Annual Report 2018 6 We’Re on the Right Track 7

We’re on Annual Report the 2018 right track Imprint Contents

Published by We’re on the right track �� 5 Partnership for Sustainable Textiles Foreword �� 5 c/o Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Portrait – Systematically working together �� 8 Friedrich-Ebert-Allee 36 Members 53113 Bonn, Germany Steering Committee T +49 228 4460 3560 Partnership Secretariat E [email protected] Projects I www.textilbuendnis.com/en/ The Textiles Partnership in the media

Editing Pillar 1 – Individual responsibility ��21 Secretariat of the Partnership for Sustainable Textiles Review – Improving year on year �� 22 Principles of the review process Image credits Review allows us to look at individual and aggregated performance © Page 11 Andreas Lemke Companies in the Partnership �� 27 © Page 11 Andreas Lemke Other stakeholder groups’ results ��35 © Page 39 Textiles Partnership / Partnership Secretariat There’s always next review © Page 42 Textiles Partnership / Partnership Secretariat © Page 49 Textiles Partnership / Partnership Secretariat Pillar 2 – Collective engagement ��41 © Page 51 Textiles Partnership / Partnership Secretariat Collective engagement – Making a big difference on the ground �� 42 © Page 55 Textiles Partnership / M. Schmid The Partnership Initiatives in brief © Page 56 Textiles Partnership / M. Schmid © Page 58 F. Zach Pillar 3 – Mutual support �� 47 © Page 63 Markus Pfaff / Shutterstock Support services – a platform for learning and dialogue �� 48

Illustrations Priority areas in 2018 – activities in the spotlight �� 53 G. Ostrowska-Henschel Tamil Nadu Partnership Initiative – Knowledge creates change �� 54 Living wages – ‘The question is not whether but how’ �� 58 As at International cooperations – A bigger lever for a broader impact �� 62 October 2018 … A BIG We’re on the right track 5 STEP

FORWARD. Foreword

Dear Partnership members, dear readers,

We can now look back on four years of intensive work in the Partnership and on the second year of joint implementation. The Partnership has laid the foundations for members to work towards the Partnership’s goals in a structured manner by addressing issues within the three pillars: individual responsibility, collective engagement and mutual support. Bearing this implementation structure in mind, in this report we want to highlight a few key facets of the Partnership’s work over the past year and take a look at our plans for the coming twelve months.

Last year, we laid the principal foundations for implementing the Partnership’s goals. This year, the Partnership has focused on exploring central issues and developing solutions in expert groups. Nine expert groups are working on a variety of specialist issues – ranging from supporting and refining the review process, wastewater standards and impact assessment to natural fibres and supply chain transparency. Preparing for Steering Committee decisions is an important task for these groups. They also develop specific proposals for implementation of Part- nership Initiatives, together with information and support services for members. Annual Report 2018 6 We’re on the right track 7

The review process represented a stiff challenge for the members, the Partnership relevant organisations and initiatives, unlock synergies and take action together, Secretariat and the Steering Committee again this year. Extensive modifications wherever possible. To this end, the Partnership forged strategic cooperation to the process after the first run-through last year have already borne fruit. We agreements with an array of initiatives last year, including the Dutch Agreement have simplified the process and clearly oriented it to OECD recommendations on Sustainable Garments and Textile, the Sustainable Apparel Coalition (SAC), and stipulations in the National Action Plan on Business and Human Rights. In Action Collaboration Transformation (ACT) and the Fair Wear Foundation. We addition, the main industry standards and initiatives can now be found in the are constantly reviewing additional strategic cooperation agreements. We aim to online Textiles Partnership Performance Tool (TexPerT), reducing the workload. reduce the burden on Partnership members by offering associate memberships We will also refine the review process for next year in order to enhance the and accrediting activities as part of other initiatives. The goal is to strengthen benefits, make it easier for members to participate and bring requirements into the effects of our joint actions in supply chains within the parameters of our line with those on the international stage. This process is a central instrument partnerships. for members to work towards targets in a structured manner and is evidence that members are meeting their due diligence obligations and jointly defined We all have the vision to make demonstrable, significant improvements within requirements. Public interest in roadmaps and progress reports shows that the textile supply chains through the Partnership. We are convinced that we now have review process has proven significant for the public image and credibility of the a set of instruments and a cooperation network that make this vision a reality in Partnership and its members. a structured and effective manner. We set out as a multi-stakeholder partnership and can now report the first results in this, the second year of implementation. Together with you we want to make further progress and do even more to ensure We want to work with you to fair working conditions and environmental protection in the textiles industry. We do much more to ensure fair look forward to continuing to work together in the Partnership! working conditions and protect our environment.

After a challenging start, activities are also picking up steam in our second pillar, collective engagement, within the scope of Partnership Initiatives. Two ongoing Dr. Gisela Burckhardt Dr. Torsten Christen Michael Krake Dr. Sabine Ferenschild initiatives are helping to make the textile industry more sustainable in producing countries. In the first initiative, Partnership members are working together to improve working conditions for textile workers in the southern Indian state of Tamil Nadu. The second initiative is advancing chemical and environmental management in several Asian countries. Other initiatives are to follow: a Partnership Initiative on living wages is already in the starting blocks. We have decided to Stefan Genth Berndt Hinzmann Nico Kemmler Claudia Kersten make it easier for members to set up and take the first steps in initiatives in an effort to strengthen member participation and launch initiatives more quickly. We will work hard to make further improvements in this area, but are also relying on you, our members, to put forward ideas that we can take to the next level and implement together. Dr. Uwe Mazura Dr. Johannes Merck Ingo Strube Frank Zach We have established the Partnership even more firmly as a platform for stakeholders to exchange experiences, information, learning and dialogue with active support from many members. We reorganised our Members’ Area to this end. We also organised a large number of webinars and informational events, together with the first two-day working meeting. We want to continue on this course and, by doing so, support you in your everyday work. Dr. Jürgen Janssen

The Partnership acts as a national initiative in an international environment. Therefore, it is especially important for us that we work together closely with Annual Report 2018 8 We’re on the right track 9

The Partnership’s work has been structured into three synchronised areas of action to meet the stated objectives.

Within the scope of their individual responsibility (the review process), all members work towards voluntary and mandatory targets that they back with specific activities. 1 These plans of action and the progress they make are published after an external check. Partnership members make demonstrable contributions to improving environmental and social conditions within textile supply chains in keeping with the Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector, which is garnering increasing recog- nition on the international stage (see also page 21 – Individual responsibility).

Collective engagement by members within the parameters of Partnership Initi- Portrait atives in producing countries is the second pillar of the Partnership’s work. The 2 specific issues addressed by Partnership Initiatives will focus more and more on mandatory targets for the review process in the future. Since these broad-based Partner- ship Initiatives aim to tackle structural challenges in producing countries, cooperation with partners on the ground and with strategic international partners is a key criterion for Systematically success (see also page 41 – Collective engagement). Building knowledge, intensive dialogue with one another and mutual support are essential for members to shoulder their individual responsibility and to engage col- 3 lectively and effectively. The Partnership thus sees itself as an information platform and knowledge network to which each member should contribute its individual networks, working its knowledge and its experience (see also page 47 – Mutual support). together Improvements along the entire supply chain

The Partnership for Sustainable Textiles is a multi-stakeholder partnership made up of companies, associations, the German Government, trade 1 2 3 unions, standards organisations and non-governmental organisations (NGOs). The Partnership was founded in October 2014 at the initiative of German Development Minister, Dr Gerd Müller, in response to fatal INDIVIDUAL COLLECTIVE MUTUAL accidents at textile factories in Bangladesh and Pakistan. Members have RESPONSIBILITY ENGAGEMENT SUPPORT since worked together to make demonstrable, continuous improvements to social, environmental and economic conditions along the textile and garment sector’s entire supply chain. Today, Partnership members represent around half of turnover within the German textiles market. The goal is to reach 75% market coverage.

