Pakistan Textile Journal.January index

EU buyers’ requirements: Development of social requirements in the garment sector
by CBI Market Information Database.

During the last decade the textile industry is highly associated with and criticised for poor labour conditions, often resulting in much media tumult around so-called “sweatshop” conditions in textile plants in several developing countries. As a result, European consumers and companies are concerned about labour conditions of the employees, who have made the garments they buy. Consequently, European importers and retailers place emphasis on social standards as a criterion for trade. It may be not surprising that several instruments are developed to demonstrate social sound business practices, often through the whole textile supply chain. As a consequence, manufacturers and exporters in developing countries should be aware of the developments, because being trading partners, they are included in the chain. Another development is emphasis on the health and safety of consumers of the end product; a product must not threaten human health.

In Europe and the US, textile and garments production is often associated with unhealthy working conditions, low wages, dangerous substances and even child labour: so called sweatshop conditions. This industry is highly internationalised and labour-intensive is located mainly in developing countries and operates a sophisticated sub-contracting system. During the last 30 years, incidents of deteriorated labour conditions of workers along the supply chain – through an increase of informal work in sweat shops and at home, through child labour and through an extension of ‘Export Processing Zones’ to many parts of the world – have been brought into the open through Western media.

Several non-governmental organisations (NGO’s) responded by actively demanding retailers to live up to their responsibility to ensure that garments are produced under decent conditions. These organisations started to follow closely the companies’ activities and are not afraid to seek media attention for any abuses by e.g. press releases, internet and TV. In the US NGO’s such as CorpWatch and Sweatshop Watch are active. In Europe, the Clean Clothes Campaign (CCC) is very active in this field1. Above all, these NGO’s use consumers’ power by mobilising them on the issue of working conditions in the garment industry.

The textile sector responded, individually or sector-based, to public pressure in order to rehabilitate its corporate image. Several instruments are used to demonstrate social responsibility: labels, codes of conduct and management systems are applied by many textile companies. Moreover, several companies developed their own brand label or code of conduct to pay attention to their business responsibility. Other companies apply labels, certificates and/or codes of conduct that are more or less independent and internationally known.

Codes of conduct, defined as ‘’voluntary commitments of companies or associations on certain standards and principles for the conduct of business activities in the marketplace’’, are booming in the textile and garment industry since the 1990s.

In a review of the OECD (June 2000) 246 codes of conduct were listed. Of these 246 codes 37 relate to the textile and garment industry. Five of these codes were developed by coalitions of stakeholders (such as trade unions, NGO’s etc.) while 32 were developed by individual companies. Of the corporate or company codes, 26 are addressed to suppliers and contractors.

This growth of corporate codes could be seen as a response of the textile and garment industry to public pressure in order to rehabilitate their corporate image. Since the early 1990s, a vacuum grew between (applied) labour legislation and the activities of mainly multinationals. Global competition at the one hand and media coverage in Western countries of labour rights violations, especially in the plants of suppliers in developing countries, have led to a negative corporate image of the main multinationals in the textile and garment industry. Codes of conduct, i.e. business principles to guarantee certain standards, are developed to demonstrate amongst others social responsibility of a company. The first codes of conduct were corporate codes adopted in the US, but soon European companies followed. Multinationals such as Nike, Levi Strauss, C&A and Hennes&Mauritz have developed their own code of conduct. Normally, codes of conduct are focussed on improving labour conditions in the whole supply chain of a company (retailer), see the examples below.

Company statements Hennes&Mauritz

Today we work with about 900 suppliers worldwide. We are committed to taking an active part in improving working conditions in the garment industry. Consequently we make certain demands on our suppliers.

All suppliers that produce our products must sign an agreement in which they commit to adhere to our Code of Conduct. The Code of Conduct sets requirements concerning compliance with local labor legislation and safe workplaces.

The Code of Conduct also makes it clear that under no circumstances will H&M accept child labor, enforced labor or discrimination amongst employees. Our production offices have full-time inspectors who inspect our suppliers and their subcontractors regularly to ensure that the requirements of the Code of Conduct are being respected. Should the inspectors find any shortcomings in this respect, an action plan is drawn up together with the supplier. Repeat inspections ensure that improvements are made. As a last resort, if the supplier does not implement the agreed upon improvements, co-operation with the supplier may be terminated.

