their supply chains.
                                                                                                                                                                                                                                                                                               EXECUTIVE SUMMARY

                                    F               C             C+            A+         Best & Less                C
                                    F               F             F             F          Betts*                     F
                                    D+              D+            B+            A+         Big W                      C+
                                    D–              C             C+            A+         Billabong                  C+
                                    F               F             F             F          Bloch*                     F
                                                                                                                                                                                            the risks of forced labour, child labour, and

                                    F               B–            C+            D–         Blue Illusion              C–
                                                                                                                                                                                            World Aid Australia examining labour rights
                                                                                                                                                                                            This is the fourth report produced by Baptist

                                                                                                                                                                                            strength of their systems to mitigate against
                                                                                                                                                                                            It grades 106 companies, from A to F, on the

                                    D+              C+            B             A+         Boden                      B–
                                                                                                                                                                                            management systems in the fashion industry.

                                    F               D+            B             A+         Brand Collective           C
                                    D               D+            B+            A+         Clarks                     C+
                                    D+              C+            B             A+         Coles                      C+
                                    F               F             F             D          Corporate Apparel Group*   F
                                    B–              B+            A+            A+         Cotton On Group            A–
                                    C+              B+            A             A+         Country Road Group         B+
                                    C               C+            C+            A+         Cue Clothing Co            B–
                                    C+              B–            B+            A+         David Jones                B+
                                    F               F             F             F          Decjuba*                   F
                                    D+              B–            B+            A+         Designworks                B–
                                    C–              B             A+            A+         Esprit                     B+
                                    A–              A             A+            A+         Etiko                      A+
                                    D               C             C+            A+         EziBuy                     C+
                                    D+              C             C             A          Factory X                  C
                                    F               F             F             F          Farmers*                   F
                                    F               D             D+            A+         Fast Future Brands         D+
                                    F               D+            C             B          Forever 21                 D+
                                    C               C+            A–            A+         Forever New                B
                                    C+              B+            A+            A+         Freeset                    A–
                                    C–              C+            B+            A+         Fruit of the Loom          B–
                                                                                                                                                                                                                                        lives of 1,134 garment workers.

                                    D–              D             C–            A+         Fusion Retail Brands       C–
                                    D+              C+            B+            A+         Gap                        B–
                                    F               F             F             B          Gazal*                     D–
                                    F               C             C+            A+         General Pants              C
                                    C–              C+            C+            A+         Glassons                   B–
                                    D+              C             C+            A+         Gorman                     C+
                                    D               D             B+            A+         Grosby                     C
                                                                                                                                                             slavery. The report has grown in scope and

                                    C+              B+            A+            A+         H&M                        B+
                                                                                                                                                             work place, a living wage, and freedom from
                                                                                                                                                             that the rights of the workers who make their

                                    C+              B+            B+            A+         Hanesbrands Inc.           B+
                                    F               C–            C+            A–         House of Quirky            C–
                                                                                                                                                             It now assesses more than 2.5 times the number
                                                                                                                                                                                                                                        The first report was published in the wake of the

                                                                                                                                                             industry engagement every year since its release.

                                    D+              D+            A–            A+         Hushpuppies                C+
                                                                                                                                                             products are upheld. These rights including a safe
                                                                                                                                                             Since that time, the Report has benchmarked and
                                                                                                                                                                                                                                        factory collapse in Bangladesh, which claimed the

                                                                                                                                                             tracked the efforts of fashion companies to ensure
                                                                                                                                                                                                                                        industry’s most tragic disaster; the 2013 Rana Plaza

                                    F               F             D             D–         Icebreaker*                D–
                                    B               A+            A             A+         Inditex                    A
                                    C+              B–            A–            A+         Industrie                  B+
                                    D+              B             A+            A+         Jeanswest                  B+
                                    C–              C+            B+            A+         Jets                       B
                                    D               D+            A–            A+         Julius Marlow              C+
                                    D               C+            B+            A+         Just Group                 C+
                                    C+              A–            B+            A+         Karen Walker               B+
                                    C+              B+            B+            A+         Kathmandu                  B+
                                    C–              B–            B+            A+         Kmart Australia            B
                                    D+              C+            B+            A+         Kookai                     B–
                                    A–              A–            A–            A+         Kowtow                     A
                                                                                                                                                                                                                       Australian release.

                                    F               D+            D+            B–         L Brands*                  D+
                                    F               C+            B–            A+         Lacoste                    C+
                                    C–              B+            A+            A+         Levi Strauss & Co.         B+
                                    B+              B+            A+            A+         Liminal Apparel            A
                                    D               C             C+            A+         Lorna Jane                 C+
                                    F               C–            C–            B+         Lowes                      D+
                                    D+              B+            A             A+         Lululemon Athletica        B+
                                                                                                                                                                   But the need remains pressing.

                                    D+              C+            B+            A+         Macpac                     B–
                                    D–              D+            C+            A+         Max                        C
                                    A–              B+            A+            A+         Mighty Good Undies         A+
                                    D+              C+            C+            A+         Myer                       C+
                                    C–              C+            B             A+         New Balance                B–
                                    D+              C+            B–            A+         Next                       C+
                                                                                                                                                                                                                       Zealand, expanding beyond its traditional

                                    D+              C             B             A+         Nike*                      C+
                                                                                                                                                                   Since the tragedy in Bangladesh, efforts to

                                                                                                                                                                   accelerated, spurred on by increased public

                                    D–              C–            C+            A+         Noni B                     C
                                                                                                                                                                                                                       of companies of the first report, with 83% of

                                                                                                                                                                   improve conditions for fashion workers have

                                    B–              B+            A+            A+         Nudie Jeans                A–
                                    D+              C+            B+            A+         Oroton Group               B–
                                                                                                                                                                                                                       Ethical Fashion Report is being released in New
                                                                                                                                                                                                                       process. And this year, for the first time ever, the

                                    F               F             F             F          Oxford*                    F
                                                                                                                                                                                                                       companies being actively engaged in the research

                                                                                                                                                                   scrutiny and concerted consumer calls for change.

                                    C+              B+            A+            A+         Pacific Brands             A–
    * = non-responsive companies

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The 2017 Ethical Fashion Report - THE TRUTH BEHIND THE BARCODE - Analysis & Policy ...
EXECUTIVE SUMMARY
OVERVIEW

The Asia Pacific has become the world’s garment              both labour intensive and prone to employing
factory, with more than 40 million workers                   vulnerable workers. The US Department of Labor      These 106 companies represent
employed in manufacturing apparel and textiles               reports forced and/or child labour is used in
                                                                                                                 330 brands, to see the grades
across the region. For the vast-majority of these            garment, textile and footwear manufacturing
workers, wages remain at levels well below what is           throughout the region, including in China, India,   of specific brands, go to the
needed to lift them and their families out of poverty.       Bangladesh, Malaysia, Vietnam, Indonesia,           Brand Index on page 47.
The International Labour Organisation (ILO)                  Cambodia, and Pakistan.
estimates that more than half of the world’s forced          And though safety standards are improving
labourers (11.7 million), and that 78 million of its         for this industry, progress is slow. Factory
child labourers are in this region. Apparel is a             fires and unsafe working conditions remain
high-risk industry for these practices, being                a persistent problem.