(INTERNATIONAL) COOPERATIONS

Partnership Secretariat Annual Report 2018 10 11

Members

Exchanging experiences and networking within the Partnership The Textiles Partnership presently counts 129 members, with companies mak- With its heterogeneous member structure, the Textiles Partnership has set itself ing up the majority (63%) (as at October 2018). The other third is split between ambitious goals relating to the key challenges within textile supply chains. Struc- non-governmental organisations (14%), associations (11%), standards organisa- tures and processes must facilitate effective decision-making and targeted action. tions (5%), advisory members (5%), the German Government and trade unions For this to happen, broad participation by and information for members and a (2%). These stakeholder groups are also represented in the Steering Committee. suitable cooperation structure are needed. The Partnership has two bodies that The Partnership’s number of members fluctuates. For example, the Partnership come into play here: the Steering Committee and the Members’ Meeting. It also has welcomed seven new members since the start of 2018. However, not all has a supporting structure, the Partnership Secretariat, and project and expert members that have joined the Partnership for Sustainable Textiles since 2014 groups that also work on the Partnership’s individual issues in depth. (This have stayed in the Partnership. A total of 27 members have left the Partnership structure and duties are described in detail in the Cooperation Rules: www.tex- of their own volition or have been excluded in 2018. tilbuendnis.com/en/new-structures-new-rules/.)

2017 Members’ Meeting 14 Associations

1 German Government

18 Non-governmental organisations (NGOs)

6 Standards 129 81 Companies organisations MEMBERS

2 Trade unions

7 Advisory members Annual Report 2018 12 We’re on the right track 13

STEERING COMMITTEE

Steering Committee

The Steering Committee is the Textiles Partnership’s key decision-making body and is elected by members every two years. Each stakeholder group delegates its own representative(s) to the Steering Committee. The Steering Committee Stefan Genth Nico Kemmler Dr. Uwe Mazura Dr. Johannes adopts decisions at regular meetings based on substantive preliminary work Handelsverband Textilkontor Walter Confederation of Merck carried out by expert groups. Deutschland Seidensticker GmbH the German Textile Otto GmbH & Co KG (HDE e.V.) & Co. KG and Fashion Industry (t&m)

Members’ Meeting

The Members’ Meeting serves as a forum to share lessons learned and the results Dr. Gisela Dr. Sabine Berndt Frank Zach of the Textiles Partnership’s activities, receives the Steering Committee’s annual Burckhardt Ferenschild Hinzmann German Trade Union report and can make a number of fundamental decisions about the Partnership. FEMNET e.V. SÜDWIND e.V. – INKOTA- netzwerk e.V. Confederation (DGB) Institut für Ökono mie und Ökumene

Partnership Secretariat

Claudia Kersten Michael Krake Dr. Torsten Ingo Strube The Partnership Secretariat provides members with technical and organisational Global Organic Federal Ministry Christen Federal Ministry for support, supervises all processes within the Partnership and oversees the imple- Textile Standard for Economic Federal Ministry of the Environment, (GOTS) Cooperation and Nature Conservation, mentation and organisation of all project activities and Partnership Initiatives. This Labour and Social Development (BMZ) Affairs (BMAS) Building and Nuclear Secretariat is provided by the Deutsche Gesellschaft für Internationale Zusam- Safety (BMU) menarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). Annual Report 2018 14 We’re on the right track 15

Projects

By the end of 2017, the Textiles Partnership had six Working Groups, each with up to 100 Chemical Fibres ALDI International Services GmbH & members, which make preparations for Steering Committee decisions. The way that the Co. OHG (for ALDI SÜD Deutschland), Partnership works changed this year after new structures and tasks for the Partnership’s Bremer Baumwollbörse, Dibella This new project focuses on regenerated fibres, synthetic work were agreed upon last year. Stakeholders now work on topics and specific work orders b.v., Esprit Europe Services GmbH, chemical fibres and bio-based plastics. Its tasks include Confederation of the German Textile and from the Steering Committee in a focused way within an individual project structure. A Fashion Industry (t&m), Hej Support, agreeing on a definition of what best available chemical specific project plan governing the specific task, the composition of the project’s expert group Hohenstein, Internationaler Verband fibres are, an understanding on sustainability aspects that and the timetable provides the foundation and is approved by the Steering Committee. The der Naturtextilwirtschaft e.V. (IVN), KiK are important in using best available chemical fibres and

Textilien und Non-Food GmbH, Stiftung following projects are currently under way: OEKO-TEX GmbH, Ökopol, Primark identifying potential for individual and collective engage- Limited, Sympatex Technologies GmbH, ment. TAKKO Holding GmbH, German Federal Environment Agency (UBA), Vaude

PROJECT PROJECT MEMBERS Sport GmbH & Co. KG, Stitching ZDHC Foundation (ZDHC) Wastewater Standards

This project is analysing wastewater standards, comparing ALDI International Services GmbH & them with the Partnership’s goals and reviewing the ability Co. OHG (for ALDI SÜD Deutschland), to roll them out. Based on these realisations, members will Bluesign, Esprit Europe Services GmbH, German Fashion/Industrieverband recommend one or more minimum standards for discharging Garne-Gewebe-Technische Textilien ALDI International Services GmbH & Co. wastewater from textile production into water bodies. This (IVGT), Hohenstein/Stiftung OEKO-TEX OHG (for ALDI SÜD Deutschland), BSD Consulting, German Federal Ministry of makes it easier for members to work towards a credible, GmbH, KiK Textilien und Non-Food GmbH, Lidl Stiftung Co. KG, PUMA SE, Labour and Social Affairs (BMAS), German applicable minimum standard and thus reduces environ- TAKKO Holding GmbH, German Federal Ministry for Economic Cooperation mental pollution in the long term. Federal Environment Agency (UBA), and Development (BMZ), Clean Clothes Living Wages Campaign Germany – Kampagne für PROJECT PROJECT MEMBERS Stitching ZDHC Foundation (ZDHC) Saubere Kleidung, German Trade Union Within the scope of this project, an expert group is pres- Confederation (DGB), Esprit Europe ently drawing up a proposal for a Partnership Initiative on Services GmbH, Fairtrade International, FEMNET E.V., Gerry Weber International Living Wages that is to commence in 2018. The goal is to AG, Confederation of the German Textile raise wages above the minimum wage, initially in two Asian and Fashion Industry (t&m), H&M Hennes countries. One particular aim is to support social dialogue on & Mauritz B.V. Co.KG, Handelsverband Complaint Mechanisms Deutschland (HDE), IG Metall, INKOTA- the ground. Moreover, the initiative is planning to improve netzwerk e.V., Institute of Development Promoting access to complaint mechanisms for (potentially) affected people companies’ sourcing and purchasing practices with a view to Research and Development Policy of is a key requirement for companies to meet their human rights due diligence raising wages. The Partnership Secretariat is currently devel- the Ruhr-University Bochum (IEE), KiK Textilien und Non-Food GmbH, MÖWE obligations. The Partnership has formulated a mandatory goal to this end, which oping a purchasing practices self-assessment tool, which will – The Institute for Mission, Ecumenical must be tackled in 2019. The project offers members assistance during practical be made available to members towards the year’s end. The Affairs and Global Responsibility of the implementation by providing support services and pointing out existing meth- online tool allows members to analyse and benchmark their Evangelical Church of Westphalia, NKD Services GmbH, NGO coordinator, Otto ods and possible actions. The group also serves to share lessons learned and to sourcing and purchasing practices and helps companies to GmbH & Co. KG, REWE Group, STIFTUNG network so that synergies among members on this issue can be leveraged and identify potential improvements in procurement. OEKOTEX GMBH, SÜDWIND e.V. – Institut activities can be pooled. für Ökonomie und Ökumene, TAKKO

PROJECT MEMBERS Holding GmbH, Tchibo GmbH, TransFair e.V. Annual Report 2018 16 We’re on the right track 17

PROJECT MEMBERS German Federal Ministry for Economic Preventing Corruption Natural Fibres Cooperation and Development (BMZ), European Business Ethics Network The project addressing the prevention of corruption is work- Founded as recently as September 2018, Aid by Trade Foundation / Cotton made Deutschland (DNWE), Hohenstein Institute, ing on mainstreaming this issue in the Partnership’s ques- the Sustainable Natural Fibres expert in Africa, Bremen Cotton Exchange, KiK Textilien und Non-Food GmbH, German Federal Environment Agency, Stiftung OEKO-TEX GmbH, s.Oliver Bernd tion grid and TexPerT and on developing informational and group is continuing to work on the topics Confederation of the German Textile Freier GmbH & Co. KG, Transparency support services for specific corruption prevention measures. addressed by the Natural Fibres Working and Fashion Industry (t&m), Global International Deutschland e.V. Group with a focus on cotton and new Standard gemeinnützige GmbH (GOTS), Internationaler Verband der PROJECT MEMBERS wool. Ten members are jointly evaluat- Naturtextilwirtschaft e.V.(IVN), KiK ing the inventory of natural fibres and Textilien und Non-Food GmbH, s.Oliver reviewing progress and the achievement Bernd Freier GmbH & Co. KG, SÜDWIND e.V. – Institut für Ökonomie und of targets. Based upon this work, they are Ökumene, TransFair e.V. formulating additional requirements for sustainable cotton-growing and gathering ideas for support services for members Supply Chain Transparency and Partnership Initiatives.

