Recently published in the Business & Human Right Resource Center (BHRC) by a survey of 35 brands and retailers, just 19 were prepared, including H&M and Zara owners Inditex, to pay for the entire order. According to COVID-19 tracker from the Workers Rights Consortium which include Topshop retailer Arcadia Company, Bestseller, C&A, Edinburgh Woolen Mills Company, Gap, JC Penney, Kohl’s, Urban Outfitters, Sears and Asda, operated by Walmart.
These decisions are having a devastating impact on garment workers in supply chains: as orders dry up, millions of workers have lost their jobs or gone up to two months without being paid wages, and for those still working, they are earning a fraction of their usual pays. This has led to workers from Pakistan and Bangladesh to Cambodia to take to the streets in demand of wages as they face futures with no food, housing or work.
The survey shows that the pre-existing conditions of severe power imbalance between clothing brands, suppliers and workers have been exacerbated by the COVID-19 pandemic.
Thulsi Narayanasamy, Senior Labour Researcher at Business & Human Rights Resource Centre, said: “In the face of international disruption caused by COVID-19, too many fashion brands are only looking to protect their own profit at untold cost to workers who make the clothes they sell. Hard-nosed refusal to pay for orders in this pandemic is only an extension of how many fashion brands do business: driving down costs and dodging their share of the risk in supply chains.
“In contrast, some brands have stood out against this norm, showing leadership. This can build trust with suppliers and workers on whom their successful recovery will depend. Laggard brands must follow this example or risk undermining efforts to protect workers. Brands being transparent about their action should be applauded as this allows civil society and workers to monitor whether commitments are being met.
“Ultimately, without binding industry standards to enforce fair purchasing practices there is no level playing field for responsible brands, and no protection for workers. Instead callous companies can under-cut with impunity. This has left millions of women and migrant workers in fashion’s supply chains unable to put food on the table for their children, and wondering how they will pay the rent.”
Eight companies have requested retroactive “discounts” from suppliers for orders they had previously placed. Debenhams, the nonprofit pointed out, has asked for a whopping 90 percent discount. In addition, eight firms including Primark have delayed settling their bills by extending their usual payment term by up to 180 days, or six months.
Three brands — Hermès, N Brown and Zalando — said that some suppliers were shorter payments in order to alleviate issues with cash flow during the crisis. Another 23 said they have taken steps to ensure that workers are paid in March and April and 19 businesses said they are helping suppliers access financial resources.