Overall Grades: P– Z
                   A+
                   C+

                   C+
                   C+

                   C+

                   C+

                   C+

                   C+
                   B+
                   D–

OVERALL GRADE
                   C–

                   C–
                   B–

                   B–

                   B–

                   B–
                   A

                                                                                                                                                 Photo credit: gerrypopplestone, used under Creative Commons Licence 2.0.
                   C

                   C
                   B
                   B

                   B
                   F

                   F

                   F
                   Pavement United Brands*

                   Voyager Distributing Co*
                   Specialty Fashion Group

                   The Warehouse Group*
                   Retail Apparel Group

                   Webster Holdings
                   Simon de Winter

                   Target Australia

                   VF Corporation
                   The PAS Group
                   Seed Heritage

                   Sussan Group

                   Zimmermann
                   Roger David*
                   R.M. Williams

                   Tree of Life
                   Patagonia

                   PVH Corp
                   Quiksilver

                   UNIQLO
                   Rip Curl

                   Seafolly
                   RREPP

                   Wish*
                   Puma

        Policies
                   A+

                   A+
                   A+

                   A+
                   A+

                   A+
                   A+

                   A+
                   A+
                   A+
                   A+
                   A+

                   A+
                   A+
                   A+

                   A+
                   B–
                   A
                   A

                   A

                   A
                   F

                   F

                   F

                   F

   Knowing Your
                   A+

                   A+
                   D+

                   C+

                   C+

                   C+

                   C+

                   C+
                   B+
                   B+
                   A–

                   A–
                   C–
                   B–

                   B–

      Suppliers
                   A
                   C

                   C
                   B

                   B

                   B

                   B
                   F

                   F

                   F

       Auditing
      & Supplier
                   D+

                   D+

                   D+
                   C+

                   C+

                   C+

                   C+
                   B+

                   B+

                   B+
                   A–

                   C–

                   C–
                   C–
                   C
                   C
                   C

                   C
                   B

                   B

                   B
                   F

                   F

                   F

                   F

   Relationships

       Worker
                   D+

                   D+

                   D+
                   D+

                   D+
                   C+

                   B+
                   D–

                   D–

                   D–
                   C–
                   B–

  Empowerment
                   D

                   D

                   D

                   D
                   D

                   D
                   C
                   F

                   F

                   F

                   F
                   F
                   F

                                       * = non-responsive companies

                                                                                                                                                                                                                            6
The 2017 Ethical Fashion Report - THE TRUTH BEHIND THE BARCODE - Analysis & Policy ...
EXECUTIVE SUMMARY
INDUSTRY OVERVIEW

                                      C+                        13                             10
                                                                                                                       China remains the most
                                                                                                                       common country for
                                                                                                                       production, followed
                                                                             A                              F          by India, Bangladesh,
                                                                                                                       Vietnam and Thailand.

  companies assessed                 median grade        companies received            companies received
                                                           A range grades                  F grades

     2016                2017
                                                      Investing in supplier relationships is high on the priority for many companies:

       16%                26%                                        67%
                                                                              67% of companies are
                                                                              making efforts to train
                                                                              suppliers, buyers and                   77%
                                                                                                                                77% of companies are
                                                                                                                                working to actively
                                                                                                                                improve leverage and
                                                                              factory managers to                               relationships with
                                                                              understand human                                  suppliers, through
While transparency remains a challenge in the                                 trafficking, child                                supplier consolidation
industry, we have seen an improvement with the                                labour, and forced                                and/or industry
percentage of companies publishing full supplier                              labour risks.                                     collaboration?
lists going from 16% to 26% in the last year alone.

                                                                                                                Worker Empowerment

                                                                                              D+
                                                                                                                remains the area where

                                                      7%
Tracing of raw materials remains a huge                                                                         the most work still needs to
challenge with just 7% of companies knowing
                                                                                                                be done, with the median
where all of their cotton is coming from.
                                                                                                                grade for that section of our
                                                                                                                assessment being a D+.

                                                                                                                                                         7
The 2017 Ethical Fashion Report - THE TRUTH BEHIND THE BARCODE - Analysis & Policy ...
EXECUTIVE SUMMARY
INDUSTRY PROGRESS

Baptist World Aid’s first report
on the fashion industry was
published in 2013 and since
                                                                               59%           59% of companies assessed
then, we have seen the industry                                                              in the 2016 Report improved
make significant progress in                                                                 their grade in the 2017 Report
the quality of their labour rights
management systems…

Traceability
                           Companies tracing inputs suppliers                          Companies tracing raw materials suppliers
deeper into the     2013                                   49%                  2013             17%
supply chains
has increased
steadily over the
last four years:
                    2015
                    2016
                                                                 61%
                                                                        79%
                                                                                2015
                                                                                2016
                                                                                                         31%
                                                                                                               39%
                                                                                                                                   2017
                    2017                                                 81%    2017                             45%

                       42%           The number
                                     of companies
                                     investing in paying
                                                            2013
                                                            2015
                                                                       11%
                                                                        14%
                                                                                                         2016
                                     fairer wages to        2016               32%
                                     workers                2017                       42%

                The percentage of companies tracking the presence of trade unions and collective
                bargaining agreements in the majority of their factories has doubled since 2016.

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The 2017 Ethical Fashion Report - THE TRUTH BEHIND THE BARCODE - Analysis & Policy ...
EXECUTIVE SUMMARY
KEY FINDINGS

Key Findings                                         factory and were willing to publicly disclose where    monitoring suppliers back to fabric production
Company Performance                                  they were producing. Etiko and Mighty Good             (second tier suppliers), while Patagonia has done
                                                     Undies, also demonstrated that many of their           relatively more to trace its raw materials (third tier
Niche ethical producers have consistently been the
                                                     suppliers were paying a living wage.                   suppliers) and demonstrate improved wages for
best performers when it comes to strong labour
                                                     Of the multinational companies, Patagonia and          workers.
rights management. Etiko, Mighty Good Undies,
and RREPP all scored the top grade, A+. These        Inditex (Zara) scored the highest with an A grade.     Cotton On Group, Pacific Brands and APG & Co
companies knew their suppliers from farm to          Inditex was particularly strong on tracing and         were the best performing mid-to-large size
                                                                                                            companies headquartered in Australia, both
                                                                                                            scoring an A–. New Zealand’s best performers
                                                                                                            were Kowtow and Liminal Apparel, both scoring
                                                                                                            an A grade.
                                                                                                            One of the most encouraging trends has been the
                                                                                                            continued improvement in company efforts. Over
                                                                                                            the past 12 months, Macpac, OrotonGroup,
                                                                                                            Lululemon Athletica, and Karen Walker have all
                                                                                                            demonstrated significant increases of investment
                                                                                                            in their labour rights approach. Each have moved
                                                                                                            into the B grade range. OrotonGroup, for instance,
                                                                                                            tightened its policies, invested substantially in
                                                                                                            identifying the factories it sources from, and
                                                                                                            improved its supplier relationships. Subsequently,
                                                                                                            its grade moved from D+ to B–.

                                                                                                            Supplier Knowledge
                                                                                                            Knowing suppliers is a key pillar of a strong labour
                                                                                                            rights management system. If brands don’t know
                                                                                                            or don’t care who their suppliers are, there is
                                                                                                            virtually no way of ensuring that the workers who
                                                                                                            make their products are not being exploited. It is
                                                                                                            encouraging, then, that this continues to be one of
                                                                                                            the most significant areas of improvement within
                                                                                                            the fashion industry.

