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The Denim Supply Chain Speaks Up

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The Denim Supply Chain Speaks Up The Denim Supply Chain Speaks Up. #ETHICALIZEDENIM ENDING UNETHICAL BRAND & RETAILER BEHAVIOR: This report was commissioned and authored by the Transformers Foundation. Our goal is to help suppliers share their expertise and opinion on industry threats and solutions, brands and retailers transform their jeans from a commodity into unique and valuable fashion, and consumers choose the most environmen- tally-sound denim products and avoid greenwashing. Our events connect industry professionals who want a deeper understanding of the denim industry, cov- ering topics ranging from energy and water to social responsibility, technology and waste. Acknowledgements. Advisors. Though this report represents the views of The Trans- Andrew Olah is the founder of Transformers Foundation; formers Foundation only, the authors would like to thank the CEO of Olah, Inc., a full-service denim textile compa- all the organizations and people who contributed their ny; and the founder of the Kingpins Show, the first-ever expertise and ideas. Special thanks go to our partner denim supply chain trade show. Better BuyingTM on whose work we relied heavily. We also commend the honesty and bravery of the denim mills Miguel Sanchez is the Technology Leader for the King- and jean factories who lent their time and expertise to pins Show, a Textile Engineer at the Polytechnic Univer- this report. Additional thanks go to... sity of Catalonia, and a member of the Board of Directors of the Transformers Foundation. Jenny Holdcroft, Assistant General Secretary at IndustriALL Global Union Emily Olah is the acting Executive Director of the Trans- formers Foundation and Deputy to the CEO of Olah, Inc. Arianna Rossi, Senior Research and Policy Specialist, Better Work, International Labour Organisation Authors. Nazma Akter President, Sommilito Garments Sramik Federation-SGSF, Substitute Executive Committee Marzia Lanfranchi is the Intelligence Director of Trans- Member of IndustriALL Global Union formers Foundation, an independent sustainable fash- ion consultant, and the founder of Cotton Diaries, a solu- Ayesha Barenblat, Founder and CEO at Remake tion-based platform for cotton sustainability. Marsha Dickson, President and Co-founder of Alden Wicker is a freelance journalist who writes about Better BuyingTM environmental and labor issues in the global fashion industry. Owain Johnstone, Policy Advisor, Ethical Trading Initiative Ilishio Lovejoy, Policy and Research Manager, Copywriter & Fact Checker: Manmeet Sahni. Fashion Revolution Avedis Seferian, President & CEO of WRAP Graphic Design: Amy Carpenter, Voyage Creative Studio. (Worldwide Responsible Accredited Production) Liana Foxvog, Crisis Response Coordinator at Worker Rights Consortium Sharon Benning-Prince, COO & Founding member at Justice In Fashion Tim North, Global Head of Merchandising for the Ecom Cotton Group and Vice President of the © 2020 copyright Transformers Foundation International Cotton Association 2 THE DENIM SUPPLY CHAIN SPEAKS UP. ENDING UNETHICAL BRAND & RETAILER BEHAVIOR: This report would not have been possible without the generous contributions of our founding members: Cannon Michael, President/CEO, Bowles Farming Company Alberto Candiani, Global Manager, Candiani Denim Mostafiz Uddin, Managing Director, Denim Expert Ltd. Ali Abdullah, Managing Director, Diamond Denim by Sapphire Michael Kininmonth, Project Manager, LENZING Group Tricia Carey, Director of global business development LENZING Group Andrew Olah, CEO, Olah Inc. Stafford Lau, Managing Director , Prosperity Textile Dr. Wolfgang Schuman, Managing Director, The Rudolf Group Sanjeev Bahl, Founder and Chief Executive, Saitex International Danielle Statham, Co-owner, Sundown Pastoral Co Alice Tonello, Marketing and R&D Manager, Tonello And the active support of our Board of Directors: Alberto De Conti, Head of Fashion Division, The Rudolf Group Miguel Sanchez, Technology Leader, Kingpins Show Robin Cornelius, Founder, Product DNA 3 THE DENIM SUPPLY CHAIN SPEAKS UP. ENDING UNETHICAL BRAND & RETAILER BEHAVIOR: Table of Contents. CHAPTER 1 - Introduction Why This Report Is Needed 6 The Intent of This Report 7 CHAPTER 2 - COVID-19 Crisis Timeline of Events 8 CHAPTER 3 - What Happened to the Denim Suply Chain 10 Brand, Retailer, and Importer Behavior Towards Suppliers 11 - 15 The Damager Continues 16 What Do Suppliers Think? 