Knowing one’s own supply chain is essential for identify- Aid by Trade Foundation, Foreign Trade ing and managing social and environmental risks. However, Association of German Retailers (AVE), German Federal Ministry for Economic practical implementation poses a considerable challenge for Cooperation and Development (BMZ), many companies. The group of experts is developing support FEMNET E.V., NGO coordinator, s.Oliver Bernd Freier GmbH & Co. KG

services for fulfilling the Partnership’s current requirements PROJECT MEMBERS and clarifies whether and which rules on this issue should be added to the review process. Impact assessment Federal Ministry for Economic Cooperation and Development (BMZ), The group of experts is presently elabo- Confederation of the German Textile rating an impact assessment plan for the PROJECT PROJECT MEMBERS and Fashion Industry (t&m), INKOTA- Partnership. The strategy will look at the PROJECT netzwerk e.V., NGO coordinator, Stiftung OEKO-TEX GmbH, Otto GmbH & Co. KG issue of impacts in a holistic manner and MEMBERS Member Recruitment and encompass all three of the Partnership’s pillars. It will look at members’ individual Aid by Trade Foundation, German Federal Public Relations Ministry for Economic Cooperation and impacts and the collective impact of joint Development (BMZ), Federal Ministry of This expert group is developing a strategy for proactive activities and of the Partnership. The final Justice and Consumer Protection (BMJV), member recruitment and public relations work by the Tex- strategy should contain recommendations Clean Clothes Campaign Germany – Kampagne für Saubere Kleidung, German tiles Partnership. The communications strategy was updated for action detailing the data that is needed Trade Union Confederation (DGB), and discussed with members as part of this process. The to assess impact and how this data can be German Retail Federation (Handelsverband group is developing messages, materials and measures that collected. Deutschland – HDE), KiK Textilien und Non-Food GmbH, NGO coordinator cast the spotlight on the added value of Partnership membership, which members can use in their own communications and which can help to recruit members. Annual Report 2018 18 We’re on the right track 19

«Getting opposing parties The Textiles like discount retailers and «Sustainable NGOs to sit down at fashion: The Textiles Partnership in the same table and having Partnership is the media them work together to develop measures for slowly gathering A total of 209 articles in the German and international media indicate that the clean manufacturing is a speed.» Partnership continues to attract public and media interest in the fourth year of Focus Online, 13 August 2018 its existence. An evaluation by the Partnership Secretariat found that the tenor quantum leap.» of media coverage was neutral with a slightly positive tendency. The three main Textil Wirtschaft, 24 August 2018 topics covered by the press this year were the new strategic cooperation agreement, especially with the Dutch Agreement on Sustainable Garments and Textile (AGT) and the Sustainable Apparel Coalition (SAC), the fifth anniversary of Rana Plaza and – gaining the most press attention – the launch of progress reports and roadmaps being published in August. «Textiles «Today’s good news: Partnership Progress towards greater sustainability planning hundreds Main terms used Cooperation with SAC Voluntary measures Difficulties can be reviewed by of specific in media reporting facing SMEs Lack of legal regulations Cooperation with AGT everyone.» Withdrawals Roadmaps Commitment Progress measures.» WDR Cosmoradio, 13 August 2018

Transparency Mandatory minimum standards Deutschlandfunk, 14 August 2018 Partnership Initiatives Study Lack of specific measures 1,300 targets Slow progress Market coverage Documentation burden

«AFTER ALL, {THEY} ARE Evolution of media «Textiles INVOLVED IN THE TEXTILES interest in 2018 Partnership promises PARTNERSHIP IN THE FIRST greater PLACE. FROM A BUSINESS transparency ETHICS STANDPOINT, THEY and commit- BELONG TO THE BETTER ment.» HALF OF GERMANY’S TEXTILE Jan. Feb. March April May June July Aug. Sept. Umweltdialog, 14 August 2018 SECTOR...» Rather positive Rather neutral Rather critical TAZ, 22 August 2018 … ANDAnnual Report 2018 20 Individual responsibility 21 TAKING 1,000 STEPS IN

Pillar 1 THE RIGHT Individual DIRECTION responsibility Annual Report 2018 22 Individual responsibility 23

REVIEW

Under the due diligence concept, this year companies must systematically map their producers and business partners in a first stage and analyse the risks and Improving potential negative impacts of their own business activity. Using this as a basis, they can then work on improving conditions within the supply chain. Of course, members can set themselves additional goals going above and beyond these year on year minimum requirements. The underlying idea is to Upon joining the Partnership, all members commit to take part in the review process. This means that they submit and implement a roadmap each year and improve social, environmental account for their progress. Each member contributes towards improving social, environmental and economic conditions in textile production year on year. The and economic conditions in review process is central to the members’ individual commitment to shouldering responsibility for sustainability in their supply chain. One consequence of the textile production. process may be that they scrutinise and progressively change their core business practices.

Modifications to the 2018 review process and lessons learned by members in 2017 meant that roadmaps submitted this year were queried less often by auditors. On the other hand, there were still many questions and comments made during audits of Principles of the progress reports on areas such as documenting target achieve- The due diligence obligation for ment. Members were able to resolve these objections quickly in companies was first formalised in review process most cases by providing additional evidence and information. the UN Guiding Principles on Busi- ness and Human Rights. Under this This year was the second time that members went through the review process. concept, companies should put in A whole series of modifications were made based on the lessons learned during place appropriate processes and the first year of reporting. For example, the TexPerT tool was made more user- measures to prevent, mitigate and, friendly and flexible. The structure of the question grid, which provides the sub- Policy if necessary, make amends for the stantive basis for the review process, was also revised. It is now geared towards risks and potential negative effects OECD guidance on due diligence in the textile sector and is thus compatible with of their actions within their com- international rules and initiatives. Reporting and Identifying own pany and in the supply chain. Put- communications risks and results ting due diligence into practice is The Partnership also introduced mandatory targets for the first time this year. a continuous, long-term and indi- These targets must be gradually backed with specific activities in 2018, 2019 and vidual process for each company. 2020. The targets vary depending on the stakeholder group within the Partner- SECTOR-WIDE The Partnership rounds out this ship. For example, companies have to deal with core aspects of due diligence concept with sector-wide engage- COMMITMENT in their management processes and with implementing the Partnership’s social ment – the contribution that all and environmental requirements into their business processes. For their part, stakeholders make to supporting Complaints associations, non-governmental organisations and trade unions should help to Mainstreaming implementation of due diligence and remedies raise public awareness and provide additional support measures. and integration in companies.

