Fashion labels fail to adequately combat forced labour in the global supply chain

Today, an estimated 24.9 million people around the world are victims of forced labour, generating USD $150 billion in illegal profits in the private economy. In the wake of forced labour abuse revelations in global supply chains, companies are increasingly expected by consumers, investors, media, and governments to maintain transparent and responsible supply chains. Although more fashion companies are implementing changes to support vulnerable workers, a new report argues that there is still significant room for improvement.

In KnowTheChain’s 2018 Apparel and Footwear Benchmark Findings Report, luxury companies Hermès, LVMH (Louis Vuitton), Salvatore Ferragamo, and Prada were among the firms the scored the lowest for fighting forced labor. Fashion companies are operating increasingly widespread and complex supply chains, which has made overseeing the rights of the labour force more complicated, opening the door for more risk of exploitation. Out of a possible score of one hundred, the forty-three brands benchmarked by KnowTheChain received a fifty-six. This was up from the previous report from 2016, in which the average was forty-nine. Ralph Lauren, Hugo Boss, and Kering all improved their scores by more than ten points. Hugo Boss, Ralph Lauren, and Burberry all scored above fifty points.

"Many luxury good companies have taken meaningful action on environmental issues and animal rights," KnowTheChain Project Director Kilian Moote said, "However, currently there is a lack of acknowledgement and acceptance that forced labor, and labor conditions more broadly, are something that impact the luxury industry.”

According to the United States (U.S.) Department of Labor, labour exploitation occurs in everything from raw material harvesting for cotton and rubber to production of apparel and footwear. About two-thirds of the international fashion workforce is female, and much of the industry is also made of migrant workers. This adds to the risks surrounding labour violations, as workers face gender or socioeconomic discrimination, making them more vulnerable to mistreatment and less apt to know about their rights or take action.

The score for engaging with workers within the supply chains is also lower, at an average of 26. This includes educating laborers, allowing them to organize and unionize and providing outlets for those working in the supply chain to communicate grievances. In China, Burberry works with a non-governmental organization (NGO) to provide a confidential hotline for workers. "The mistreatment of workers is obviously a brand business risk, but it’s also a moral imperative," Mr. Moote said, "Luxury brands are falling short in some of the areas that most of the other companies we evaluated are, which unfortunately impact workers’ lives the most. Most notably, on ethical recruitment practices.”

Country of origin is a key positioning tactic for luxury products, but growing globalization in the fashion industry is making it more difficult to differentiate the geographic source of goods. Fashionbi's "Mystery of 'Made-in' in Fashion" report notes that rather than accepting what is told to them by brands, consumers today conduct their own research into brands’ production processes. Consumers are also becoming more aware of the social and environmental impact of their clothing.