18 Best Business Practices from Denim and Jeans Suppliers 19 - 25 CHAPTER 4 - Why Did This Happen? The Causes of the 26 - 37 Broken Denim Supply Chain CHAPTER 5 - The Way Forward: Our Calls to Action 38 - 39 For the Transformers Foundation 40 - 43 For the Denim Fabric and Jeans Manufacturing Supply Chain 44 - 46 For Brands, Retailers, and Importers 47 - 52 For NGOs/Labour Unions 53 - 55 For Policy Makers in Buyer Countries 56 For Policy Makers in Supplier Governments 57 For Denim Lovers 58 - 59 4 THE DENIM SUPPLY CHAIN SPEAKS UP. ENDING UNETHICAL BRAND & RETAILER BEHAVIOR: CHAPTER 6 - Conclusion 60 Appendix Key Contacts and Further Information 62 What the Denim and Fashion Industry Can Learn From Other Industries 63 - 66 References 67 - 69 Eight Ethical Principles for Purchasing of Jeans and Denim 70 - 71 5 THE DENIM SUPPLY CHAIN SPEAKS UP. CHAPTER 1 Why This Report is Needed. When a scandal explodes in the glob- When the Transformers Foundation was created at the al fashion supply chain, from forced and beginning of 2020, we planned to focus our first annual child labor to factory fires and collapses, report and recommendations on environmental issues. Then the COVID-19 crisis happened. We believe environ- the media sometimes briefly seeks out the mental issues are crucial, but the crisis has exposed voice of workers, who are well represented how deep the cracks in the supply chain go. We have by NGO and labor activists. But brands still a rare window of opportunity to fix the power differ- manage to dominate the conversation, of- ential that allowed brands, retailers, and importers to ten using cynical environmental and labor walk away from their contracts with suppliers without claims to lull consumers and industry pro- almost any consequence. More than just enforcing con- tracts, we hope to build ethics and care into an industry fessionals into trusting that brands are that right now seems to have very little of either. acting ethically. We are not saying that all denim mills and jeans facto- The Transformers Foundation was created to give a ries are perfect examples of ethical behavior. But what voice to the professionals who have been excluded from has become clear is that even the best suppliers and the conversation: the denim supply chain. From farm- factories in the world cannot operate, much less pay ers and chemical suppliers to denim mills and jeans their employees fairly and provide a safe working en- factories, we represent them all. Collectively, our best- vironment, in these conditions. We must transform the in-class suppliers know exactly what it takes to make denim industry to share profits and risks fairly across the highest-quality and innovative denim products. the supply chain. In short, suppliers’ disrespect and ex- They are also the foremost international experts on ploitation mean disrespect, exploitation, and mass lay- what needs to change in the denim industry, and how offs of garment workers. to do it. We must do better. 6 ENDING UNETHICAL BRAND & RETAILER BEHAVIOR: The Intent of the Report. Because of the control that brands, retailers, and im- porters (BRIs) have over the supply chain, few denim suppliers are brave enough to speak to the press about the shocking behavior from BRIs, behavior that not only transgressed legal and contractual boundaries but ethical boundaries and basic business decency. So we have stepped in to do so. We spoke to as many suppli- ers as possible and collected their thoughts and expe- riences to: 1. Identify the causes of the problematic relationship and power imbalance between brands and denim suppliers. 2. Put forth actionable, effective, and realistic solutions beyond the immediate crisis to enact long-term change. We also recorded hundreds of hours of conversation with suppliers, supply chain experts, governmental organizations, and activists and combined them with news, analysis, and reports pertaining to the denim in- dustry and the fashion industry at large before and dur- ing the COVID-19 crisis. On page 38 you will find our calls to action for each stakeholder in the denim industry. Our hope is that if the stakeholders come together to follow our recommendations and find success, the den- im industry can inspire the rest of the apparel and ac- cessories industry as we look toward a more just and equitable future. 7 THE DENIM SUPPLY CHAIN SPEAKS UP. ENDING UNETHICAL BRAND & RETAILER BEHAVIOR: CHAPTER 2 The Symptoms of a Broken System. December 2019 COVID-19 identified in Wuhan, Hubei province, China. 2020January 23rd: Wuhan goes under lockdown. At least 11 textile and apparel factories February within the city are affected.1 More Chinese cities go under lockdown. 30th: WHO declares the COVID-19 Suppliers outside of China have trouble epidemic a public health emergency of getting materials from the country. international concern.2 Brands pressure suppliers to produce faster, financially penalize them for late March shipments. 9th: National quarantine in Italy. Factories shutter, stores close. Factories and mills in China start reopening at partial capacity. April 14th: Spain imposes lockdown. Early: China lifts the lockdown and encourages citizens
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