Monitoring and evaluation Annual Report 2018 24 Individual responsibility 25

All roadmaps were published for the first time this year in keeping with the Members joining after the start of this year’s review process do not have to take members’ agreement on tiered transparency. Partnership members thus not part in the review process until next year. Advisory members are subject to a only subject themselves to evaluation by neutral, external auditors, but also by limited reporting requirement and specify their contributions using a standardised the public and the media. Media coverage largely praised their publication as a questionnaire, which is also published on the Partnership’s website. step in the right direction towards greater sustainability. All members’ audited progress reports will be published next year as well. About a quarter of members The roadmaps and progress reports show how each member is faring in embracing voluntarily published their progress report this year. due diligence and working towards the Partnership’s goals, and what progress the Partnership as a whole is making. This data and the overview of procurement markets (see below) can help to address activities in the Partnership in an even more targeted way in the future, for instance by launching Partnership Initia- tives. At the same time, it allows the general development of the industry to be examined, for instance in embracing the concept of due diligence. Review allows us to look at individual and aggregated performance

This year, a total of 115 members drew up a report detailing their contributions to improving social, environmental and economic conditions in textile supply chains. Nine new members among their ranks submitted a roadmap for the first time. All others were in the second round of reporting. In addition to their roadmap for 2018, they had to submit a progress report providing information about the extent to which they met last year’s targets. Procurement markets Members’ most important procurement countries based on average purchase volumes. Members were asked about their top three procurement markets.

Annual Annual Annual The Review Process report report report – an overview 2017 2018 2019 2% India PARTNERSHIP Question grid 2% Vietnam Bangladesh 39% MEMBER 5% Indonesia

9% Cambodia Report and Progress Define the demonstrate Baseline report baseline progress 13% Turkey Publication Implement Set individual Roadmap

targets targets audit Independent 30% China Annual Report 2018 26 Individual responsibility 27

1,300 steps towards Companies in greater sustainability the Partnership Altogether, the Textiles Partnership’s members defined more than 1,300 measures to implement the Partnership’s goals this year. These 1,300 measures are helping to improve social and environmental conditions within the textile supply chain. Since companies make up the biggest membership contingent within the Textiles Partnership, they also draw up the most measures by some margin. Companies also face the most stringent requirements in the review process compared with other Members set stakeholder groups. Their business activities mean that they can directly influence themselves the supply chain and can apply the greatest leverage to improve manufacturing approximately 1,300 1100 targets in 2018 conditions. The review process asks companies to analyse their activities all the way along the road to performing due diligence and to set themselves goals to this end. Ø 13,6 The following analysis shows where Partnership members stand in embracing due 825 targets diligence and what goals they have set themselves.

550

BRANDS AND RETAILERS 275 Ø 7,1 MUST... targets 0 2018 2019 2020 Companies Non-companies Overarching targets

… have recognised and prioritised their risks and potential negative effects. The progress reports showed that members reached approximately 70% of their … have systematically recorded their business partners and producers. targets from last year. Members must explain why they missed targets and con- … have established a system for reviewing implementation of their tinue to work towards them this year. requirements in the supply chain on an ongoing basis. … have introduced a procedure for dealing with violations of their requirements by business partners and producers. … contribute to raising public awareness of sustainable textile production.

Outcome of the 1600 Chemical and Environmental Management progress reports: about two thirds of … have required their business partners and producers to comply targets were met with the Partnership’s MRSL (ZDHC as a minimum). 1200 … have required their producers and business partners to comply with a wastewater standard. … assist producers to make their business operations more compliant and environmentally friendly. 800 … increase the proportion of producers using ZDHC-compliant chemical products exclusively.

Sozialstandards und existenzsichernde Löhne 400 … ihre Produzenten und Geschäftspartner zur Einhaltung der sozialen Bündnisziele verpflichtet haben. … einen Prozess etabliert haben, der den Umgang mit Fällen von Kinder- und/oder Zwangsarbeit (einschließlich Zugang zu Abhilfe) regelt. 0 … ihre Produzenten bei der Umsetzung der sozialen Bündnisziele Targets reached Targets not reached unterstützen. … identifizierte soziale Risiken und potenzielle negative Auswirkungen bei Lieferantenauswahl bzw. Auftragsvergabe berücksichtigen. … einen Beitrag geleistet haben, um Beschäftigten den Zugang zu Beschwerdemechanismen zu erleichtern. … an einer Maßnahme mitarbeiten, die darauf abzielt, Beschäftigten in Produktionsländern existenzsichernde Löhne zu zahlen.

Naturfasern

… über eine Policy zum Einsatz nachhaltiger Schurwolle, einschließlich einer Positionierung gegen Mulesing, verfügen. … ihren Anteil von Bio-Baumwolle und/oder weiterer nachhaltiger Baumwolle steigern. Übergreifende Ziele 2018 2019 2020

… ihre Risiken und potenziellen negativen Auswirkungen kennen und priorisiert haben. … ihre Geschäftspartner und Produzenten systematisch erfasst haben.

… ein System etabliert haben, mit dem die Umsetzung ihrer Vorgaben in der Lieferkette kontinuierlich überprüft werden. … ein Verfahren eingeführt haben, um mit Verstößen der Geschäftspartner und Produzenten gegen ihre Vorgaben umgehen zu können. … einen Beitrag zum gesteigerten Bewusstsein der Öffentlichkeit für nachhaltige Textilproduktion leisten.

Chemikalien- und Umweltmanagement

… ihre Geschäftspartner und ProduzentenAnnual Report zur 2018 Einhaltung der B 28 Individual responsibility 29 ündnis-MRSL (mindestens ZDHC) verpflichtet haben. … ihre Produzenten und Geschäftspartner zur Einhaltung eines Abwasserstandards verpflichtet haben. … Produzenten bei der Verbesserung ihrer ordnungsgemäßen und continued umweltgerechten from page 27Betriebsführung unterstützen. … den Anteil der Produzenten steigern, die ausschließlich ZDHC-konforme chemische Produkte einsetzen. 2018 2019 2020 Social Standards and Living Wages

… have required their producers and business partners to comply with the Partnership’s social goals. … have established a process for dealing with cases of child and/or forced labour (including access to remedy). … support their producers with implementing the Partnership’s This policy provides the basis for companies not only wanting to influence their social goals. … take account of identified social risks and potential negative effects direct business partners, but also, if possible, further down the supply chain. when selecting suppliers and awarding contracts. The deeper the supply chain is analysed, the bigger the challenges become. It … have contributed to making it easier for employees to access is therefore especially hard to influence raw material and fibre production, the complaints mechanisms. … participate in an initiative designed to ensure that employees in first stage in the textile value chain. Given this situation, members are required producing countries are paid a living wage. to draw up and communicate a policy on using new wool starting in 2018. Ten companies already have a policy of this kind; another 34 members do not use Natural Fibres new wool. The other 31 companies have committed to adopt and publish a policy … have in place a policy on the use of sustainable new wool, including of this kind in 2018. a position in opposition to mulesing. … increase the proportion of organic cotton and/or other sustainable cotton they use. «Deuter will identify risks for Policy producing countries in 2018/19

A first step towards meeting due diligence obligations is a commitment to respect using various instruments and and implement recognised social and environmental standards and frameworks. These standards and frameworks are specified in the Partnership’s goals, which sources and compare them with all members have agreed to work towards. With a policy of this kind, members communicate requirements and expectations to their own employees, business Fair Wear Foundation country partners and other stakeholders. An analysis of reports by members reveals that almost all companies in the Partnership (70 out of 75) have elaborated and are studies.» communicating policies of this kind. The topics addressed most often are the Deuter Sport social issues of discrimination, health and safety and working hours. Companies’ policies more rarely cover the environmental issues tackled by the Partnership, such as maintaining protected areas and conserving biodiversity.

The most important issues in policies on the Risk analysis Partnership’s goals This year, all member companies are required to analyse risks within their entire business and prioritise risk areas that have been identified. The underlying fact is that most risks are very individual – depending on where a company operates and what products it makes. Prioritising also allows issues to be tackled where the risks and potential negative effects are the greatest so the impact of mitigation 77 77 75 74 73 73 71 60 52 51 measures is assumed to be especially high. Sixteen companies have already met

this goal. Fifty-three will draw up, update or add new topics or business areas to their risk analysis this year.

Using safe chemicals Child labour Forced labour Discrimination Working hours Environmental

Wages and social security benefits Health and safety

Good housekeeping

management system Freedom of association

and collective bargaining Annual Report 2018 30 Individual responsibility 31

Implementing measures in the supply chain

Main risks identified Partnership members are adjusting their business practices in a targeted and by companies individual manner, communicating their requirements to the supply chain and 34 28 26 19 18 supporting producers in implementing requirements, all based on their work to

identify risks. Members are already subject to a few mandatory targets in three areas: social standards and living wages, chemical and environmental manage-

safety ment and natural fibres.

