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The Financial Express

Suppliers like Bangladesh suffer most as brands skip payments: Global report


Suppliers like Bangladesh suffer most as brands skip payments: Global report

About 35 per cent of 428 surveyed fashion brands failed to show any evidence of making regular payments to their suppliers during the Covid-19 pandemic, according to a recent global report.

Around 65 per cent showed some evidence of regular payments in the form of maintaining orders. About 45 per cent of them made a public commitment while 29 per cent provided documentary evidence to maintain ongoing orders, it revealed.

The study titled 'The Covid Fashion Report' by Baptist World Aid Australia assessed a total of 96 companies - 50 from Australia, 11 from New Zealand and 39 from other countries representing more than 400 brands on their positive actions taken during the coronavirus pandemic.

Countries like Bangladesh have been the worst-affected, with estimates that over one million ready-made garment (RMG) workers lost their jobs in April 2020 alone, according to a report published this month.

"Despite local legal entitlements, 72 per cent of suppliers reported that they were unable to pay furloughed workers and 80 per cent were unable to provide severance pay to dismissed workers," it said adding a reported 98 per cent of buyers refused to contribute to these costs.

Covid-19 has swept across the planet, sparking subsequent health, economic, and humanitarian crises, the report said, adding industries like fashion, which have complex global supply chains, employ large numbers of workers in vulnerable contexts, and rely on discretionary consumer spending have been amongst the most-impacted.

Distilling the essence of the elements normally examined in the Ethical Fashion Report to those most salient to the Covid-19 crisis, six key commitments were identified that are feasible for companies to take, and those, which will make the greatest difference to workers.

Some 43 surveyed companies, including Adidas, H&M, Inditex, Kmart and Target Australia, Next, Puma, PVH, Uniqlo and VF Corporation provided evidence of actions for all commitments.

A total of 26 companies including Best & Less, Gap Inc, Marks & Spencer, Nike and Ralph Lauren, provided evidence of action for some commitments and 27companies including Arcadia Group, Blue Illusion, and L Brands provided no evidence of actions taken related to the commitments, the report revealed.

It also showed that 72 per cent have evidence some action in relation to one or more commitments while 55 per cent have gaps in one or more commitments.

Just over half or 56 per cent of companies were able to demonstrate ongoing communication with their suppliers regarding worker health and safety, while 37 companies provided suppliers with hygiene resources for use in their facilities.

"It is concerning that in an environment where the pandemic has increased vulnerability across new and existing categories of workplace risk, a significant cohort of companies or 44 per cent could not demonstrate that they were actively engaging with their suppliers on these issues," the report noted.

Terming social audits 'a key tool' employed by fashion companies to ensure their supply chains are compliant with agreed standards and policies, it showed that 48 per cent of companies assessed were unable to provide any evidence that factory audits had been conducted since the onset of Covid-19.

Between March and May 2020, the world's 50 million garment workers lost wages totalling $5.79 billion, the report said, adding more than one in three surveyed Bangladeshi garment workers reported their children had gone without food during May 2020.

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