                                                                                                           Photo credit: Mark Fischer, used
                                                                                                           under Creative Commons Licence 3.0.                       9
The 2017 Ethical Fashion Report - THE TRUTH BEHIND THE BARCODE - Analysis & Policy ...
EXECUTIVE SUMMARY
KEY FINDINGS

The 2017 Ethical Fashion Report found that more            collaboratively through the Better Cotton Initiative
than three quarters of assessed companies knew             (BCI) to do so.                                             Companies that have published
each of their final stage manufacturing suppliers          BCI is a multi-stakeholder initiative that works with       supplier lists in the last year:
(first tier). For most companies, it is at this stage of   brands, NGOs, farms, and cotton-traders to
the supply chain that they have the strongest              improve social and environmental protections, and           • APG & Co            • Jeanswest
relationship. Thanks to this strong visibility, the        increase farm yields (read more on page 36).                • Big W               • Lululemon Athletica
worst forms of exploitation, forced labour, and            Amongst mid-to-large companies, Kathmandu has
child labour are now far less prevalent at this stage                                                                  • Brand Collective    • Pacific Brands
                                                           been a stand out performer when it comes to
of the supply chain.                                       tracing raw materials. By using a combination of            • Cotton On Group     • R.M. Williams
However, deeper into the supply chain, where               BCI and Fairtrade cotton, Kathmandu has traced              • Designworks         • RREPP
visibility is far less, the risks remain substantial.      almost 80% of its cotton supply and through                 • Esprit              • The PAS Group
Encouragingly though, companies are increasingly           Responsible Down Sourcing has traced 100% of its
identifying their suppliers beyond the first tier. The     down supply.                                                • Hanesbrands
2017 Ethical Fashion Report found that 81% of
companies are now actively tracing their fabric            Transparency
suppliers (second tier); this is up from 49% in 2013.      One of the most notable trends for the industry          These lists make it far easier for journalists, NGOs,
Furthermore, 39% of companies now know all, or             has been the improved corporate transparency             workers and unions to verify that the claims
almost all, their second tier suppliers (up from 24%       around supply chain practices. Transparency              companies make about their labour rights systems
in 2013).                                                  demonstrates a company’s willingness to be               are accurate, and that they are working as intended.
But perhaps one of the most exciting                       accountable to consumers, the public, and their          Workers and unions can also use these lists to
developments is the improved knowledge of their            workers. Transparency is critical to companies that      communicate directly with brands about their
raw material or third tier suppliers (usually cotton       wish to build trust.                                     grievances and concerns, and agitate for change.
farms). As the majority of the world’s child               One significant element of transparency is the           Also, several companies have made significant
labourers work in agriculture, the risks at this stage     publication of a list of suppliers that includes their   disclosures about their labour rights systems in the
of the supply chain are acute.                             business names and addresses. Since the release          past year. The increased openness from General
When Baptist World Aid began this research in              of the last Australian Fashion Report, the               Pants, Gorman, Seed Heritage, Factory X, and the
2013, most companies argued that tracing back to           proportion of companies publishing supplier lists        Brand Collective group of companies is
the farm was outside their scope of control and            has substantially increased from 16% to 26%. The         commendable. By sharing more about their labour
responsibility. At the time, raw materials tracing         move towards transparency is even more notable           rights systems, they help consumers understand
was largely restricted to Fairtrade companies.             amongst companies that have been engaged with            what efforts they are taking to ensure the rights of
Now 45% of companies are seeking to trace their            this project since it began in 2013; 45% of those        workers are upheld.
cotton suppliers, with many working                        companies are now publishing their supplier list.

                                                                                                                                                                            10
EXECUTIVE SUMMARY
KEY FINDINGS

Non-Responsive Companies                              Living Wage
and Low Transparency                                  The fashion industry continues to grow each year,
Low transparency is often one of the biggest          and is among the most labour intensive industries
determinants for why some companies receive the       in the world. It is also a significant driver of
lowest grades. Companies are graded based on a        employment for groups who have traditionally
combination of publicly available information and     struggled to find good jobs — women, migrants,
any information they are willing to disclose to the   and young people. Sadly, this cross section of
report’s researchers. As mentioned previously, 83%    society is also amongst its most vulnerable and, in
of companies choose to engage, with most seeing       many cases, rather than providing decent work,
benefit in the process of being benchmarked and       the fashion industry has exploited them.
gaining feedback.                                     A wage that is sufficient for workers to be able to
Nike and The Warehouse are examples of                afford the basics (food, water, healthcare, clothing,
companies that still scored relatively well with      electricity and education) for themselves and their
C range grades, even though they did not directly     dependants — a living wage — is a recognised a
engage with the research process. This is largely     human right. Yet the clear majority of garment
due to their strong commitment to public              sector workers receive wages well below this. It
transparency.                                         should come as no surprise then that the chief
However, several companies have chosen not to         concern among workers is their low wages.
disclose or make any information publicly             The benefits of a living wage are substantial.
available. Without this information, it becomes       In fact, payment of a living wage could transform
nearly impossible for the public to make informed     the lives of millions by allowing people to lift
decisions about whether companies are investing       themselves out of poverty and, at the same time,
sufficiently to ensure that workers are not being     drive economic growth within communities and
exploited. For this reason, these companies have      nations. Where living wages are being paid, the
been awarded an F grade in this report.               likelihood of other forms of exploitation such as
For more information about the research process       forced labour and child labour fall dramatically.
and non-responsive companies, refer to the            Finally, given the importance of wages to workers,
methodology (page 16). Non-responsive                 being able to demonstrate that workers are
companies were also given the opportunity to          receiving a living wage is one of the most telling
provide a statement about why they chose not to       signs that a corporate labour rights system is
engage with this research. These statements are       genuinely responsive to the needs of workers.
included on page 80.                                  It is encouraging then, that the proportion of
                                                      companies seeking to improve wages has                  Photo credit: Arne Hoel / The World Bank, used under Creative Commons Licence 2.0.

                                                                                                                                                                                               11
EXECUTIVE SUMMARY
                                            KEY FINDINGS

                                                                               continued to rise. In 2013, the proportion of           Companies accredited with ECA include Anthea
                                                                               companies that could demonstrate improved               Crawford, JETS, Cue Clothing, and R.M Williams.
                                                                               wages for workers was 11%, it has risen each year
                                                                               and now stands at 42%. It is worth nothing              Trade Unions and Collective Bargaining
                                                                               however, that (in most cases) wages are still below     It is workers that have the best visibility over
                                                                               a living wage level and only apply to a portion of      workplace conditions. One of the most effective
                                                                               workers in the supply chain.                            ways to address exploitation is ensuring that
                                                                               Ethical Brands such as Liminal Apparel, Etiko,          workers can organise and collectively bargain
                                                                               Mighty Good Undies, Freeset, Nudie, RREPP, and          to see their rights realised. Research by the ILO
                                                                               Kowtow were the stand out performers for living         has affirmed that nations with higher levels of
                                                                               wage payment. They each demonstrated that a             collective bargaining also have a tendency toward
                                                                               significant proportion of workers in their              better wages for low income earners.
                                                                               manufacturing factories were receiving living           While progress in the last year has been promising
                                                                               wages, a number also demonstrated living wages          in this area, the challenge remains substantial. The
                                                                               for their fabric production.                            number of companies that could report that at
                                                                               Hanesbrands is one of the leading companies             least 50% of their suppliers had democratically-
                                                                               among larger producers. More than 80% of its            elected trade unions, or collective bargaining
                                                                               manufacturing, and a significant proportion of its      agreements has doubled since our 2016 research
                                                                               fabrics production, comes from company owned            — however this is from a very low base. The
                                                                               facilities. Hanesbrands pays workers in all these       proportion still languishes at around one out of
                                                                               facilities a living wage.                               every five facilities.
                                                                               Other commendable efforts include Kmart                 The low levels of unionisation and collective
                                                                                                                                       bargaining reflect one of the most troubling
Photo credit: Baptist World Aid Australia

                                                                               Australia, which has benchmarked wages in a few
                                                                               of its Bangladeshi facilities and is now beginning to   challenges identified in our research: worker
                                                                               implement initiatives to raise wage levels (see         empowerment. This has consistently been the
                                                                               page 46 for more information); Patagonia, which         worst performing area for the industry. In the 2017
                                                                               pays a premium in its Fairtrade USA certified           Ethical Fashion Report, the median grade for this
                                                                               factories to directly benefit workers; and              pillar of companies’ labour rights management
                                                                               companies that are accredited with Ethical              systems was a low D+. To turn this around the
                                                                               Clothing Australia (ECA). ECA ensures that wage         industry must do more to listen and respond to
                                                                               levels and working conditions for Australian            worker voice, and in particular, improve efforts
                                                                               production (at a minimum) meet with Australian          towards collective bargaining and the payment of
                                            At a sewing factory in Cambodia.   standards (see page 43 for more on ECA).                a living wage.