Using safe chemicals Health and

Working hours management

Wages and social security benefits Social standards and living wages Water and wastewater All member companies must require that their pro- THE PARTNERSHIP’S SOCIAL ducers and business partners comply with the Part- TARGETS AND STANDARDS A company knowing which stakeholders are in its supply chain is a critical element nership’s social targets. Some 32 of 75 companies in identifying and mitigating risk. Some 72 of 75 companies are already working have already been able to provide evidence of this on mapping their supply chain to systematically analyse risks. They are gathering step. Other companies to which this target applies Freedom of association and information about business partners, producers and the deeper supply chain – will require their suppliers to comply with this target 1 collective bargaining by asking business partners directly, by consulting standards organisations or in 2018. with the help of their own monitoring systems. This year, member companies Gainful employment, ban on forced are required to systematically map all producers and business partners. This goal Dealing with child and forced labour is another pri- 2 labour, slave labour, debt bondage, has already been met by 33 companies. All others will now work on mapping. ority in the area of social standards. The first step is servitude and prison labour to take preventative action by communicating rules and by supporting producers and preventing child Ban on discrimination, harassment «The ecological risk of different fibres should and forced labour in the first place. However, cases 3 and abuse now be analysed as part of the material of child and forced labour being discovered in an audit, for instance, are happening time and again. Ban on child labour; protecting policy.» Adler Modemärkte Partnership members must be prepared for this sit- 4 young workers uation and have a method in place that provides for access to remedies as well. Twenty-three companies The farther down the supply chain that companies can identify suppliers, the have already introduced a process of this kind. For- 5 Wage/income and social security benefits more targeted are the measures that can be implemented there. The Textiles ty-seven others are planning to establish a frame- Partnership recommends that its members gradually map stakeholders farther work for action of this kind this year. Five companies down the supply chain for this reason. Many have already taken the first steps in are not subject to this target. They either only have 6 Working hours this direction and know their suppliers with wet processes for instance (especially manufacturing operations in Germany, where the dyeing and printing). Fourteen companies are tackling this work this year. What risk of child and forced labour is very low, or they do is more, nine companies have set themselves the recommended target of making not have a manufacturing supply chain due to their 7 Health and safety their business partners and producers public. business model. Annual Report 2018 32 Individual responsibility 33

Chemical and environmental management facturers met or even improved the standard this year, with five others putting in place a wastewater standard in their operations this year. Compliance will There are three priority areas in the area of chemical and environmental man- become mandatory for brands and retailers from 2019 onwards. agement:

Implementation and enforcement of a Manufacturing Restricted Substances Cotton 1 List (MRSL) for chemicals Each Partnership member sourcing cotton makes its own contribution to Introduction of proper and environmentally sound management practices collective success by consistently raising its share of sustainable cotton. 2 (good housekeeping) Partnership members have set minimum requirements for measurable target achievement that describe sustainable cotton growing.

3 Compliance with a wastewater standard Besides setting individual targets, they have agreed on a common goal of using at least 35% sustainable cotton by 2020. Some 10% of the total amount By enforcing an MRSL, the use of more than 160 chemicals must be organic cotton. By 2025, the proportion of sustainable cotton should in manufacturing will be gradually banned. These chemicals reach 70%, with the share of organic cotton reaching 20%. One third (34%) will be replaced with less harmful substances. Stipulations of companies sourcing cotton have set themselves the goal of sourcing at drawn up by the organisation ZDHC represent the minimum least 35% sustainable cotton (including organic cotton) for 2018. They want standard (see also page 62 – A bigger lever for a broader to achieve the Partnership goal for 2020 as early as 2018. impact). Many companies in the Partnership are already using this MRSL. Starting in 2018, members must send all of their producers and business partners an MRSL and accom- panying information. Fifteen companies demonstrated that they already reach this goal. Another 55 are planning to implement this goal this year. The long-term target is to ensure that only chemical products complying Reviewing and monitoring with the ZDHC specifications are used in the supply chain. Partnership members with their own manufacturing operations – often in Germany – are already quite Reviewing and monitoring business practices and supply chain management advanced in this respect, using an average of 73% ZDHC-compliant chemical is a key building block in the ability to evaluate and, if necessary, improve the products. achievement of measures. About 80% of companies in the Textiles Partnership use various methods to review textile production processes, for instance based Good housekeeping refers to proper and environmentally sound management on audits conducted during the quality management process or by making practices, such as occupational health and safety measures and proper chemicals comparisons with existing databases. storage. Partnership members can use annual environmental reporting, certi- fications and the Partnership’s Guideline on Preventing the Use of Hazardous Chemicals to put in place good housekeeping measures. Some 69 of 75 companies have planned specific activities in this area.

Partnership members with their own manufacturing operations have already made significant advances in complying withwastewater standards. Four manu- Annual Report 2018 34 Individual responsibility 35

Other stakeholder Remedies and groups’ results complaint mechanisms

The issue of remedies and complaint mechanisms is relatively new for many The Partnership takes a multi-stakeholder approach in order to solve the complex companies – even outside the Partnership. A complaint mechanism gives indi- problems facing the textile supply chain in a cooperative manner, for instance in viduals or groups formalised ways of raising concerns about human rights and Partnership Initiatives. Therefore, as well as involving companies, it is extremely social and environmental impacts and of passing on information about corrup- important to cooperate with political and civil society stakeholders to obtain sec- tion. A mechanism of this kind gives access, if necessary, to state and non-state tor-wide engagement. Non-governmental organisations, associations, standards remedies and the ability to secure compensation. Complaint mechanisms can organisations, trade unions and the German Government are making an important vary – from international courts to participation in local trade unions. contribution by providing support and advisory services with their international networks and specific expertise.

«By the end of 2018: Review the use of «In 2018, SÜDWIND is publishing two fact external points of contact for complaints/ sheets on living wages in Indonesia that also advice based on the RMG Directory distributed address freedom of association and working in Bangladesh in 2017. Derive suitable hours. SÜDWIND intends to make background measures (e.g. training to raise awareness, information available for a possible Partnership continuing education measures) in enterprises Initiative on living wages with these

run by directly contracted producers.» NKD Services publications.» SÜDWIND

The 17 non-governmental organisations are pursuing the Partnership’s goals by Member companies must take steps to set up an effective complaint mechanism advocating socially and environmentally acceptable textile production. On the one from 2019 onwards. Besides having their own mechanisms, many companies are hand, NGOs are connected in producing countries, which helps to raise awareness tending to embrace the use of existing complaint mechanisms, as a few initiatives of the issue among those responsible on the ground. On the other hand, they and standards have been established. Nineteen companies want to reach this provide consumers with information with the goal of influencing future buying goal as soon as this year. decisions. Information and communication are a key contribution made by the Textiles Partnership’s NGOs. Annual Report 2018 36 Individual responsibility 37

Altogether, the 17 non-governmental organisations have set 84 new targets for The two trade unions work together closely with trade unions in producing the coming year. They are working towards the goal of raising awareness, as countries. The goal is to assist local partners with training and events on freedom they did last year. Greater public awareness should raise the profile of sustain- of association and the right to collective bargaining. ability in textile production among consumers, at schools and among their own employees. On the other hand, NGOs are organising seminars to raise awareness The six standards organisations are carrying out a wide variety of activities. In in producing countries. particular, they aim to support member companies in carrying out and monitoring their measures in the supply chain. Standards organisations have set themselves the mandatory target of conducting capacity building measures to provide audi- «We are training 20 new multipliers at the tors with ongoing training Fashion and Human Rights FairCademy on three weekends in 2018 (…)» «Cotton made in Africa (CmiA) helps

Frauenwerk der Nordkirche companies by providing monitoring services. CmiA is improving tracking for mass balance. Fourteen associations, which support their members’ interests and coordinate The goal is to pilot enhanced reporting by the and launch activities, have committed themselves to achieving the Partnership’s goals. They are working on designing national and international supply chains supply chain starting at the spinning stage.» to be socially and environmentally responsible. For instance, they are fostering Aid by Trade policy dialogue with political decision-makers and assisting member companies in implementing and offering training courses in areas relevant for the Partnership.

