The Growing Concern of Social Protection in the Garment and Textile Sector

Liz Umlas 

December 13, 2021

COVID-19 has laid bare many things in the past 20 months. One of them is the extreme vulnerability of millions of supply chain workers around the world, due in part to the lack of functioning social protection systems in production countries. Social protection is a broad category encompassing, for example, social security, severance, sick pay, unemployment and disability insurance and other protective measures for workers.

Social protection is also an internationally recognized human right, and is fundamental to a stable and equitable workforce. When governments imposed lockdowns and shut down commerce to slow the spread of the virus, one consequence was that numerous retail clothing brands cancelled orders with their suppliers or refused to pay for goods already produced, sometimes claiming force majeure as the reason. The result has been widespread non-payment of wages to garment and textile workers, many of whom already lead a precarious existence, toiling for long hours in jobs that are often very poorly paid. The lack of social protection for these workers made a bad situation dire. As one NGO report put it:

“Since the industry’s chronically low wages left most garment workers with no savings on the eve of the crisis and since most governments in apparel exporting countries provide little or no unemployment benefits, the only thing standing between an out-of-work garment worker and immediate poverty for her family are the legally mandated severance benefits that most garment workers are due upon termination.”[1]

The same NGO found, however, that even where social protection measures such as severance were required by law, many workers received only partial benefits, or none at all.[2] The Clean Clothes Campaign has claimed that millions of garment workers have been denied full wages or severance payments during COVID-19. And this, while multiple brands have returned to profitability during the pandemic.[3]

Another thing that COVID-19 revealed, and exacerbated, was the dysfunctionality of the garment supply chain: poor working conditions disproportionately affecting women and people of color; large brands’ unfair purchasing practices and their negative impact on manufacturers and workers alike; and systemic problems in manufacturing supply chains that predated the pandemic.

In April 2020, the International Labor Organization (ILO) put out a COVID-19 “Call to Action” for the global garment industry in response to the pandemic’s profound impacts on the sector and on workers’ lives and livelihoods. A major demand is the establishment of durable social protection systems “for a more just and resilient garment industry”; in other words, beyond being a human rights issue, social protection is fundamental to the survival and thriving of the garment and textile sector.

The Call to Action underscores that multiple actors will have to come together in this work, including governments, international organizations, banks and other finance institutions, brands, retailers, e-commerce, manufacturers, employers’ organizations and trade unions. A number of brands have endorsed the Call, but it remains voluntary. For this reason, IndustriALL Global Union and its affiliates will seek to bring brands to the table to negotiate an international, enforceable agreement on social protection.

Anticipating some of the questions that might arise:

 

Social protection is a state function; why involve the private sector?

Buyer brands reap significant benefits from sourcing their product from low-wage countries; their suppliers and supply chain workers bear much of the risk of globalized production. In some cases brands are also causing or exacerbating worker rights abuses in their supply chains through their business models and purchasing practices.[4] With these impacts and benefits come responsibilities, and as the widely accepted UN Guiding Principles have affirmed, companies causing or contributing to adverse human rights impacts must remedy, or contribute to the remedy of, these harms. While the ultimate aim of this initiative is not the privatization of social protection – it is for states to build and maintain sustainable social protection systems – brands will be expected to contribute to a bridging fund to fill the current gap.

 

Why the garment and textile sector?

It’s true that no sector has been left untouched by the pandemic, and the right to social protection applies to all workers. But as the Call to Action points out, “While the pandemic and resulting economic crisis are global phenomena, the speed and scale of the economic impacts felt in the garment sector reveal the fragility of its businesses and jobs.” 

In addition, the garment sector is already the site of innovation in industrial relations. The Bangladesh Accord on Fire and Building Safety (2013-2021), a legally binding agreement spearheaded by the global unions IndustriALL and UNI, and signed by over 200 apparel brands, retailers and importers, changed the landscape of garment production in Bangladesh. The Accord showed it was possible to hold brands legally liable for human rights impacts in their supply chains, incorporating key elements such as binding arbitration, transparent reporting, workers’ rights education and independent factory inspections.

The Bangladesh Accord was replaced recently by the International Accord for Health and Safety in the Textile and Garment Industry, which aims to extend those gains to other countries. It is logical therefore that the garment and textile sector serve as a pilot for the social protection work, which seeks to implant deep-rooted and positive change into supply chain production. And it is the International Accord’s model – binding on signatories, with funds put aside and a Secretariat leading the initiative – that will be the model for the social protection initiative.

 

Why should companies care about social protection?

As the Call to Action observes, it is not just about getting the garment industry back on its feet: it is about building resilient social protection systems to ensure that future crises will not throw millions of workers into dire poverty once again. This should be a goal not just for the garment sector, but for all sectors. Lurching from one crisis to another, and perpetuating a dysfunctional supply chain model, is not in anyone’s interests, including companies whose profits are integrally tied to production outsourcing. The risks of continuing business as usual will fall not only on workers but also on host countries and brands. Where social protection is missing or poorly regulated, future crises (and there will be more) could again lead to wage theft, social disruption and a replay of the recriminations against brands for not paying workers.

What is more, as laws emerge around mandatory human rights due diligence, such as in France and Germany, companies will come under increased scrutiny for negative impacts associated with their supply chains, and in some cases could be subject to legal liability. In contributing to a universal social protection fund, buyer brands will be part of a collective solution to a systemic risk that no individual company can solve on its own.  

 

Liz Umlas is a senior fellow at Croatan Institute and a senior advisor to IndustriALL Global Union.

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[1] Worker Rights Consortium, “Fired, then Robbed: Fashion brands’ complicity in wage theft during COVID-19”, April 2021, https://www.workersrights.org/research-report/fired-then-robbed-fashion-brands-complicity-in-wage-theft-during-covid-19/

[2] Ibid.  

[3] See, for ex., Business & Human Rights Resource Centre, “Wage Theft and Pandemic Profits: The right to a living wage for garment workers”, March 2021, https://www.business-humanrights.org/en/from-us/briefings/wage-theft-and-pandemic-profits-the-right-to-a-living-wage-for-garment-workers/

[4] Clean Clothes Campaign found that workers in the supply chains of major brands had been pushed “to the breaking point” during COVID, and brands were “not doing enough to protect workers from the financial impact” of the crisis despite having contributed to workers’ financial plight by cancelling or delaying payments and not committing to wage assurance during the pandemic. Clean Clothes Campaign, “Breaking Point: Wage theft, violence and excessive workloads are pushing garment workers to break point during the pandemic”, June 2021 https://cleanclothes.org/file-repository/breakingpoint_report__layout-3.pdf/view

Feature image credit: Remy Gieling