Australian fashion retailers have supply chains that risk exploitation, audit finds

http://www.theguardian.com/australia-news/2015/apr/16/australian-fashion-retailers-risk-exploitation

Version 0 of 1.

Australian fashion companies lack transparency around their supply chain or do not have full knowledge of where their raw materials are being sourced from, leaving workers including children at risk of exploitation, an audit has found.

The second Australian Fashion Report, to be released on Friday, evaluated 59 clothing companies and graded them on the ethics of their supply chain from the sourcing of raw materials, predominately cotton harvesting, through to final manufacturing.

The researchers found only 9% of companies surveyed could demonstrate they were paying their overseas workers a wage they could live off, and the same amount had traced their supply process down to their raw materials.

Only 10% of companies regularly conducted unannounced audits to ensure standards were being met at factories.

Lead researcher on the audit and advocacy manager from Baptist World Aid, Gershon Nimbalker, said Australian brands such as Just Group, which owns Just Jeans, Jay Jays, Peter Alexander and Portmans, received a low grade, as did Best & Less and Lowes, for failing to demonstrate they were protecting their overseas workers.

Nimbalker said all of the companies were assessed based on publicly available information, such as ethics and corporate responsibility statements, and then were contacted multiple times to expand on those policies and answer a set of 61 questions about their policies and practices at each level of their supply chains.

“For these companies, we could see no information about what they were doing in respect to ensuring fair conditions for overseas workers and there was a real lack of transparency,” he said.

“We’ve tried to engage Just Group, for example, for a really long time and we have found them to be one of the hardest companies to get answers from about their supply chain process.”

Just Group and Lowes did not respond to a request for comment from Guardian Australia.

The head of brand and marketing at Best & Less, Jee Moon, said the low rating given to the company by the audit was not a fair reflection.

Best & Less had not engaged with the researchers because it was a small company without the resources to answer the questions, Moon said.

“In fact at the time of the survey we had staff members out in the field in Bangladesh actioning our ethical sourcing code, as opposed to just talking about it,” she said.

“We commission third party auditors to go to these factories every quarter, and we also visit them ourselves. In Bangladesh we have only six suppliers who collectively have 15 factories, and we look at each of the factories ourselves and ensure safe and fair working conditions.”

The company only worked with companies that complied with wage standards, she said. Moon said Best & Less would take part in the research when it was next conducted.

It was important for fashion brands to demonstrate their materials were being obtained ethically and that working conditions were being maintained, the report said, with April marking two years since the 2013 Rana Plaza factory collapse in Bangladesh which saw more than 1,100 workers killed.

In India, recruiters targeted young girls in particular, often promising them education, accommodation and fair pay, only to force them into harsh child labour and subject them to sexual abuse, the report said, while in Uzbekistan, the world’s fifth largest exporter of cotton, forces up to one million people to work in the cotton fields every year, including children as young as 10.

However, the report also found some Australian companies had improved their standards drastically since Baptist World Aid released its first report on the fashion industry in 2013.

Kmart and Cotton On had significantly improved their traceability of suppliers, while Country Road and the Sussan Group had improved worker wages overseas.

Corporate governance researcher with the University of Technology in Sydney and a researcher with the thinktank Catalyst Australia, Martijn Boersma, said buying from an Australian company did not guarantee an ethical supply chain.

“The real issue is the actual country of origin they’re sourcing from, and the kinds of regulations in place there,” he said.

“For Australia, the bulk of our imports come from the Asia-Pacific region where it is estimated 78 million children are involved in child labour. The deeper supply chains are, the more difficult it is for them to be monitored.”

But the complexity of some supply chains was not an excuse for a lack of transparency or strong ethical standards and monitoring, Boersma said.

“It’s never an excuse, and since most of the companies make a good profit if anything, they should use the influence they have in supply chains to put better standards in place.

“Even though consumers may want items cheap, they don’t want a product sourced as a consequence of abusive labour.”