                                                                                                                                                                                              12
EXECUTIVE SUMMARY
CONCLUDING COMMENTS

Concluding Comments                                     companies could argue that the responsibility to     emphasising those areas of the supply chain that
The garment industry can be a tremendous force          uphold worker rights rested with their suppliers.    are of higher risk.
for good.                                               Now, cultural and consumer expectations have         This report hopes to assist those efforts and, in
                                                        shifted and, as they’ve changed, so too has the      doing so, help the fashion industry realise its
In Cambodia, the industry employs 700,000
                                                        political and regulatory environment.                potential to contribute to a world free from
workers, around 4.5% of the population. In
Bangladesh, the number of people employed by            California, the United Kingdom, and the European     poverty and exploitation.
the industry has doubled in the last decade, and        Union have each introduced regulations that
                                                                                                             Photo credit: Daro Sulakauri/Asian Development Bank, used under
is now above 4 million.                                 require companies to disclose what they are doing    Creative Commons License 2.0.
                                                        to address slavery risks throughout their supply
Cambodians have been able to agitate for a near
                                                        chains. The French and the Dutch governments
tripling of the minimum wage for garment
                                                        have gone a step further, calling for mandatory
workers, despite heavy handed (and at times
                                                        plans to address labour rights and environmental
lethal) government crackdowns. And with global
                                                        risks. Australia, inspired by the UK’s Modern
attention drawn to Bangladesh, wages have
                                                        Slavery Act, has just announced an inquiry into
increased 87% and factory safety has improved
                                                        whether similar legislation should be nationally
substantially.
                                                        adopted.
Beyond jobs, garment production generates over a
                                                        This shift in expectations has been welcome, and
trillion dollars of export revenue, predominantly for
                                                        the progress that the industry has made has been
low and middle income countries. In Bangladesh
                                                        commendable. But consumers, companies, and
and Cambodia, the industry respectively
                                                        governments can still do more to help accelerate
accounted for 89.2% and 77.4% of total
                                                        these gains.
merchandise exports in 2014.
                                                        You, as consumers, can do more by preferencing
The industry has fuelled the growth of economies
                                                        those companies doing the most to uphold the
and at the same time, facilitated millions of people
                                                        rights of workers in their supply chains, and by
migrating from lives of subsistent rural agriculture
                                                        calling on those that aren’t to do better.
into factory work, giving them hope of a better life
                                                        Companies can do more by strengthening their
for themselves and their families.
                                                        labour rights systems and by ensuring that
However, we know that wherever measures haven’t         workers, from farm to factory, receive a living
been sufficient to uphold the rights of workers, the    wage. And the Australian and New Zealand
industry has also driven forced labour, child labour,   governments can do more by introducing
unsafe working conditions and exploitation.             legislation requiring companies to publicly report
Expectations of the role of individual companies        on the measures taken to address slavery and         At the Turkmenbashi Tekstil Kompleksi in Turkmenistan,
to address these issues have changed. Once,             exploitation throughout their supply chains,         where over 3,000 mainly female workers are employed.

                                                                                                                                                                               13
RAW
                                                                                                                                               FINAL

                                                                                                  INPUTS

                                                 MATERIALS
                                                                                                                                           MANUFACTURING

                                                             Monitoring
                                                                                                           Monitoring
                                                                                                                                                           Monitoring

                                                                          Traceability
                                                                                                                        Traceability
                                                                                                                                                                        Traceability

                                             Living Wage
                                                                                         Living Wage
                                                                                                                                       Living Wage
                                                                                                                                                                                                                  OVERALL GRADE

                                                                                                                                                                                       Abercrombie & Fitch*       D+

                                    Key:
                                                                                                                                                                                       adidas Group               A–
                                                                                                                                                                                                                                  EXECUTIVE SUMMARY

                                                                                                                                                                                       Aldi                       C+
                                                                                                                                                                                       Ally Fashion*              F
                                                                                                                                                                                                                                  VISUAL OVERVIEW A– M

                                                                                                                                                                                       American Apparel           B

                                    100%
                                                                                                                                                                                       Anthea Crawford*           C+
                                                                                                                                                                                       APG & Co                   A–
                                                                                                                                                                                       Arcadia Group              C+
                                                                                                                                                                                       AS Colour                  B–

                                    76–99%
                                                                                                                                                                                       ASOS                       B–
                                                                                                                                                                                       Bardot                     C–

     * = non-responsive companies
                                                                                                                                                                                       Ben Sherman Australia      C–

                                    51–75%
                                                                                                                                                                                       Best & Less                C
                                                                                                                                                                                       Betts*                     F
                                                                                                                                                                                       Big W                      C+
                                                                                                                                                                                       Billabong                  C+

                                    26–50%
                                                                                                                                                                                       Bloch*                     F
                                                                                                                                                                                       Blue Illusion              C–
                                                                                                                                                                                       Boden                      B–

                                    1–25%
                                                                                                                                                                                       Brand Collective           C
                                                                                                                                                                                       Clarks                     C+
                                                                                                                                                                                       Coles                      C+

                                    0%
                                                                                                                                                                                       Corporate Apparel Group*   F
                                                                                                                                                                                       Cotton On Group            A–
                                                                                                                                                                                       Country Road Group         B+
                                                                                                                                                                                       Cue Clothing Co            B–
                                                                                                                                                                                       David Jones                B+
                                                                                                                                                                                       Decjuba*                   F
                                                                                                                                                                                       Designworks                B–
                                                                                                                                                                                       Esprit                     B+
                                                                                                                                                                                       Etiko                      A+
                                                                                                                                                                                       EziBuy                     C+
                                                                                                                                                                                       Factory X                  C
                                                                                                                                                                                       Farmers*                   F
                                                                                                                                                                                       Fast Future Brands         D+
                                                                                                                                                                                       Forever 21                 D+
                                                                                                                                                                                       Forever New                B
                                                                                                                                                                                       Freeset                    A–
                                                                                                                                                                                       Fruit of the Loom          B–
                                                                                                                                                                                       Fusion Retail Brands       C–
                                                                                                                                                                                       Gap                        B–
                                                                                                                                                                                       Gazal*                     D–
                                                                                                                                                                                       General Pants              C
                                                                                                                                                                                       Glassons                   B–
                                                                                                                                                                                       Gorman                     C+
                                                                                                                                                                                       Grosby                     C
                                                                                                                                                                                       H&M                        B+
                                                                                                                                                                                       Hanesbrands Inc.           B+
                                                                                                                                                                                       House of Quirky            C–
                                                                                                                                                                                       Hushpuppies                C+
                                                                                                                                                                                       Icebreaker*                D–
                                                                                                                                                                                       Inditex                    A
                                                                                                                                                                                       Industrie                  B+
                                                                                                                                                                                       Jeanswest                  B+
                                                                                                                                                                                       Jets                       B
                                                                                                                                                                                       Julius Marlow              C+
                                                                                                                                                                                       Just Group                 C+
                                                                                                                                                                                       Karen Walker               B+
                                                                                                                                                                                       Kathmandu                  B+
                                                                                                                                                                                       Kmart Australia            B
                                                                                                                                                                                       Kookai                     B–
                                                                                                                                                                                       Kowtow                     A
                                                                                                                                                                                       L Brands*                  D+
                                                                                                                                                                                       Lacoste                    C+
                                                                                                                                                                                       Levi Strauss & Co.         B+
                                                                                                                                                                                       Liminal Apparel            A
                                                                                                                                                                                       Lorna Jane                 C+
                                                                                                                                                                                       Lowes                      D+
                                                                                                                                                                                       Lululemon Athletica        B+
                                                                                                                                                                                       Macpac                     B–
                                                                                                                                                                                       Max                        C
14
EXECUTIVE SUMMARY
VISUAL OVERVIEW M– Z