Although corporate codes of conduct stand for companies taking up their own responsibility towards socially accepted business, a main concern is that in many cases companies use their corporate code as another instrument of public relations. Presently companies are pressured by NGO’s and trade unions to refer to international standards on labour conditions and to include systems of monitoring and (independent) verification. Only these tools can implement corporate codes of conduct in such a way that a company takes up social responsibility in the production chain and labour practices are actually improved. Therefore, NGO’s are still engaged in pressuring companies toward independent verification of conduct codes, while the monitoring results should be open to the public.

Another concern is the amount of codes. For suppliers from developing countries, this does not make trading to the EU more transparent and easy. In practice suppliers are confronted with several codes of conduct, implying different standards as well as procedures of compliance and audits.

A new development that might have a positive impact on the concern of lack of credibility is that also textile branch organisations follow the trend. This means that within a branch the same standards and monitoring systems could be used. This would harmonise the requirements within the sector.

A good example is the German branch organisation of textile wholesalers (AVE) who has introduced a common code of conduct in cooperation with the Netherlands branch organisation VGT. This resulted in the Business Social Compliance Initiative (BSCI) which aims to create a minimum standard fro retailers and a common European monitoring system for social compliance.

Organisations such as trade unions, NGO’s and other interest groups have developed model guidelines to be used by companies or sectors. These guidelines are also being used in the textile sector.

The earlier mentioned Clean Clothes Campaign has developed a set of social standards relating to labour conditions, called the CCC Code. This code of conduct is specifically developed for the textile sector and was adopted in 1998 after close consultation with worldwide partners and international union organisations. The CCC Code refers to the internationally accepted labour standards of the UN International Labour Organisation (ILO).

Whereas social standards on labour conditions focus on the production process of textile products, labels are used to provide information about certain aspects of a product or its production process. The label on a product enables consumers and business partners to take these aspects into account when choosing their products. In the textile industry attention is paid to another side of social aspects, being the health and safety of consumers.

A well-known label focussing on health and safety standards with regards to consumers is Öko-Tex 100. The criteria of this label restrict hazardous substances in the finished product. Harmful substances may have some kind of effect on people or, according to current scientific knowledge, be unsafe to human health. The criteria go beyond the European product legislation. This means that a product, which has passed the Öko-Tex test, does not contain any substance that is banned by European legislation. For this reason, an increasing amount of importers demand an Öko-Tex certificate in order to prevent legal risks.

Thousands of certificates have been applied for by companies throughout the world. The last couple of years, the amount of applications from companies in developing countries has grown fast. Other labels concentrate on environmental standards, such as the EU-Ecolabel Textiles (environmental production standards) and the EKO label for organic textiles.

A well known internationally accepted instrument for implementing social accountability is the SA8000 initiative for a social management system. A management system is an organisational structure, defining responsibilities, procedures, processes and provisions for the establishment of certain goals. As many codes of conduct, SA8000 is based on the internationally accepted ILO labour standards, but contrary to codes of conduct SA8000 includes tools to implement social standards in the whole system of a company. With a management system in place continuous improvement on social standards is possible.

SA8000 is gaining ground in many industries worldwide because it is the only internationally accepted management system for implementing en monitoring social standards for labour conditions, developed by an independent organisation. Therefore, SA8000 is seen as a possibility to harmonise social standards. In the textile sector the SA8000 system is applied or taken as an example in order to improve labour conditions.

Looking at the developments on social responsibility in the textile industry, many initiatives are in place in order to improve labour conditions in the industry worldwide. Manufacturers in developing countries should be aware that social issues are getting more importance and will become a prerequisite in international trade. Often being part of the product chain, while being a supplier to other companies in the textile sector, they are part of the development in Europe and the US where labour conditions in developing countries is an important issue.

Companies that are pressured in Europe by ngo’s and consumers to sell socially sound garments, develop their own code of conduct, or subscribe to other codes, labels or management systems. This often means that the social standards will be applied in the whole chain, including trading partners in developing countries. In practice, social standards are not the only requirements; environmental and consumer health and safety concerns have led to other standards in this fields. This means that many market requirements could be of importance when accessing the European markets.

Please note there are many initiatives on improving labour standards in the textile chain. On the one hand there is a growing amount of codes of conducts, but initiatives to harmonise standards and monitoring systems can be seen as well. Therefore it is important to stay updated on these developments when trading textile/garments to the EU.