The German Government is undertaking measures in three areas in 2018. The «Organising a round table event on German Government is working with the Dutch Government to mainstream due diligence obligations throughout Europe and improve coordination of national sustainability in the textile supply chain initiatives at EU level to improve the policy framework for sustainability in global with national and European decision-makers textile supply chains. from the worlds of business, politics, the International Labour Organization (ILO) and

OECD in Brussels in June 2018.» HDE Annual Report 2018 38 Individual responsibility 39

There’s always next review

Within the scope of development cooperation efforts, the German Government The review support group is currently working on behalf of the Steering Com- is helping partner countries to make specific improvements to social and envi- mittee to analyse lessons learned and feedback from Partnership members about ronmental manufacturing conditions in the textile industry on the ground. For this year’s review process to improve the process. The review process remains a instance, state labour inspectors in Bangladesh, Cambodia, Ethiopia and Pakistan learning system that will be refined from year to year. However, the vision is still are receiving initial and further training so that social standards are implemented to gradually deliver significant improvements in textile supply chains around the in a verifiable manner. Suppliers in Myanmar are receiving assistance in devel- globe. Socially and environmentally. We’re on the right track. oping and implementing action plans on equality.

«We are raising awareness of sustainable chemical management using best available techniques (BAT) among local decision-makers in producing countries as part of a German environmental project in India. The project will be expanded to the national level in India.»

German Government

The German Government’s actions in the third area aim to make public procurement more sustainable in Germany. It has set itself the ambitious goal of increasing the proportion of sustainable textiles it procures to at least 50% by 2020. The German Government is gearing its efforts towards requirements laid out in its step-by-step plan and a guide for sustainable textile procurement by government bodies. …BECAUSEAnnual Report 2018 40 Collective engagement 41 TOGETHER WE CAN ACHIEVE

MORE. Pillar 2 Collective engagement Annual Report 2018 42 Collective engagement 43

Collective engagement

We can achieve more together than we can alone. Partnership Initiatives are Making a big guided by this belief. The Textiles Partnership can make a big difference on the ground in producing countries by leveraging companies’ buying power and the expertise and contacts that NGOs, trade unions and the German Government bring to the table. Suppliers and local stakeholders play an important role in Partnership Initiatives, too. Partnership Initiatives also allow members to work on difference on targets contained in their roadmap. They can deliver results on the ground more efficiently than they could with individual measures and they free up energy, time and money for new or other activities.

All members are invited to share their ideas for initi- the ground atives and to launch Partnership Initiatives, together with other members, expert groups, the Partnership Members are invited Secretariat and the Partnership Initiative Committee. to share their ideas for Partnership Initiatives. The Steering Committee has so far approved four Partnership Initiatives. During the elaboration and specifying process, it became evident that not all of these initiatives were able to meet the stringent requirements. Consequently, the planned Partnership Initiative on seed in Tajikistan and Kyrgyzstan and the initiative on water management were classified as ‘partnership-related activities’. They have since been implemented by GIZ on behalf of BMZ.

On the other hand, the project partners are showing great dedication in driving forward the Partnership Initiatives on Improving Labour Conditions in Tamil Nadu (India) and Chemical and Environmental Management in China and Bangladesh. Here, the Partnership can show how the benefits of collective action can be leveraged to improve the situation in producing countries.

Two other initiatives are currently in the starting blocks: since mid-2018, the expert groups on Living Wages and Complaint Mechanisms have been working on their plans for implementation of specific activities within the scope of Part- nership Initiatives. Annual Report 2018 44 Collective engagement 45

The Partnership Initiatives in brief

Chemical and Environmental Time frame: the Partnership Initiative will initially run until the end of 2019. Work is already being conducted on a strategy for enshrining collective institu- Management tional structures on the ground in the long term so that harmonised, interna- tionally recognised training materials are freely available and members can offer Many Partnership members are looking at chemical and environmental manage- train-the-trainer events and advanced trainings on the ground together. ment in their suppliers’ factories. They have defined activities together to make considerable improvements to the situation on the ground:

1 Raising awareness among political, economic and social stakeholders; Improving labour standards in Tamil Nadu 2 Improving access to training and advisory services; This Partnership Initiative aims to make systematic improvements to working conditions in the textile and garment industry in the southern Indian state of 3 Promoting the substitution of hazardous chemicals and introducing Tamil Nadu, particularly for women and girls working in spinning mills (see also technical innovations. page 54 – Knowledge creates change). Working in close cooperation with Indian partners, the Initiative seeks to instigate changes at three levels: China and Bangladesh were identified as the first priority countries for implementation. Projects in other countries and chemical management projects have already A dialogue is being encouraged, the purpose of which is to been linked with these Partnership activities. Taking account of the groundwork raise awareness of workers’ rights among key stakehold- INITIATIVE carried out by other organisations and initiatives, participants are currently devel- ers in the local textile industry. A training programme is PARTNERS oping target group-specific strategies and materials for political dialogue, dissem- aimed at supporting the planned creation of complaints inating technical knowledge, raising awareness and providing training at factory offices in 300 factories and informing workers and man- Main partners: level. agers about workers’ rights and complaint mechanisms. German Federal Ministry for Economic Other training sessions are aimed at improving the quality Cooperation and Development (BMZ), INITIATIVE PARTNERS of labour and accommodation inspections carried out FEMNET e.V., Hugo Boss AG, KiK Textilien by 40 state inspectors and bringing them into line with & Non Food GmbH, Otto GmbH & Co. KG, Nineteen members are currently involved: international standards. Tchibo GmbH ALDI Einkauf GmbH & Co. oHG (for ALDI Nord), ALDI International Services GmbH & Co. OHG (for ALDI SÜD Deutschland), Amfori, Time frame: the Tamil Nadu Partnership Initiative was Associate partners: German Federal Ministry for Economic Cooperation and Development launched in July 2018 and will run until February 2020. Brands Fashion GmbH, TransFair e.V. (BMZ), Brands Fashion GmbH, Bundesverband der Deutschen Sportartikelindustrie e.V. (BSI), Deuter Sport GmbH, EDEKA Implementation partners: ZENTRALE AG & Co. KG, Deutsche Gesellschaft für internationale Multi-Stakeholder Initiative Tamil Nadu Zusammenarbeit (GIZ) GmbH, Hej Support, KiK Textilien & Non (MSI-TN) / Social Awareness and Food GmbH, Stiftung OEKO-TEX GmbH, ORSAY GmbH, Otto GmbH & Voluntary Education (SAVE) Co. KG, REWE Group, Takko Holding GmbH, Tchibo GmbH, German Federal Environment Agency (UBA), Stitching ZDHC Foundation (ZDHC) WE SHAREAnnual Report 2018 46 Mutual support 47 OUR KNOWL- EDGE AND LEARN B Pillar 3 FROM ONE Mutual ANOTHER... support Annual Report 2018 48 49

Support services A platform for learning and dialogue

The Partnership is taking targeted measures out of a desire to make it easier for members to shoulder their individual responsibility and encourage and supervise collective engagement. These activities are pooled in the Partnership’s third pillar under the heading of mutual support. Members learn together – with and from one another. Experts can exchange information and discuss potential solutions to challenges in a variety of formats – if needed with support from external expertise. Members – whether companies, civil society or the German Government – actively contribute their different skills and experiences to the Partnership. In doing so, they have helped to make the Partnership an important German-speak- Lively discussions ing knowledge platform for sustainability in the textile supply chain. In 2018, nine webinars informed members about the Partnership’s issues, shared on the Partnership’s topics at a working In 2018, the Partnership has worked harder on gathering and deepening its lessons learned and examples, and presented other initiatives. During a series meeting in 2018 members’ knowledge and on exploring selected issues in greater depth. A whole of webinars called “Understanding and Implementing Due Diligence”, members series of services has been created and put in place in the process. The central reported for instance on specific measures that help producers to implement the hub is the website’s Members’ Area, where information is shared, discussions are Partnership’s social goals. There was also strong interest in webinars on dealing set in motion and joint events are organised. with child and forced labour and preventing corruption.