                                 A+

                                 A+
                                 C+
                                 C+

                                 C+

                                 C+

                                 C+
                                 C+

                                 C+

                                 C+

                                 C+

                                 C+
                                 B+
                OVERALL GRADE

                                 D–
                                 A–

                                 A–

                                 C–

                                 C–
                                 B–

                                 B–

                                 B–

                                 B–

                                 B–

                                 B–
                                 A
                                 C

                                 C

                                 C
                                 B
                                 B

                                 B
                                 F

                                 F

                                 F

                                 F
                                 Pavement United Brands*

                                 Voyager Distributing Co*
                                 Specialty Fashion Group

                                 The Warehouse Group*
                                 Retail Apparel Group
                                 Mighty Good Undies
                                                                                        This table provides a summary on how companies

                                 Webster Holdings
                                 Simon de Winter

                                 Target Australia
                                                                                        have performed on three of the most significant

                                 VF Corporation
                                 The PAS Group
                                 Seed Heritage
                                 Pacific Brands
                                 Oroton Group

                                 Sussan Group

                                 Zimmermann
                                 Roger David*
                                 R.M. Williams
                                 New Balance

                                 Nudie Jeans
                                                                                        elements needed for a strong labour rights

                                 Tree of Life
                                 Patagonia

                                 PVH Corp
                                 Quiksilver

                                 UNIQLO
                                 Rip Curl

                                 Seafolly
                                 Oxford*
                                                                                        management system. It breaks down by tier of the

                                 RREPP
                                 Noni B

                                 Wish*
                                 Puma
                                 Nike*
                                 Myer

                                 Next                                                   supply chain the percentage of facilities that have
                                                                                        been traced, are being monitored and are paying
                                                                                        workers a living wage.
                Traceability

                Monitoring

    FINAL
MANUFACTURING
                Living Wage

                Traceability

                Monitoring

   INPUTS
                Living Wage

                Traceability

                Monitoring

    RAW
  MATERIALS
                Living Wage

                                 Key:    100%   76–99%   51–75%   26–50%   1–25%   0%

                                * = non-responsive companies

                                                                                                                                              15
2
Methodology
        This section outlines the aims and scope of our
        research, the process of data collection and
        evaluation, and our company grading system.

                                                          16
METHODOLOGY

Aims                                                  While a number of the areas we assess will provide
Our research provides a panorama of ethical           a proxy for how well a brand is able to manage its
                                                                                                                  Comment on non-responsive
sourcing practices in the fashion industry as a       environmental impacts, we do not directly assess
                                                                                                                  companies
resource for consumers, corporations, investors       environmental impact for this report. It is our intent
                                                                                                                  Brands which are non-responsive, along with
and policymakers.                                     that this will be a part of our future research.
                                                                                                                  those that do not provide any substantive
We seek to empower consumers to make more             In 2017, our research covered 106 companies of              information, are indicated in this report by
informed and ethical choices in purchasing            varying sizes across men’s, women’s and children’s          an asterisk next to their name. They were
apparel and footwear, and give investors insight      apparel and footwear. It is worth emphasising               also given the opportunity to provide a
into supply chain governance. We aim to help          that Baptist World Aid Australia does not do site           short statement as to why they chose not to
businesses with benchmarking and learnings, and       inspections of factories. Therefore, our ratings are        respond, and these can be found on page 80.
identify issues for policymakers to address. By       not an assessment of actual conditions on the                 We acknowledge that many of the non-
presenting the performance of companies relative      ground, but rather an analysis of the strength of           responsive brands may be doing more to
to each other via an A–F grading updated on an        a company’s labour rights systems. We rely on               improve their ethical sourcing than we have
annual basis, our goal is to encourage individual     data that is publicly available, alongside evidence         been able to assess them on. However, if
companies and the industry as a whole to engage       of systems and practices that are provided by               brands do not disclose, or are unwilling to
in constant improvement of their ethical sourcing     companies to conduct our assessments.                       disclose, what they are doing to ensure that
practices.                                                                                                        workers are not exploited in their supply
At a system level, we recognise the positive                                                                      chains, then it becomes near impossible for
                                                      Data collection
impact that the apparel industry can have around                                                                  consumers and the public to know if these
                                                      We assess a large selection of companies on
the world. Our goal is to contribute to ending                                                                    brands are investing sufficiently to mitigate
                                                      40 specific criteria at three critical stages of the
worker exploitation and alleviating poverty                                                                       these risks.
                                                      supply chain as a proxy for the entire fashion
in the developing countries where apparel is          supply chain.
manufactured.
                                                      In conducting a brand evaluation, our research           We actively seek to engage brands (and pursue
                                                      team first assesses a brand’s own publications           contact with non-responsive brands) using at least
Scope of the research                                 alongside any relevant independent reports and           three different mediums: phone calls, emails and
Our research classifies the garment manufacturing     data. Our team then sends its findings — marked          letters. All non-responsive companies receive our
supply chain into three stages of production: final   against the assessment criteria outlined above           findings twice by post. Letters are also mailed to
stage, inputs stage and raw materials, as defined     — to the brand for comment and further input,            the board chair and CEO. This process ensures that
on the following page. Across these three stages      which is reviewed in turn. We seek to engage             in almost every instance where a brand has not
of production, we look at four broad themes of        with brands, collect evidence and understand             responded, it is because it has intentionally chosen
social responsibility: policies, knowing suppliers,   their processes and systems; however, our                not to do so.
auditing/supplier relationships and worker voice,     research team does not conduct any factory floor         In this edition of the report, 83% of brands have
also defined on the following page.                   inspections as part of the grading process.              engaged directly with our research process.

