May 2021 Spinning around workers’ rights International companies linked to forced labour in Tamil Nadu spinning mills Pauline Overeem Martje Theuws SPINNING AROUND WORKERS’ RIGHTS | 1 Diewertje Heyl Colophon AUTHORS Pauline Overeem (SOMO), Martje Theuws (SOMO), Diewertje Heyl (Arisa). TEXT CORRECTIONS Leigh Chambers LAYOUT Karen Paalman. www.getlos.nl Contributions by Meike Skolnik (SOMO) and Hans Maas (Arisa). Mondiaal FNV has actively supported and contributed to the research. Thanks to Martha Kapazoglou and Eva Loeve, who supported work on this report during their internships at SOMO in 2020 and 2021. Also, many thanks to the Dutch anthropologist1 who joined the research team in a volunteer capacity, from mid-October 2019 to mid-January 2020. Arisa and SOMO are part of the Dutch coalition of the Clean Clothes Campaign (CCC). This publication has been made possible with financial assistance from Mondiaal FNV and the Dutch Ministry of Foreign Affairs (Strategic Partnership - FGG). Disclaimer: The content of this publication is the sole responsibility of Arisa and SOMO and does not necessarily reflect the views of the Ministry of Foreign Affairs and Mondiaal FNV. May 2021. SOMO SOMO investigates multinationals. We conduct action-oriented research to expose the impact and unprecedented power of multinationals. Cooperating with hundreds of organisations around the world, we ensure that our information arrives where it has the most impact: from communities and courtrooms to civil society organisations, media and politicians. www.somo.nl Arisa Arisa is an independent human rights organisation aiming to support and strengthen human rights in South Asia, together with local NGOs and trade unions. The focus of our work is on the rights of vulnerable groups in global supply chains. www.arisa.nl Indian partners The Indian counterparts are well-respected and well-established labour rights and human rights organisations and labour researchers based in Tamil Nadu who SOMO and Arisa have been working with for years. We cannot reveal their identities in this public report, for fear of retaliation. SPINNING AROUND WORKERS’ RIGHTS | 2 Preface It would be easy to assume, as a consumer in a globalised economy, that there are no secrets about how prod- ucts are made. We are bombarded daily with images of new clothes, worn by models on billboards, or endorsed by influencers on social media around the world. And with brands increasingly committed to safeguarding both environmental standards and human rights, and governments slowly imposing laws to prevent violations of these rights throughout supply chains, then surely a fair apparel production process seems within reach? Unfortunately, as this report shows, such a situation is still a long way away. Behind the scenes - and away from the scrutiny of buyers, brands, and inspectors - millions of people are working in conditions you do not wish upon anyone, to create the yarn and fabric required for clothing. The apparel supply chain is highly fragmented, both vertically and horizontally. Yarn and fabric can be sold from one entrepreneur to another before finally ending up in factories producing branded goods. To the brands, it may seem like their t-shirts, shirts and trousers are created under fair circumstances because the working conditions and labour standards at the factory are regularly inspected, and the brands receive positive assessments of what is happening there. The same applies for factories where household textiles are produced. Yarn and fabric suppliers further up the supply chain receive, however, much less attention. This report by SOMO and Arisa, supported by Mondiaal FNV, includes a detailed description and analysis of the human rights situation in the textile mills of Tamil Nadu where workers’ rights are being violated, workers are too afraid to object to sub- standard working conditions and excessive overtime for fear of losing their jobs, women are suffering harassment on the factory floor and in the hostels where they are obliged to live, and workers are not being paid a proper wage. This report makes painfully clear that there is a dire need for all corporate actors along the apparel supply chain to commit to heightened Human Rights Due Diligence in all phases of product development, also in the upstream supply chain. It includes clear recommendations to brands on what action they should take, and where their focus should lie. One such recommendation is engaging in rigorous supply chain mapping, along with, and this recom- mendation is close to my heart, actively committing to furthering freedom of association and collective bargaining. Facilitating the establishment and functioning of democratically elected, independent, factory-level trade unions that give workers a voice in improving their working conditions is essential to finally creating supply chains. Karen Brouwer Managing Director Mondiaal FNV SPINNING AROUND WORKERS’ RIGHTS | 3 Table of contents Executive summary 6 1. Introduction 12 1.1. Why this research? 