Webinars 2018 Publications in 2018 number of participants number of downloads

33 Child and forced labour 134 Guidelines on chemical management

27 Capacity development 123 Remedy and complaint mechanisms handout

23 Risks and impacts 95 Risks and impacts handout

23 Preventing corruption 92 Policy handout

17 Complaints and remedies 81 Chemical inventory template

11 Communicate requirements 78 Chemical inventory template to the supply chain 56 Factsheet on complaint mechanisms

42 Factsheet on capacity development Annual Report 2018 50 Mutual support 51

The Partnership also provides its members a growing number of publications This year, it was once again evident that, as a platform for exchanging informa- such as handouts, guidelines and fact sheets. Handouts instruct members on tion and dialogue, the Partnership makes an important contribution to making a implementing due diligence. A few specialist publications, such as guidelines on sustainable textile supply chain a reality. The Partnership honoured its members’ preventing corruption and a guide on implementing chemical and environmental wishes and needs by offering practical and process-oriented support and facilitat- management in the supply chain, also met with strong interest among members. ing lively debate among members on especially pressing issues. The Partnership will encourage knowledge sharing among its members in the upcoming year too through many formats and on a variety of topics – whether in digital or printed form, in webinars or personal conversations at members’ meetings or working «For me, it was especially valuable meetings. to see how other companies address issues and implement requirements The first working in an exchange of experiences with meeting took place in Cologne in July 2018 other workshop attendees.» Martina Eder, Koppermann & Co

Personal dialogue was not neglected at events and workshops this year, either. About 160 Partnership members came together to share specialised information and lay the groundwork for the Textiles Partnership’s further development at the first two-day working meeting. During specialist workshops, an average of more than 35 members discussed important issues facing the textile sector: For instance, a workshop on supply chain transparency used case studies to show opportunities for members to use digital innovations to explore their own supply chains. At the living wages workshop, participants debated how wages can be raised across the board and how the Partnership can work more with other Initiatives to bring about lasting change together.

Working meetings and workshops in 2018 EXCERPT FROM THE MEMBER number of participants SURVEY (JANUARY 2018)

42 Supply chain transparency By January 2018, 76% of members had made use of the Partnership’s training opportunities (workshops and webinars). Survey respondents requested 41 Chemical and environmental management information about the topics of “living wages” and “supply chain transparency”, “complaint management” and “chemical management” (best 39 Living wages practices), as well as “purchasing practices” and “fostering cooperation within the Partnership”. These topics were addressed in a variety of learning 33 Sustainable chemical fibres and information formats in 2018.

30 Complaint mechanism … ANDAnnual Report 2018 52 Priority areas in 2018 53 MAKE PROGRESS TOGETHER.

Priority areas in 2018 Activities in the spotlight Annual Report 2018 54 Bündnisinitative Tamil Nadu 55

Tamil Nadu Partnership Initiative Knowledge creates change

Young women and Indian law provides access to remedy and complaint mechanisms and particular girls make up 80% protection for adolescents. However, many employers have little or no experience of the workforce at spinning mills in of setting up arbitration and complaint committees and organising them with Tamil Nadu regulated processes and functions.

The thriving industrial region of Tamil Nadu is located in India’s tropical south. Its economy grew at an annual average rate of more than 11% Dialogue is the main lever between 2012 and 2018. The textile industry is considered a “power house” in the region and plays a significant role in its economic suc- The Partnership Initiative on Systemic Improvements of Labour Conditions in cess. The state’s cities are home to around 2,000 spinning mills where the Tamil Nadu Textile and Garment Industry is dedicated to this issue and has a workforce made up of 80% young women and girls produces yarn supported the local Multi-Stakeholder Initiative Tamil Nadu (MSI-TN) since July in three shifts. They work hard and often put in a lot of overtime. 2018. It is implementing activities on the ground with the help of the non-gov- Employees are not always guaranteed that employers will pay them the ernmental organisation SAVE. Constructive dialogue is a key lever for change. In official minimum wage across the board. Moreover, they face the risk Tamil Nadu, existing law is not always adequately clear and has not been properly of sexual harassment. Many girls and women from poorer regions of enforced to date. Therefore, it is desirable that high-ranking representatives of India have found jobs in spinning mills. They came alone and some of Tamil Nadu’s Government and leading associations, such as the Southern Indian them do not have support from family and friends. Often, they do not Mills Association (SIMA) and Tamil Nadu Spinning Mills Association (TASMA), have a contact point for questions and complaints at their workplace. become involved alongside trade unions, non-governmental organisations and Very few of them are organised in trade unions. local initiatives. Annual Report 2018 56 Priority areas in 2018 57

Raising knowledge and awareness THE HOT SPOT OF INDIA’S The Partnership Initiative is also working directly with people in factories. On the TEXTILE INDUSTRY one hand, it aims to make managers more aware of the importance of comply- Tamil Nadu is India’s southernmost ing with basic labour and human rights standards. On the other hand, workers state. It stretches across the southern must know their rights and be given access to complaint mechanisms. Therefore, tip of the Indian peninsular exclud- extensive training programmes will be held at 300 factories, primarily spinning ing the western coastline. With an mills, starting in November 2018. These events will inform workers and managers area of 130,058 square kilometres, of complaint mechanisms and labour rights and standards. Internal complaints Tamil Nadu is India’s tenth-larg- committees and grievance redressal committees required by law will be set up and est state and roughly the same size members appointed on this basis. Elected in a secret ballot, members will also receive as Greece. However, its population additional training to guarantee that these new committees are effective and can density is much higher with 72 mil- function in the long term. The programmes will be carried out by 80 trainers from lion residents. The capital, Tirrupur, 40 local NGOs. These people will gain the necessary knowledge and qualifications is India’s textile hot spot. as part of a train-the-trainer scheme to enable them to subsequently offer training at factories themselves.

The Partnership Working together with the Government of Tamil Nadu, a total of 40 state labour Initiative works inspectors are also expected to receive training to improve the quality of inspections directly with people in the factories The Initiative is building regular dialogue between the government, the in factories and workers’ accommodation. private sector (factories and associations), NGOs and trade unions both at state level and in the four main manufacturing districts. This dialogue is By February 2020, the Partnership Initiative will impart the required knowledge to intended to help to enshrine a comprehensive understanding of sustaina- workers at the 300 spinning mills in Tamil Nadu so that they can stand up for their bility among all stakeholder groups and to prompt social improvements in rights and campaign for humane treatment. Ideally, the systematic improvements Tamil Nadu’s textile sector as part of a joint effort. Dialogue processes and to working conditions should be so far-reaching that multipliers involved in the structures should be expanded in the pro- process can reach a broader audience. cess. Moreover, the project should involve two major annual conferences involving INITIATIVE PARTNERS Partnership members in Tamil Nadu. At these events, knowledge and experiences Main partners: SAVE will be shared around the table to move German Federal Ministry for Economic the project forward. The Initiative is also Cooperation and Development (BMZ), FEMNET planning at least six dialogue meetings e.V., Hugo Boss AG, KiK Textilien & Non Food Founded by Aloysius Arockiam in 1993, SAVE is a at state level and bimonthly meetings at GmbH, Otto GmbH & Co. KG, Tchibo GmbH non-governmental organisation based in the southern district level. Local stakeholders from the Indian city of Tirupur. SAVE currently has almost 100 public, private and civil society sector will Associate partners: employees, working on issues including child labour, take part in these meetings. Brands Fashion GmbH, TransFair e.V. women’s rights (specifically in spinning mills and textile factories) and employees’ rights. The German NGO Implementation partners: FEMNET has been working with SAVE since 2016 after Multi-Stakeholder Initiative Tamil Nadu Mary Viyakula (SAVE’s Executive Director) reported on (MSI-TN) / Social Awareness and Voluntary the situation on the ground during a speakers-tour Education (SAVE) in Germany. Annual Report 2018 58 Priority areas in 2018 59

Living wages «The question is not whether but how»