                                                                                                                                                                      17
METHODOLOGY

What the research covers
                                                      Policies                     Knowing suppliers             Auditing and supplier              Worker empowerment
Our research collected and evaluated data
                                                                                   (traceability and             relationships                      (worker voice and
from apparel companies using the following                                         transparency)                                                    living wage)
classification of the supply chain and themes
of social responsibility.                             Why it matters: Policies     Why it matters: In            Why it matters: Monitoring         Why it matters: For a labour
                                                      form the standards           order to ensure that          facilities and building            rights system to improve
                                                      that brands want their       worker rights are being       relationships are critical to      working conditions, workers
                                                      production to adhere         upheld, brands need to        ensuring policies are adhered      must be empowered, allowed
                  RAW MATERIALS                       to. They are the baseline    know which facilities         to and improvements in             a voice, and have their most
                  • Cotton (farming)                  by which a brand can         are responsible for the       working conditions are             critical concerns addressed.
                                                      measure the effectiveness    production of their           being delivered. While no          It is workers themselves who
                  • Wool, rawhide etc
                                                      of its overall efforts to    product.                      monitoring process is perfect,     have the best visibility of
                    (husbandry, shearing etc)         uphold worker rights.                                      high quality monitoring            working conditions.
                                                                                   What we assess: How
                  • Crude Oil for synthetic                                                                      helps to provide a better
                                                      What we assess:              much of the supply                                               What we assess: Whether
                    fibres, plastics, etc             Provisions to prohibit       chain a company has
                                                                                                                 understanding of the
                                                                                                                                                    workers are able to unite
                    (extraction, refining)                                                                       conditions of workers. A focus
                                                      forced labour and child      traced; what it does to                                          through democratic trade
                                                                                                                 on strengthening relationships
                                                      labour, allow for freedom    monitor and address                                              unions; whether collective
                                                                                                                 allows trust building, and
                                                      of association and protect   subcontracting; what                                             bargaining agreements
                                                                                                                 increases a brand’s capacity
                                                      worker health and safety;    efforts it is undertaking                                        have been established;
                                                                                                                 to drive change.
                                                      whether a brand intends      to trace the remainder of                                        whether effective grievance
                                                      its policies to cover        its supply chain; a brand’s   What we assess: What               mechanisms are in place;
                  INPUTS PRODUCTION                   the entire production        transparency and how          percentage of production           whether workers are receiving
                                                      process; whether the         willing they are to be        facilities are audited; whether    a living wage so they can
                  • Textiles production               brand is undertaking         held accountable through      unannounced and offsite            support their families; a
                    (ginning, spinning, knitting,     important measures           the information it shares     worker interviews and              brand’s efforts in moving
                    dying, embroidery)                towards improving            about it’s supply chain.”     anonymous worker surveys           towards paying living wage.
                  • Leather (tanning)                 working conditions in                                      are used; whether checks are
                  • Plastic (processing, moulding)    facilities, such as multi-                                 done on high risk activities
                                                      stakeholder collaboration                                  like labour brokers and
                                                      and preventing price                                       recruitment fees; whether
                                                      squeezing.                                                 the brand is willing to be
                                                                                                                 transparent about its results
                                                                                                                 and remedial actions; whether
                                                                                                                 brands are actively involved in
                                                                                                                 building supplier relationships
                  FINAL STAGE PRODUCTION                                                                         through consolidation,
                  • Cut-Make-Trim (CMT)                                                                          collaboration, supplier training
                                                                                                                 and long term relationship
                    manufacturing (cutting, sewing,
                                                                                                                 building.
                    printing)

                                                                                                                                                                                    18
METHODOLOGY

Data evaluation
To verify the data provided by companies, we
review company responses and ask for clarification
and supporting documentation. In some instances,
we have relied on audit data provided to us by
companies to verify conditions and benefits that
workers receive.
Our research team and company representatives
work through the survey questions until both
parties are satisfied that the data presented is an
accurate representation of the company’s policies
and processes.
To ensure consistency in our assessment of
companies, after finalising company responses,
we cross-check survey responses. This means that
all data is reviewed at least three times by three
different people.
We then evaluate the data collected by using a                                                                        Photo credit: Adam Cohn, used under Creative Commons Licence 2.0.
                                                      Men unloading cotton from a truck.
survey tool developed with input from supply
chain specialists, NGOs and company experts.
This tool provides a grade for each company and       of that company’s products. Low graded                   strength of their efforts, similar to awarding grades
across each area of our research.                     companies are those that are not taking these            on a bell curve (i.e. best performers receiving A’s,
                                                      initiatives, or those choosing not to disclose if they   worst receiving F’s and many in the middle).
Grading                                               are taking such initiatives.                             Some company structures encompass several
The grades awarded in this report are a measure       It is important to note that a high grade does           brands with differing labour rights management
of the efforts undertaken by each company to          not mean that a company has a supply chain               systems. In these cases, we have graded brands
mitigate the risks of forced labour, child labour     which is free from exploitation. Rather, it is an        separately and provided an average for the
and worker exploitation throughout their supply       indicator of the efforts and the strength of the         company that owns or distributes them. Individual
chains. Higher grades correspond to companies         systems a company is undertaking to reduce the           brands corresponding to a single company are
with a labour rights management system that,          risk of exploitation. Furthermore, our grading           listed, alongside their grade, in the Brand Index on
if implemented well, should reduce the risk and       methodology is designed to spread companies out          page 47.
extent of worker exploitation in the production       along the ‘A–F continuum’ based on the relative

                                                                                                                                                                                          19
3
MADE IN …
     This section examines the prevalence of child labour,
     forced labour and worker exploitation in a global context.
     It provides insights into specific risks of abuse that exist in
     garment production across multiple countries, as well as
     stories of the positive impact the apparel industry can have
     on the lives of workers.
     All stories and images are used with permission.

                                                                       20
MADE IN …
BANGLADESH

The garment industry is central to Bangladesh’s     gesture, as it is a legally binding agreement and                        Alliance for Bangladesh Worker Safety) has made
economy, employing around 5 million workers.        brands are collectively contributing $10 million                         important adjustments to the garment industry
                                                    towards guaranteeing a safe working environment                          there, many insist that change is still too slow.
Cheap labour makes Bangladesh a popular             for the garment industry in Bangladesh.1                                 Inspections are behind schedule. The Accord
sourcing country for foreign companies.                                                                                      covers only 60% of Bangladesh’s RMG industry,
                                                    Three years since its inception in 2013 as a
However cheap labour means exploitatively           response to the Rana Plaza tragedy, close to                             and the Accord’s own executive director estimates
                                                                                                                             that less than half of all exporting factories have
low wages and risk-filled working conditions —      3,700 inspections and re-inspections have
                                                    been conducted. According to Union Network                               been inspected.3 In other words, there may be
the Rana Plaza collapse was a prominent but                                                                                  as many as 3.5 million workers who still have no
                                                    International (UNI), one of two global union
far from isolated incident in a series of deadly    signatories, over 100,000 safety issues have been                        protection against hazardous labour conditions.
factory accidents.                                  identified and more than half of these have now                          Global will also stands opposed to the Bangladeshi
                                                    been reported or resolved.2                                              government’s inertia in prosecuting those
                                                                                                                             responsible for Rana Plaza and other factory
The Accord: Improvements in safety                                                                                           tragedies in the country — Although culpable
                                                    The Accord: Still a long way to go
Two hundred and seventeen companies, NGOs                                                                                    homicide charges have been laid against factory
                                                    Awareness of building safety in Bangladesh
and global and Bangladesh trade unions have                                                                                  owners like Delwar Hossain (Tazreen Fashions
                                                    and global will to improve conditions remain
signed the Accord which covers 1,661 factories.                                                                              factory fire, 2012), at the time of this report’s
                                                    strong, but while the Accord (and the voluntary
The Accord is more than lip-service or a symbolic                                                                            publication not one factory owner has been
                                                               Photo by ASaber91, used under Creative Commons Licence 2.0.   successfully prosecuted.
                                                                                                                             And, while the spotlight is on safety in Bangladesh,
                                                                                                                             the country’s minimum wage does not constitute
                                                                                                                             even a quarter of the estimated living wage.4
                                                                                                                             Millions of Bangladeshis remain unable to provide
                                                                                                                             for their families’ basic needs.

                                                                                                                             1 Bangladesh Accord: Guide for Potential Signatories 2015.
                                                                                                                             2 UNI Global Union — The Bangladesh Accord. Includes 75% of
                                                                                                                               electrical problems resolved. According to UNI, 53,091 of 103,846
                                                                                                                               (51%) hazards reported/resolved; according to Accord executive
                                                                                                                               director, Rob Wayss, 64%: see Kaye 2016.
                                                                                                                             3 Kaye 2016.
                                                                                                                             4 Global Living Wage Coalition.

                                                                                                                             Dhaka, Bangladesh. The country’s capital is home
                                                                                                                             to an estimated 14.5 million people, many of whom
                                                                                                                             work in the apparel industry.
                                                                                                                                                                                                   21
MADE IN …
BANGLADESH

SALAHEYA’S STORY: Struggling
to support her family
Salaheya Khatun was a child bride and teen
mother who suffered brutal domestic violence
before she found a homeworker job stitching
quilts. But poverty led her to leave her family
and become a garment worker at a popular
UK retailer’s supplier in Dhaka.

