Most companies have codes of conduct (some better than others) which outline a minimum standard for working conditions; the better companies also employ staff to monitor this code. So why do we still see so many abuses of workers’ rights? The answer comes down, in part, to how serious companies are about their codes of conduct and how much effort they put into enforcing their code. More significant, however, are the purchasing practices of the companies themselves. Let's look at some examples.

1. Low prices

“We have to work overtime until 11pm or midnight everyday. The price they pay us per piece is so low there is no point in us working such long hours…Some of us don’t even have enough money to spend on food. It’s more than we can bear.”

Brands and retailers place suppliers in ferocious competition for orders, obliging them to try constantly to outbid each other, particularly on price. A Honduran sportswear manufacturer interviewed for the Play Fair at the Olympics campaign reported a 23% fall in prices over the past three years. Low prices don’t just prevent suppliers being able to pay their workers a living wage, they also have a detrimental effect on other basic rights such as sick or maternity leave, health and safety, reasonable working hours and the right to organise . Were companies to factor a living wage into their purchasing decisions they would soon be faced with the fact that they need to pay more if they are serious about respect for workers’ rights on the ground.

2. Unstable relationships with suppliers

“I wish that there was a system of compliance the other way round, that is to say: (a) buyers don’t relocate orders to other suppliers based on a 5 to 10 percent difference in price unit; and (b) loyalty should be a two-way process – if suppliers are compliant and open to meeting labour standards, then we should receive consistent orders”

Power in garment supply chains is concentrated with the buyers, since they are few and subcontractors are many. Rather than using this power to work with suppliers to improve working conditions in the security of a long term-relationship, buyers operate a divide and rule policy. Suppliers are pit against each other, sometimes in real time over the internet, using ‘reverse auctions’ to drive down prices.
Insecure relationships create more difficulties than just price. They lead to a ‘feast or famine’ pattern of work, with gluts of order at some points and lack of orders at others. This makes it impossible for factories to plan orders in a way that workloads steady. There is little incentive for suppliers to invest money in complying with code of conduct requirements if a company is only their a short space of time and reduces the possibility of collaboration between supplier and retailer on the implementation of workers rights.

3. Lead times

“The usual target is a thousand pieces per lane, per day. But during export days the target doubles to two thousand pieces. This doubling is very stressful for us and we often can’t reach it. When we don’t reach it, we get yelled at by the management and sometimes we get warning letters.”

Short lead times (between order and delivery) are the result of ‘just in time’ techniques to reduce storage costs, a sector driven by short-term fads, production that follows emerging trends, and a lack of advance planning on the part of buyers. Once shipping and packaging times are factored out turnaround times on orders can be unfeasibly short, so workers end up performing overnight shifts with minimal breaks just to meet orders.

With such short lead times and precise deadlines, factory owners are unable to arrange an even supply of work. Lead times are another practice driven by competition, forcing supp-liers into a game of ‘chicken’ to secure orders, leading to a greater reliance on subcontractors, temporary workers and home workers and contributing to an increasing insecurity of work.

What can be done?

Companies need to change their ways of doing business if they are serious about improving conditions along their supply chains. Making demands on suppliers to pay living wages, reduce overtime, improve working condition and support worker organising whilst at the same time demanding lower prices, shorter lead times and refusing to commit to long term supplier relationships is just a different way of refusing to take responsibility.

It is difficult to make such a turnaround on a company-by-company basis. No company wants to lose its perceived competitive advantage, or to be the first to try new ways of doing things. This is why Labour Behind the Label and its partners are pushing for companies to work together to develop new and better purchasing practices.

Governments also have a role: ultimately it is only through legislation on corporate responsibility that clothing companies will be held accountable for their buying practices. Only then will they stop dragging their feet and take responsibility for their part in creating conditions for the abuse of workers’ rights.

Finally there is a role for consumers in pushing companies to take a more considered approach to buying, this pressure needs to be maintained. Consumers also have to understand the impact that short seasons and the demand for a constantly changing cheap supply of clothes may have. Companies need to know that while they might be prepared to ignore the impact of their companies purchasing practices, the rest of us won’t be so easily fooled.

Adapted from an article in LBL Bulletin 24.