Maryknoll Office for Global Concerns

Representing Maryknoll Fathers & Brothers, Maryknoll Sisters, and Maryknoll Lay Missioners
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Investors call for reforms in apparel supply chains

The following article was published in the July-August 2013 NewsNotes.

In light of a series of calamities in Bangladeshi apparel manufacturing plants that resulted in an overwhelming loss of life, over 200 institutional investors (including the Maryknoll Sisters and the Maryknoll Fathers and Brothers), representing over $2 trillion in assets under management, issued a statement on May 16, calling on apparel industry leaders to implement systemic reforms that will ensure worker safety and welfare, and to adopt "zero tolerance" polices on global supply chain issues. Cathy Rowan wrote the following article.

The statement was drafted by the Interfaith Center on Corporate Responsibility (ICCR) along with Boston Common Asset Management, Domini Social Investments, the Oblates of Mary Immaculate and Trillium Asset Management. It was sent to U.S. apparel manufacturers and retailers that ICCR has engaged on supply chain issues for many years.

The statement notes that the current model of apparel manufacturing "which assures global customers will have a ready supply of inexpensive and up-to-the-minute fashion, incentivizes corruption and lax oversight as low-cost producing nations compete in a race to the bottom for garment manufacturing contracts. Local governments can turn a blind eye to audit irregularities in an attempt to attract investment to their struggling economies. Global companies have seen their valuable brands put at risk by a shell game that makes oversight near-impossible, as local suppliers move manufacturing to unsafe factories without their clients’ knowledge. Caught in the middle are poor and largely unskilled factory workers with no recourse but to risk their lives by continuing to report for work every day in factories they know to be hazardous, only to earn a wage considered indecent by any international standard. Clearly, the current model is broken.

"We call on brands and retailers to collectively pledge to implement the internationally recognized core labor standards of the International Labor Organization. Further, we expect companies to acknowledge their human rights responsibilities as delineated in the ‘protect, respect and remedy’ framework of the UN Guiding Principles on Business and Human Rights. These principles affirm the duty of governments to protect the human rights of their citizenry and the responsibility of companies to respect human rights regardless of where they do business, and further, to provide remedy in the case of human rights abuse."

In response to the Bangladesh tragedies, five U.S. and Canadian apparel and retail trade associations announced a "Safer Factories Initiative" that would not require a legal standard but would take a flexible approach "to address a broad array of worker safety issues" and that would enable "brands and retailers to respond swiftly and effectively to an ever-changing environment."

This approach is not satisfactory to ICCR or to the other organizations that signed the May 16 statement. On June 6, the same organizations publicly called on apparel brands and retailers to endorse the Accord on Fire and Building Safety in Bangladesh.

The Accord, which was developed in 2012, focuses on expanding workers’ rights and building safety standards. It represents a multi-stakeholder approach to resolving worker safety issues and includes the participation of both unions and civil society organizations advocating on behalf of workers. Over 40 global brands and retailers, such as PVH (parent company of Calvin Klein and Tommy Hilfiger), H&M and Abercrombie & Fitch have already adopted and begun work on the Accord.

Acknowledging the urgent need to implement legally binding and internationally accepted protocols to protect apparel workers in Bangladesh, the investor coalition believes the Accord offers the best path forward. They are concerned that the Safer Factory Initiative: "1) Could divide the industry and dilute the impact of a systemic solution that puts worker safety first; 2) Appears to be voluntary and may not be legally enforceable; 3) Lacks adequate representation by unions and civil society that is necessary to ensure worker safety and worker rights; 4) Does not compel companies to fully disclose all suppliers throughout their supply chains."

The investor coalition calls on "all apparel brands and retailers to join together quickly to find solutions that will prevent catastrophes … from recurring. This new North American initiative will take time to develop while the Accord is already in place. The onus rests with the members of this new initiative to provide compelling justification for not signing the Accord, which commands strong international support from global companies, civil society and the International Labor Organization. We urge all companies to adopt the Accord and work towards a common framework for the industry."