                                                                                                                                       Photo credit: Heather Stilwell / Labour Behind the Label.
Now in her mid-20s, Salaheya is working 72-hour
weeks and earning just 7000 Taka a month
(roughly AUD$113). That’s only about half of a
living wage!1
Sewing from 8am to 5pm, she then does three
hours of overtime before returning to her room
in a nearby slum, a tiny space she shares with two
other garment workers. Salaheya only sees her
daughter once every two to three months — her
parents care for the child, but they live in a village
six hours away.
Because she is sending her parents almost half
of her 7000 Taka salary to help care for her             Bangladeshi garment worker Salaheya Khatun.
daughter, Salaheya cannot afford to cover her own
basic needs.                                             Salaheya also explains that the factory where she   “I just want to be able
                                                         works is hostile to unions — about 50 employees
“I am in debt by around 1000 Taka every month                                                                 to support my family.”
because I need to pay for groceries and supplies         were fired for attempting to join one. She sees
                                                         brand representatives visit the factory but has     Salaheya, Bangladeshi
on credit. I need to find work at a factory with a
                                                         never been given the opportunity to speak           garment worker
higher salary,” she says. “I just want to be able to
support my family.”                                      with them.

1 Global Living Wage Coalition.

                                                                                                                                            22
MADE IN …
                                                         CAMBODIA

                                                         Apparel is key to Cambodian industry, making             Labour Organization (ILO) factory assessments a       In fact, the two are related: because 60–80%
                                                         up 80% of the country’s total exports. 700,000           prerequisite for exporting factories. They’ve gone    of garment workers belong to 30 unions and
                                                                                                                  a step further by publishing those audits.            associations — compared to 5% across other
                                                         workers make garments for a living, supporting                                                                 industries — these labour unions can advocate
                                                                                                                  It’s been 15 years since the ILO’s Better Factories
                                                         around 2 million Cambodians.                                                                                   on behalf of almost 600,000 workers.1 Thanks
                                                                                                                  program began in Cambodia. Relative to other
                                                                                                                  apparel-producing countries, Cambodia is strong       to dialogue and conflict resolution between
                                                         Minimum wage and unionisation                            on worker wage and voice. Almost all factories        employers and employees, workplace rights
                                                         Cambodia has developed a niche for ethical               are now paying a minimum wage and there               education, legal support for workers, and public
                                                         production in the garment industry, being the            is a high level of unionisation thanks to Better      media campaigns on the plight of garment
                                                         first country in the world to make International         Factories.                                            workers, industry wages have climbed to US$153
                                                                                                                                                                        per month in 2017.2

                                                                                                                                                                        Piece wages and gender inequality
                                                                                                                                                                        Despite the positive changes seen with respect
                                                                                                                                                                        to wages, there are some concerning signs that
                                                                                                                                                                        ‘piece wages’ may compromise worker safety.
                                                                                                                                                                        Earning a piece wage, rather than a salary based
                                                                                                                                                                        on hours worked, means that a worker is paid per
                                                                                                                                                                        garment. The pressure to create more clothes
Photo credit: Chhor Sokunthea / World Bank, used under

                                                                                                                                                                        in less time puts workers at risk of exhaustion
                                                                                                                                                                        and incentivises overtime. Product quality also
                                                                                                                                                                        deteriorates as a result.
                                                                                                                                                                        Another point of concern is the uneven impact
                                                                                                                                                                        of conditions on women, who make up 90%
                                                                                                                                                                        of garment industry workers. Piece wages and
Creative Commons Licence 2.0.

                                                                                                                                                                        the lack of job security afforded by short-term
                                                                                                                                                                        contracts weaken both the health of overworked
                                                                                                                                                                        women and their position within their own
                                                                                                                                                                        households and communities.

                                                                                                                                                                        1 Merk 2016.
                                                                                                                                                                        2 Deutsche Welle 2016.

                                                         A garment worker in Phnom Penh sews garter to a skirt.

                                                                                                                                                                                                                           23
MADE IN …
CAMBODIA

THEARY’S STORY: From
garment worker to development
professional
Theary Som had heard that being an apparel
worker was a good employment opportunity
to set you up for your future. So, at 16, she
lef t high school and moved with her family
to Phnom Penh, where she found a job at
a garment factory.

She, like the five hundred other Cambodian men
and women at the factory, worked for a Chinese
company producing uniforms for a US brand. She
spent seven years working here, and a total of

                                                                                                                                                                                Photo supplied by Theary Som.
eight in Cambodia’s garment factories.
When Theary first started as a sewer, Better
Factories did not yet exist in Cambodia and the
conditions for workers were poor. Only one of her
co-workers was a union member. Theary’s workday
started at 7am and officially ended at 6pm; one
hour was given for lunch, but she regularly worked
                                                        Theary Som left the Cambodian garment industry to study English and now works for an NGO serving her local community.
an additional two hours of overtime in the evening.
She was there seven days a week, with only one
day off a month.                                        years. During that time, she received a university            Theary is still in contact with her friends at the
It was exhausting work but Theary was committed         degree in accounting.                                         garment factory. And even though they tell her
to preparing for her future. In her gruelling time as   Theary now coordinates an education program                   that conditions have improved, they still look at
a sewer, she managed to save up enough money            for poor children in her community. She has loved             Theary and tell her how blessed she is to have
to leave the garment factory and study English.         watching the kids grow — some of her former                   made a better life for herself and her family.
With these language skills, she found a job at a        students are now teenagers. She says their English            She has shown them there is a future beyond
not-for-profit, where she has now been for six          is now better than hers!                                      the apparel industry factories.

                                                                                                                                                                                    24
MADE IN …
CHINA

China is the world’s largest textiles producer.                        Labour shortages in the Pearl River Delta gave the       production schedules and increased demands.
In 2015/16, it fell to second place behind India                       30 million migrant workers in the region greater         So, a workday may be as long as 17 hours, and no
                                                                       leverage to bargain with employers. However,             rest day is guaranteed. Compounding this situation
in cotton production, but remains the biggest                          there has been an increasing clampdown on union          is the fact that overtime may only be paid yearly
consumer of cotton, importing from countries                           activity coinciding with government concerns             — meaning workers do not even see the fruit of
like the United States. China continues to lead                        about a shift in production to cheaper countries         their overtime from month to month. This gives
                                                                       like Vietnam.                                            employers significant power over workers who
the world in polyester production. The Country
                                                                                                                                become more vulnerable to exploitation.
is also infamous for restricting union activity.
                                                                       Excessive overtime                                       Of the audit reports we viewed in our research this
                                                                       The key risk for worker rights in China is excessive     year, there was a pattern of overtime rates as high
Wage increase                                                          overtime. Despite relatively good wage growth, the       as 200%, and even 300% for public holidays — a
Of the world’s top garment-producing nations,                          current salaries are insufficient to cover the cost of   huge incentive for poor labourers to work longer
China has seen a significant rise in worker wages,                     living, leading most workers to seek overtime.           hours. In some cases, especially in China, what
which in Shanghai almost doubled between 2010                          To address a lack of ordering predictability from        workers earned in overtime was higher than their
and 2016. The current minimum wage, which varies                       brands, factories use overtime to meet spikes in         base wage.
by region, is now 2190 yuan (US$327) per month
in Shanghai — merely 57% of what Asia Floor

                                                                                                                                                                                      Photo credit: Ed-meister, used under Creative Commons Licence 2.0.
Wage considers a living wage.1
Despite severe restrictions on union activity,
worker strikes are contributing to this progress.
Organisations are finding ways to empower
workers — for example, China Labour Watch
educates workers on labour rights and collective
bargaining, and provides free advice and
counselling services for them via a hotline. In
the same vein, the China Labour Bulletin, which
offers legal assistance for workers disputing their
employers, is building a network of trade union
representatives and has put together a Collective
Bargaining Handbook for worker training.