12 1.2. Reading guide 12 2. Methodology 13 2.1. Selection of mills 13 2.2. Field research 14 2.3. Supply chain research 15 2.4. Company review 15 2.5. Methodological challenges 15 3. Context 17 3.1. India’s cotton, textile, and garment industry 17 3.2. The Tamil Nadu textile and garment industry 18 3.3. Trade unions 20 3.4. Social exclusion based on caste and tribal background 20 3.5. Caste discrimination in garment factories and spinning mills in Tamil Nadu 21 4. Normative framework - fundamental labour standards 22 4.1. International guidelines for responsible business conduct 22 4.2. Fundamental labour standards 22 4.3. Forced labour indicators 23 4.4. Legislative developments and existing supply chain legislation 27 4.5. Labour laws in India and Tamil Nadu 27 4.6. Caste-based discrimination legislation in India 30 5. Evidence of existence and risk of forced labour 32 5.1. Characteristics of the 29 investigated mills 32 5.2. Respondents’ profiles 33 5.3. Evidence of forced labour – using the 11 ILO indicators 37 6. Impact of COVID-19 68 6.1 Loss of income 68 6.2 Emergency relief 68 6.3 After lockdown 69 6.4 Safety measures inadequate 70 7. Responses to the research 71 7.1 Supply chain links 71 7.2 Links established based on corporate disclosure 73 7.3 Links with vertically integrated manufacturers 75 7.4 Company responses with regard to the draft research findings 77 8. Conclusions: Beyond 29 mills – a sector risk analysis 79 8.1 Incidence and risks of forced labour 79 8.2 Lack of publicly available data and supply chain transparency 82 8.3 Flawed business model 82 8.4 Restricted interpretation of supply chain responsibility 83 8.5 Reliance on social auditing 83 8.6 Frontrunners bear the brunt 83 8.7 Leverage 84 9. Recommendations 85 9.1 Corporate actors 85 9.2 Government actors 89 9.3 Need for further independent research 91 SPINNING AROUND WORKERS’ RIGHTS | 4 Abbreviations AGT: Dutch Agreement on Sustainable Garments and Textile AITUC: All India Trade Union Congress CITU: Centre of Indian Trade Unions BC: Backward Caste BCI: Better Cotton Initiative BHRE: Business, Human Rights and the Environment Research Group CMT: Cut Make Trim CoC: Chain of Custody ESI: Employee’s State Insurance EPF: Employees’ Provident Fund ETI: Ethical Trading Initiative FC: Forward Caste FGD: Focus Group Discussion FLA: Fair Labor Association FNV: Federatie Nederlandse Vakbeweging FWF: Fair Wear Foundation GOTS: Global Organic Textile Standard HRDD: Human Rights Due Diligence ICC: Internal Complaint Committees ICN: India Committee of the Netherlands (now Arisa) IDSN: International Dalit Solidarity Network ILO: International Labour Organization ITUC: International Trade Union Confederation MBC: Most Backward Caste mHRDD: Mandatory Human Rights Due Diligence MSI: Multi-Stakeholder Initiative NGO: Non-Governmental Organisation OBC: Other Backward Class OT: Overtime PST: German Partnership for Sustainable Textiles RBC: Responsible Business Conduct RBI: Responsible Business Initiative SAI: Social Accountability International SC: Scheduled Caste SIMA: Southern India Mills’ Association ST: Scheduled Tribe TASMA: Tamilnadu Spinning Mills Association TEA: Tirupur Exporters’ Association UNGP: United Nations Guiding Principles on Business and Human Rights WC: Works Committee SPINNING AROUND WORKERS’ RIGHTS | 5 Executive summary 1. Introduction 1.1. Why this research? 1.2. Reading guide Executive summary 2. Methodology 2.1. Selection of mills 2.2. Field research 2.3. Supply chain research The state of Tamil Nadu in the southern part of India, is a major hub in the global cotton-based textile and garment 2.4. Company review industry. Countless foreign factories, brands and retailers are sourcing a variety of products made in Tamil Nadu, 2.5. Methodological challenges from yarns and fabrics to apparel items and household textiles. Hundreds of spinning mills operate around the 3. Context clock to churn out huge quantities of yarns and fabrics. Over sixty per cent of all Indian spinning mills are located 3.1. India’s cotton, textile, and garment industry in this state and employ over 280.000 workers. Tamil Nadu is the second largest contributor to the national Indian 3.2. The Tamil Nadu textile and textiles industry, accounting for 19 per cent of the country’s overall textile output. garment industry 3.3. Trade unions But the Tamil Nadu textile industry is also the scene of persistent labour rights violations. In the past ten years, 3.4. Social exclusion based on 2 3 caste and tribal background SOMO and Arisa , along with other civil society actors have reported on a range of labour rights violations, includ- 3.5. Caste discrimination in garment ing child labour, discrimination on the basis of caste and tribal background, and forms of forced labour in garment factories and spinning mills in and textile factories. Tamil Nadu 4. Normative framework - fun- damental labour standards ‘We are working non-stop, without knowing whether it is day or night.’ 4.1.