Interview on the spotlight of the year with Frank Zach, a member of the Textiles Partnership’s Steering Committee and its deputy Living wages are a key focus of the chairman since May 2018 Textiles Partnership’s work. Why is it that companies simply do not pay their workers more? A scenario in which it was left up to multinational corporations to set wages would be far from desirable from a social standpoint. We believe that there is a different answer. The best wage is the outcome of negotiations between the employers and trade unions. From «The best wage is the this perspective, ensuring living wages also means strengthening trade unions outcome of negotiations and collective bargaining agreements and thus making more far-reaching between employers and improvement to employees’ human rights situation. trade unions.» If collective bargaining could result in living wages, why hasn’t this hap- pened a long time ago? A series of hurdles need to be over- come on this journey. In many countries affected by poverty wages, trade unions are very weak and there is not a culture of social dialogue. Companies are seri- ously scared of becoming less competitive in a global and highly competitive industry. NGOs often describe the costs of higher wages as low compared with big companies’ profits – and yet living wages can become a real economic risk in several areas. Annual Report 2018 60 Priority areas in 2018 61

How do we resolve this dilemma? higher wages for their suppliers’ ments for the low-wage sector in The only way is together. The various employees, a few companies would most countries affected by poverty. stakeholders can only impose fair certainly have already done so. Minimum wages are a political com- wages and good practices along the promise in the context of harsh global supply chain if they work You say that strong trade union global competition in developing together. This notion is the starting organisation is key to sustainable countries and emerging economies. point for the Textiles Partnership’s living wages. How can we help? These wages rarely come close to work and initiatives like Action, Col- The weak nature of trade union what is defined as a living wage in laboration, Transformation (ACT). organisations in many producing that specific country. ACT is taking on a leading role when countries, especially in East Asia and it comes to living wages. A number of Africa, is actually part of the problem. What exactly does ‘living wages’ years ago, the Dutch Fair Wear Foun- One effective way might be to forge mean? NEW PARTNERSHIP dation also identified this issue as big coalitions whose participating It is very simple: living wages are INITIATIVE ON LIVING relevant and put it on the agenda – companies hold significant market wages that people can live on. How a WAGES IN CAMBODIA and today it is a priority in the textile share. They can encourage the crea- wage of this kind is defined bypasses AND INDONESIA industry. This is not least to the credit tion of trade unions and foster social the actual problem: it doesn’t matter of the German Trade Union Confed- dialogue by bringing commercial whether ‘living’ is described in a soci- eration (DGB). As a member of the ological manner or expressed in a The Partnership for Sustainable Textiles is currently Textiles Partnership’s Steering Com- number of calories. A wage must drafting a proposal for a Partnership Initiative on mittee, it applied pressure when the «The weak nature allow a worker to have a dignified Living Wages, which is to be launched before the agenda was set. After all, the textile existence. For instance, how can the year’s end. The goal is to help raising wages above industry can only be socially sustain- of trade union life of a single mother seamstress in minimum wage level in Cambodia and in Indonesia, able if fair wages are paid at all Bangladesh improve if she has to go two of the main producing countries for Partnership stages of the long supply chain. At organisations in into debt each month to look after members based on purchasing volumes. DGB, we have been convinced of this her children? since the Initiative’s early days. many producing The Partnership is focusing on social dialogue on the ground. In Cambodia, Partnership members What is the Textiles Partnership countries, should actively support ACT, the Initiative’s activi- actually doing to ensure living ties on living wages, as it negotiates and carries out wages in the textile industry? especially in East broad implementation of an industry-wide collec- As the Textiles Partnership, our first tive agreement. step was to bring stakeholders Asia and Africa, is together. The task for brands and In addition to its efforts to raise wages in producing retailers is to analyse and change actually part of the countries, the Initiative is also planning to improve their sourcing and buying philoso- companies’ sourcing and purchasing practices. The phies. Joint efforts are needed here problem.» Partnership Secretariat is currently developing a so that this does not turn into a mas- purchasing practices self-assessment tool, which sive competitive disadvantage. We pressure to bear. Both ACT and the will be made available to members towards the can then bring on board suppliers Textiles Partnership represent con- end of the year. The online tool allows sourcing and who also have concerns about their siderable market share and thus have Frank Zach is Head of Division in the purchasing practices to be analysed and bench- competitiveness. Minimising or dis- weight in the debate – the Textiles International and European Trade marked and helps companies to identify potential pelling these fears is the first compo- Partnership alone has a market share Union Policy Department under DGB’s improvements in procurement. This analysis can be nent of any effective strategy to of about 50% in Germany. National Executive Board and is re- implemented as one of the roadmap goals for 2019. ensure fair pay. Anything else would sponsible for “international trade union fail to take account of economic real- Can’t policy-makers exert pressure policy” and “trade union and human ities and would have little prospect of and enforce minimum wages? rights”, “good work around the world” lasting success. If committed compa- Minimum wages set by law have not and “working conditions in global nies could simply impose or approve brought any substantial improve- value chains”. Annual Report 2018 62 63

International cooperation A bigger lever for a broader impact

«Cooperation between AGT and the Textiles Partnership is a crucial step towards a European approach to supporting due diligence in the A cooperation with the Dutch Agreement on Sustainable Garments and Textile (AGT) and the Sustainable Apparel Coalition (SAC) aims to gradually align sus- textile sector.» tainability requirements for brands and retailers based on the OECD Due Diligence Jef Wintermans, AGT Coordinator Guidance. This should help to create a level playing field beyond national borders. In this vein, the Textiles Partnership is actively involved in revising the SAC’s Higg Brand and Retail Module. The centrepiece of the partnership with AGT is Cooperation and networking with other European and international initiatives the option of associate membership, with two companies having already made and organisations are especially critical for the Textiles Partnership as a national use of this opportunity. Moreover, the Textiles Partnership and AGT are working stakeholder in a global industry. The Textiles Partnership entered a raft of stra- to disseminate the due diligence approach in the EU and to improve the coor- tegic cooperations in the past two years in order to unlock synergies with other dination of national initiatives at EU level. In 2018, the two initiatives organised initiatives and deliver results on the ground. These alliances also aim to recognise three joint events to this end in Paris, Brussels and Milan. activities carried out by other initiatives and thus reduce the burden involved in membership of the Partnership. «Both initiatives want to show that sustainable garment production is possible. «The challenges with living wages are so We are excited to work together to support complex that we can only deliver specific and companies in shouldering their responsibility universal improvements for workers together.» in the supply chain.»

Frank Hoffer, Executive Director, ACT Alexander Kohnstamm, Executive Director, FWF Annual Report 2018 64 Priority areas in 2018 65

«By working together, we are customising our initiatives’ instruments for brands and retailers. By doing so, we are helping to ensure a level playing field beyond national

borders.» Baptiste Carriere-Pradal, Vice President Europe, SAC

Within the parameters of cooperation with ACT to promote living wages, Part- nership members are able to use the self-assessment tool on sourcing and pur- Through a strategic cooperation with Textile Exchange, the Textiles Partnership is chasing practices developed by ACT members. Moreover, the Partnership intends also making a contribution towards international harmonisation of fibre-related to work with ACT on its planned measures on the ground in selected producing sustainability requirements and thus to increasing the quantity of sustainable countries. A strategic alliance with the Fair Wear Foundation (FWF) is also tackling fibres in sourcing and purchasing processes. the issue of living wages. Furthermore, it entails continuing existing lively expert dialogue on complaint mechanisms. Over the coming months, these discussions The Partnership will continue consistently pursuing the path of internationali- will be supplemented by specific joint measures as part of systematic work on sation through strategic cooperations in order to further enhance the benefits this topic in the Textiles Partnership. of membership and achieve its targets more effectively.

«Together with the Textiles Partnership and its «As an international initiative, Textile Exchange members, we are substituting hazardous chemi- views cooperation with the Textiles Partnership cals in the production of textiles and thus helping as critical in advancing the use of sustainable

to improve environmental and working conditions fibres in the textile sector.» Liesl Truscott, Director of European & Materials Strategy, in manufacturing countries.» Frank Michel, Executive Director, ZDHC Textile Exchange SOCIALLY AND ENVI- RONMEN- TALLY – WE’RE ON THE RIGHT TRACK www.textilbuendnis.com/en