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Follow the Thread FOLLOW THE THREAD The Need for Supply Chain Transparency in the Garment and Footwear Industry HUMAN FOLLOW THE THREAD RIGHTS WATCH The Need for Supply Chain Transparency in the Garment and Footwear Industry I. SUMMARY ............................................................................................................................4 II. THE CASE FOR SUPPLY CHAIN TRANSPARENCY ......................................................................6 III. THE TRANSPARENCY PLEDGE ...............................................................................................8 IV. APPAREL COMPANY RESPONSES .........................................................................................; Full Pledge or Close to Full Alignment with Pledge ........................................................................................9 Some Transparency, More Needed ..............................................................................................................10 No Commitment to Publish .........................................................................................................................12 Debunking the So-Called Barriers to Transparency .......................................................................................13 Competitive Disadvantage .....................................................................................................................13 Anti-Competition Law ............................................................................................................................13 Moving Beyond Private Disclosure ..........................................................................................................13 V. THE WAY FORWARD ..............................................................................................................47 ACKNOWLEDGMENTS ...............................................................................................................48 APPENDIX I: BRAND OUTREACH PROCESS AND RESPONSES ......................................................49 APPENDIX II: PLEDGE RATIONALE .............................................................................................4: APPENDIX III: BRAND RESPONSES RECEIVED BY COALITION ......................................................53 FOLLOW THE THREAD: The Need For Supply ChaIN TraNSpareNCy IN The GarmeNT aNd FooTwear INduSTry disabilities. These were the deadliest garment factory THE GL OB AL GARMENT INDUS TRY SUPPL Y C HAIN I. SUMMARY fires in nearly a century. Until these tragedies occurred, virtually no public infor - Gr owing, Ginning, T rading The garment and footwear industry stretches mation was available concerning apparel companies that around the world. 1 Clothes and shoes sold in were sourcing from the factories involved. The only way to identify these apparel companies and advocate for ac - Ginner s r ec ei ve c ott on f rom mu ltip le stores in the US, Canada, Europe, and other parts gr ower s and sel l t o the glo bal m ark et of the world typically travel across the globe. countability was to interview survivors and rummage through the rubble afterward to find brand labels. thr ough t rader s. They are cut and stitched in factories in Asia, Eastern Europe, Latin America, or other regions. A system of corporate accountability that requires people Factory workers in Bangladesh or Romania could to scramble on the ground for brand labels is the antithe - sis of “transparency.” Sp inning, Knitting or Weaving, Dy eing have made clothes only weeks ago that con - sumers elsewhere are eagerly picking up. Over the past decade, a growing number of global apparel companies have published information on their websites Sp inner s u se c ott on f rom a var iety of about factories that manufacture their branded products. or igin s t o pr oduc e yarn; f abr ic mi lls When global supply chains are opaque, consumers often pr oduc e c loth. lack meaningful information about where their apparel For more than a decade, adidas, Levi Strauss, Nike, Patag - was made. A T-shirt label might say “Made in China,” but onia, and Puma have been publishing information on in which of the country’s thousands of factories was this their supplier factories. Over time, more apparel compa - 4 garment made? And under what conditions for workers? nies and retailers with own-brand products joined them, posting some information about supplier factories on There is a growing trend of global apparel companies their websites. adopting supply chain transparency 2—starting with pub - lishing the names, addresses, and other important infor - As more companies adopt supply chain transparency, it is mation about factories manufacturing their branded becoming a cornerstone of responsible business conduct Cutting, Sew ing, Trimming Em br oider y, Pr inting, W ashing products. Such transparency is a powerful tool for pro - in the garment sector. Increasingly, brands and retail moting corporate accountability for garment workers’ chains are beginning to understand that being an ethical business requires them to publish where their own-brand a Cut -m ake-t rim (CM T) f act or y rights in global supply chains. clothes or footwear are being made. manuf act ures g arment s. Transparency can ensure identification of global apparel companies whose branded products are made in factories b A CM T f act or y th at l ac ks in-hou se cap ac ity f or s maller pr oc esse s where bosses abuse workers’ rights. Garment workers, subc ont ract s them t o another f ac ility , unions, and nongovernmental organizations can call on whic h then send s the g arment s b ac k these apparel companies to take steps to ensure that to CM T f act or y. abuses stop and workers get remedies. Publishing supply chain information builds the trust of War ehou sing, Shipp ing workers, consumers, labor advocates, and investors, and sends a strong message that the apparel company does not fear being held accountable when labor rights abuses CM T f act or y s hip s g arment s who le sale are found in its supply chain. It makes a company’s asser - to the br and th at p lac ed the or der s. tion that it is concerned about labor practices in its sup - plier factories more credible. 3 The need for information about factories involved in pro - duction for global brands has become painfully clear in Ret ai l STORE recent years through deadly incidents that have plagued the garment industry. Br and di stribut es g arment s BRAND The Rana Plaza building collapse in Bangladesh on April glo bally t o r et ai l and on line s tor es. 24, 2013 killed over 1,100 garment workers and injured BRAND BRAND BRAND BRAND more than 2,000. In the year before the collapse, two fac - tory fires—one in Pakistan’s Ali Enterprises factory and another in Bangladesh’s Tazreen Fashions factory—killed more than 350 workers and left many others with serious 1 APPAREL COMPANIES PUBLISHING SUPPLIER FACTORY INFORMATION IN USTW As of December 2016, the following apparel companies were among those that published some supply chain information about their branded products: adidas, C&A, Columbia Sportswear, Cotton On Group, Disney, Esprit, Forever New, Fruit of the Loom, Gap Inc., G-Star RAW, Hanesbrands, H&M Group, Hudson’s Bay Company, Jeanswest, Levi Strauss, Lindex, Marks and Spencer, Mountain Equipment Co-op, New Balance, Nike, Pacific Brands, PAS Group, Patagonia, Puma, Specialty Fashion Group, Target USA, VF Corporation, Wesfarmers Group (Kmart and Target Australia, and Coles), and Woolworths. This is not a comprehensive list. 6 This report takes stock of supply chain transparency in Supply chain transparency practices vary immensely the garment industry four years after the industry disas - among companies. Among those apparel companies ters in Bangladesh and Pakistan that shook the global that embrace transparency, the details they publish are garment industry. To build momentum toward supply inconsistent. 9 Many other companies refuse to publish chain transparency and develop industry minimum supplier factory information at all, or divulge only scant standards, a coalition of labor and human rights groups information. Some companies attempt to justify non- asked 72 companies to agree to implement a simple disclosure on commercial grounds. But their explana - Transparency Pledge. It also asked that companies de - tions are belied by the experiences of other similarly clining to commit to the Pledge provide reasons for situated companies that do publish and have shown choosing not to do so. 7 Where companies engaged with that the benefits of disclosure outweigh perceived TRACING SUPPLY CHAIN TRANSPARENCY IN THE GARMENT INDUSTRY the coalition, the coalition also sought additional infor - risks. 10 mation about their existing transparency practices. This Ultimately apparel companies can do far more than im - Until less than two decades ago, no major apparel company published its global supplier factories network. The report explains the logic and the urgency behind the plement the Pledge to ensure respect for human rights companies viewed the identity of supplier factories as sensitive business information, and thought disclosure Pledge and describes the responses we received from in their supply chains. Nonetheless, this is one impor - the companies contacted. 8 Further information about would put them at a competitive disadvantage. tant step in a holistic effort to improve corporate ac - the apparel companies contacted, the reasons for countability in the garment industry. In
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