1 ‘Wages and employment’, China Labour Bulletin 2016. China sets its
  minimum wage rate by region. In Shanghai, where wages are highest,
  this went from 1,120 yuan in 2010 to 2,190 yuan (US$327) in 2016.
  Living wage calculation based on Asian Floor Wage for China, which   Clothing factory in Dongguan, China.
  is US$570.

                                                                                                                                                                                            25
MADE IN …
CHINA

HAN’S STORY: Labour rights
activism in China
Independent unions are banned in China
— only the All-China Federation of Trade
Unions (ACFTU) is authorised to resolve
disputes between employers and employees.
In response to concerns that the ACFTU
represents managers more of ten than it does
workers, around 70 labour NGOs have sprung
up, many out of Hong Kong.

One of these labour NGOs was the Panyu Workers’

                                                                                                                                                                                 Photo credit: China Labour Bulletin.
Centre (PWC). It supported workers at the Lide
Shoe Factory — which produces for brands like
Calvin Klein, Coach and Ralph Lauren — educating
them about their rights. After over 2,500 workers
went on strike they were, collectively, able to
negotiate overtime, social insurance and housing
contributions with factory management.
It was a great achievement, but it came at a heavy
                                                      Meng Han received a jail sentence for his labour rights activism on behalf of factory workers.
cost. In December 2015, four staff members of the
PWC were arrested. Three men and one woman
were eventually convicted and sentenced despite       They were pressured into making false statements                   home as part of state pressure exerted again union
questions over the protection of their civil rights   in court about being duped by “hostile” foreign                    organisers. Meng refused to assist the case against
during the legal process. Director Zeng Feiyang       organisations to “incite” workers into engaging in                 Zeng in return for a lighter sentence, insisting that
and colleagues Tang Huanxing and Zhu Xiaomei          “extreme” behaviour. Former PWC staff member                       PWC’s role was vital because the government and
were detained without access to lawyers before        Meng Han was convicted the following month for                     ACFTU let workers down.
being found guilty in September 2016 of “ignoring     “gathering crowds to disrupt public order.”2 He
national laws and organising mass gatherings that     had been detained beyond the legally permitted                     1 Hong Kong Free Press, 27 September 2016.
disturbed social order.” 1                            time, and his parents had been harassed at their                   2 Lai 2016.

                                                                                                                                                                                     26
MADE IN …
INDIA

Globally, India is the largest producer of cotton      Similarly, the Better Cotton Initiative has been
and has the largest land area under cotton             improving production in ten states in India since
                                                       2009. This improved the livelihoods of 270,000
cultivation, accounting for around 26% of              BCI farmers in the 2014 harvest.3 BCI also partners

                                                                                                                                                                       Photo credit: © Fairtrade Photographer: Didier
cotton production and a quarter of all cotton-         ginners and spinners, strengthening traceability
producing land. However, 90% of Indian cotton          and standards at the inputs stage of apparel

                                                                                                                                                                       Gentilhomme, used with permission.
                                                       production.
is genetically modified, which means that the
seed costs farmers more to buy and are not             Empowering cotton farmers is also good for
                                                       the environment, as these communities have an
reusable.1 India is also a hotspot for human           interest in refining farming techniques in order to
trafficking and forced labour. Much of this            increase yields. Methods that maintain and care
takes the form of bonded labour in all stages          for the land — for example, by reducing the use of
                                                       pesticides and other chemicals — mean that it will
of garment production.
                                                       continue to serve families for generations to come.
                                                                                                              Women harvesting cotton at a Chetna Organic farm.
Fairtrade and Better Cotton Farms                      Human trafficking and forced labour
Given India’s prominent place in global cotton         Modern-day slavery is a reality despite being          Human trafficking and forced labour — including
production and the prevalence of genetically           outlawed in almost all countries. The ILO estimate     child prostitution and forced marriage — are illegal
modified cotton in the country, the work of            that 21 million are subject to forced labour, with     but enforcement is still problematic. Forced labour
Fairtrade and the Better Cotton Initiative (BCI)       some estimates suggesting up to 40% of victims         is outlawed in the Constitution but curiously not
is of particular significance.                         are in India.4 There are even generations of           covered in the regulation of human trafficking
                                                       workers born into bonded labour, never knowing         under the national penal code.
Fairtrade certification provides direct traceability
from cotton farms through to factories because         life outside the factory. Owners create a situation    India has ratified four of the International Labour
member farmers then sell to member spinners            whereby the worker repays a debt by performing         Organisation’s eight fundamental conventions, but
and ginners, and so on. This transparency in           labour — however the interest is set at extortionary   is yet to ratify conventions relating to child labour,
the supply chain, when paired with the worker          rates so that the worker is essentially held as a      freedom of association and collective bargaining,
empowerment that Fairtrade standards promote,          slave, spending their lives repaying the debt.         living wage, occupational health and safety,
is effecting real change for cotton farmers in         The fact that 75% of India’s rural workers and 69%     working hours, social security or migrant workers.
Gujarat, Tamil Nadu, Andhra Pradesh, Orissa, and       of its urban workers are in the informal economy
Karnataka. Fairtrade’s work with Chetna Organic        exacerbates their vulnerability. Other factors         1   Better Cotton Initiative; Vachharajani 2016.
is directly benefitting 80,000 Indian farmers,         increasing the risk of slavery are embedded caste,     2   Nath 2016.
                                                                                                              3   Better Cotton Initiative.
including 6,000 cotton farmers.2                       gender, and socio-economic inequalities.5              4   International Labour Organization
                                                                                                              5   Global Slavery Index.

                                                                                                                                                                           27
MADE IN …
INDIA

PADMA BAI’S STORY:
Transforming her community
through Fairtrade
Padma Bai is challenging socio-cultural norms
with her agricultural leadership. A tribal Girijan
farmer, she was elected sarpanch (statutory
village head) of eight villages that are home to
more than 2,000 Fairtrade farmers. Padma Bai
herself cultivates cotton, red gram, black gram,
castor and soya on her three acres of family
land in Patelguda Village in the Telangana
province of India.

                                                                                                                                                               Photo credit: Devina Singh.
This extraordinary woman has used her positions
of influence to transform her community and
empower her people. She built cement roads in
three villages and one fair weather road with dry
mud using Fairtrade Premium Funds. She arranged
for the government to make ponds for rainwater
harvesting and made clean water available in the     Padma Bai and her husband.
village school through a water pump.
She has been a member of Chetna Organics, a          as pick-axes, sickle, spades, hoes and                good things to say about his wife’s achievements.
Fairtrade certified producer organisation in India   wheelbarrows. The centre then hires out these         “Women can influence laws better,” he says. “I’m
since 2007. Her relationship with Chetna made it     tools to farmers in neighbouring villages. For poor   very proud of her.”
possible for her to secure a Rs. 30,000 loan from    farmers who cannot afford to buy their own tools      Many Australian Fairtrade companies source their
the Fairtrade Premiums Committee. Using these        the marginal rate of 2–5 rupees per day equips        products from Chetna Organic’s cooperatives.
funds, Padma Bai established Exacuniverse, a         them with the resources they need to effectively      Those included in our report are: Etiko, Kowtow,
equipment hiring centre.                             cultivate their land.                                 Liminal and Mighty Good Undies.
Under the guidance of Chetna Organics, her           Her husband Atram Rajeshwar works as a field
venture invests in labour reducing tools such        assistant at Chetna Organics and he only has

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