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Labour Behind the Label

How are brands protecting supply chain workers during COVID-19?

We are calling on the five biggest retailers, and two biggest e-retailers in the UK, to protect the workers in their supply chains during COVID-19. We believe that these brands have the power to act responsibly and change the direction of all UK brands.

Some of the brands that we are targeting in our petition are already starting to respond to pressure and take steps to minimise the harmful impacts of COVD-19 on garment workers. This shows that solidarity works!

Whilst some brands are now honouring their existing orders, none have met all seven demands aimed at protecting garment workers. 

Taking steps in the right direction

Marks and Spencer

In March, it was reported that Marks & Spencer initially made the decision to cancel £100m in clothing orders in response to the COVID-19 outbreak. Following pressure from labour rights groups, Marks and Spencer have since agreed to receive and pay for placed orders with their suppliers.

Steps in the right direction: We welcome Marks & Spencer’s decision to honour their existing orders.

What next: We are now seeking confirmation of provisions for logistics workers and overseas workers in their supply chains, including how they will monitor these commitments. We are also calling on Marks and Spencer’s to commit to ensuring that any government support will be prioritised for workers as well as commitments to ensuring that the unequal and unethical practices of the global garment industry will be adapted to ensure that going forward, workers in production countries will be afforded greater resilience to the negative effects of similar events.

Next 

Next initially moved to delay or cancel any orders with an ex-factory date after 10 April 2020.   We will be asking Next to make it clear what actions it has been taking and what orders it has cancelled or postponed.

Next’s response: Next responded to the petition and also issued a statement (23 April 2020) on how they are dealing with their suppliers.

Next states that it is honouring all contracts in full (and in the normal payment terms of 30 days) for orders that were due to leave supplier factories up to and including 10 April 2020.  If a supplier’s factory is based in a lockdown country NEXT will accept orders up to 10 April 2020 up to a week after that country’s lockdown is lifted. For orders with a delivery date after 10 April will either be delivered and paid for on normal terms or delivered late or cancelled with compensation to ‘help’ cover the cost of fabric or similar components. Next reports that the vast majority of orders are or will be paid for normally.

In terms of production, after a few weeks closure of their online operations, they restarted online selling on 14 April with a limited amount of orders each day in order to limit the ‘number of warehouse colleagues working at any time’.  New orders are beginning to be placed. In countries – notably Bangladesh – where factory work continues Next have said they are working with local partners and staff to meet safety requirements.

Next have said they have been working with each and all suppliers – the number of CSR staff working continues with only a small reduction (unlike Arcadia!). Next have also said that they are working with multi stakeholder initiatives to mitigate impact for workers short and longer term.

LBL will continue to monitor these commitments and follow up. But for now Next is on the right track.

What next: We are  calling on Next to commit to ensuring that any government support will be prioritised for workers as well as commitments to ensuring that the unequal and unethical practices of the global garment industry will be adapted to ensure that going forward, workers in production countries will be afforded greater resilience to the negative effects of similar events.

ASOS

It is reported that ASOS is refusing shipments for orders from third-party brands and suppliers. As brands only pay on shipment, this means that ASOS is attempting to push the losses on to their suppliers. This is despite the fact that ASOS is still selling its clothes online and managed to raise a reported £247m through a share placement to help it survive the crisis. In addition, more than 98% of more than 460 workers who took part in a survey carried out by GMB union said they felt unsafe at the group’s warehouse.

Next steps: ASOS must pay for the orders that they have already placed and pay the originally agreed amounts to the original terms. We are calling on ASOS to put their workers before their profits. Brands that continue to operate must comply with World Health Organisation guidance on social distancing and PPE to prevent the spread of COVID-19. Workers who stop working due to COVID-19 risks should not be penalised and ASOS should ensure that all workers can stay at home if they have systems, without risking their wages or their employment. We are also calling on ASOS to commit to ensuring that any government support will be prioritised for workers as well as commitments to ensuring that the unequal and unethical practices of the global garment industry will be adapted to ensure that going forward, workers in production countries will be afforded greater resilience to the negative effects of similar events.

ASOS Response: The CEO of ASOS, Nick Beighton, as responded to us saying he has visited the warehouse in question and ASOS has since published a statement detailing safety guidance. We are following up on this. ASOS has also said that it has been working directly with all suppliers to find “mutually-agreeable solutions”. We remain concerned and will be asking for details.

ASOS Response -28th April: ASOS states it is working with all suppliers to ‘find mutually-agreeable solutions, with the protection of workers a priority”. This may include postponing or changing orders. According to some reports, ASOS has backtracked on some cancellations and reduced the overall amount of losses to suppliers by a large amount. We will continue to follow ASOS’s claims and are waiting for ASOS to publish more information.

ASOS response 18th May: ASOS has been working with their own-brand suppliers to reduce the volume of cancellations and reinstate orders. They have now committed to paying in full for all made orders that they had previously cancelled, see more details on this statement. They have made a public commitment to pay suppliers to agreed payment terms. They have also published a statement detailing safety guidance for their logistics staff in UK warehouses.

Not doing enough to protect workers in supply chains

Primark

Primark initially announced the cancellation of all orders in production, provoking widespread criticism. In response to the criticism, Primark announced a fund to help pay workers in their supply chains for one month, given that they still refused to pay for raw materials or production costs, this move did not support suppliers to stay afloat and would not have helped to secure workers jobs. There were also no details as to how this money would be given to workers and when.

Following ongoing pressure from labour rights groups, Primark has now announced that they will pay for all goods already handed over prior to the cancellation notice of 18 March. Payment will be subject to the normal Primark Terms and Conditions and will be paid for within the normal 30-day payment terms.

Ongoing concerns:  We welcome Primark’s decision to honour orders scheduled to be shipped by 18th April, however we have ongoing concerns. Goods that were ordered and booked into the Primark system before the cancellation notice – 18 March – will be taken by Primark but payment will be subject to extended payment terms of 180 days after shipment.  Primark have also said that it will delay all handovers of previously booked goods for a month in order to secure storage space. Orders that were not booked before 18 march but were due for delivery by 18 April will be paid for but again payment is delayed for up to 180 days after shipment – in addition, suppliers are asked to keep the goods ‘for a significant period of time’.

On the surface it seems like Primark are honouring their orders – in fact not only are they delaying payments to suppliers for completed orders for up to six months but payment could take even longer as they are blocking delivery! This is not acceptable and does nothing to support suppliers pay workers wages!

What next: Primark must do better and pay up for orders in a reasonable time period. Revised shipment deadlines should take into consideration occupational safety and health requirements, in terms of worker safety and storage solutions for completed goods which could pose a fire risk in factories.  We are also calling on Primark to commit to ensuring that any government support will be prioritised for workers as well as commitments to ensuring that the unequal and unethical practices of the global garment industry will be adapted to ensure that going forward, workers in production countries will be afforded greater resilience to the negative effects of similar events.

Primark has said that where suppliers need new sources of credit – i.e. money – they would seek to assist by, for example, initiating conversations with international lenders and liaising with governments. We want Primark to work to support a global and national response to the crisis, but this is simply shifting the responsibility away from them! Not good enough Primark!

Putting workers in supply chain at risk

Asda

Asda is cancelling a quarter of orders with clothing suppliers. In addition, they have announced they will only pay a fraction of costs for these cancelled orders- 30% of the order value for those that have not yet been finished, and 50%  for those that have. This is despite Asda seeing record food sales during the COVID-19 pandemic.

Next steps:

We need to continue to put pressure on Asda to pay for the orders that they have already placed and pay the originally agreed amounts to the original terms. We are also calling on Asda to commit to ensuring that any government support will be prioritised for workers as well as commitments to ensuring that the unequal and unethical practices of the global garment industry will be adapted to ensure that going forward, workers in production countries will be afforded greater resilience to the negative effects of similar events.

Arcadia

Arcadia, which owns Topshop, Miss Selfridge and Dorothy Perkins, is estimated to have cancelled in excess of £100 million of orders, including clothing that has already been made but not yet shipped. In a further move, Arcadia is demanding a 30% discount on goods that were already in transit on 17th March 2020.

We have also heard reports that Arcadia may have furloughed all or most of its Corporate Social Responsibility (CSR) team – allowing these critical decisions on worker livelihoods to be led by other departments.  Is this a sign of Arcadia’s lack of genuine commitment to ethical trading?

 

What next: Arcadia have defended their decision to cancel existing orders and demand discounts on goods already shipped. Arcadia must pay for the orders that they have already placed and pay the originally agreed amounts to the original terms. We are also calling on Arcadia to commit to ensuring that any government support will be prioritised for workers as well as commitments to ensuring that the unequal and unethical practices of the global garment industry will be adapted to ensure that going forward, workers in production countries will be afforded greater resilience to the negative effects of similar events.

Boohoo

There are reports that Boohoo workers are fearing for their safety as they are still required to work. Usdaw Union general secretary said ““We have been inundated with serious concerns from our members in the Burnley warehouse about their health and safety during the coronavirus outbreak.” Boohoo’s sales have increased by 44% to £1.23bn, yet while they build their profits, their workers fear for their lives.

Next steps: We are calling on Boohoo to put their workers before their profits. Brands that continue to operate must comply with World Health Organisation guidance on social distancing and PPE to prevent the spread of COVID-19. Workers who stop working due to COVID-19 risks should not be penalised and Boohoo should ensure that all workers can stay at home if they have systems, without risking their wages or their employment. We are also calling on Boohoo to commit to ensuring that any government support will be prioritised for workers as well as commitments to ensuring that the unequal and unethical practices of the global garment industry will be adapted to ensure that going forward, workers in production countries will be afforded greater resilience to the negative effects of similar events.