Oxfam led investigation found that 10 leading Australian fashion retailers operating – Best&Less, Big W, Cotton On, H&M Group, Inditex (Zara), The Just Group, Kmart, Myer, Mosaic Brands (Noni B) and Target Australia – the purchasing practices of these fashion brands and retailers has a detachment between their private ratings and their supplier factories – signifying a failure to understand the effect their decisions have on readymade garment (RMG) manufacturers and workers.
Working with research partners at Monash University and the University of Liberal Arts Bangladesh, the apparel retailers and their Bangladesh apparel suppliers were surveyed and interviewed to develop a relative ranking of each brand’s purchasing practices.
Amongst the responses, the fashion brands that partook in the research constantly rated themselves higher compared to the rating RMG factories gave them.
The ‘Shopping for a Bargain’ report found H&M Group performed fine in terms of overall rating (3 out of 4). ‘0’ represents a very poor rating (worst possible score), and ‘4’ represents a very good rating (highest possible score). Big W, Kmart and Target Australia were all rated the same (2.5 out of 4), followed by Cotton On, Inditex (Zara) and Myer with an average rating of 2 out of 4.
The survey outcomes show that participating factories rated The Just Group and Mosaic Brands (Noni B) as the poorest performers, while the biggest inconsistency among the self-rating of the brand and the factory rating was Best&Less.
Though apparel brands demanded they ‘never’ or ‘rarely’ dismiss a relationship with a RMG factory because of price, 100% of RMG factory respondents said brands always axe their relationship with the factory or change the order to another apparel factory when the supplier is incapable to meet the buyer’s demands for a lower price.
The report says that “H&M Group’s relatively high rating – expressively higher than both its fast-fashion competitor Inditex (Zara) and the mid-range retailer, Myer – advocates that when a consumer pays more for their clothing, does not mean they have been produced sustainably and ethically, or that workers were not exploited and received a better wage.”
The report also calls for extra transparency from the worst-performers, advising them to publish their supplier factory lists and make a trustworthy, public commitment to pay a living wage to RMG workers in their apparel supply chains.
While praising Best&Less, Big W, Cotton On, H&M Group, Inditex (Zara), Kmart and Target Australia for making promises guaranteeing the payment of living wages to RMG workers in their apparel supply chains, researchers also caution these commitments risk becoming mere lip-service.
These brands continue to involve in aggressive price negotiations and other practices that lower prices, making it dreadful for apparel factories to increase RMG workers’ wages or conditions.
For example, though apparel brands demanded they ‘never’ or ‘rarely’ dismiss a relationship with a RMG factory because of price, 100% of RMG factory respondents said brands always axe their relationship with the factory or change the order to another apparel factory when the supplier is incapable to meet the buyer’s demands for a lower price.
40% of the RMG factories in the study said they have acknowledged orders at a price under the production cost to garments compliant with the brand’s private minimum standards.
Around 80% of RMG suppliers surveyed reported that brands often apply relentless-pressure negotiating strategies to lessen apparel price – including exposing the prices they were offered by other factories, or taking a “take it or leave it” on pricing.
Besides 40% of the RMG factories in the study said they have acknowledged orders at a price under the production cost to garments compliant with the brand’s private minimum standards.
Erroneous forecasting by western apparel brands also put astonishing pressure on apparel factories to cut costs, regularly by setting irrationally high production timelines and targets for RMG workers, demanding overtime beyond legal limits, sub-contracting to unauthorized apparel factories where brands have no visibility of conditions or wages, and failing to provide training or make necessary health and safety improvements.
Crucially, it also results in factories either employing too many workers or not enough. “Either way, the costs of adjusting to orders that are significantly larger or smaller than originally forecast are borne by the factory management, with significant impacts on the people who make our clothes, particularly women.”
Raising serious concerns
“Our findings raise serious questions about the commitment of brands to ensuring workers in their supply chains are paid living wages and work in safe and decent conditions,” the report say.
“Even those brands that pay factories just enough to produce orders compliant with the brand’s own minimum standards, are still not paying enough to enable real progress toward ensuring the women who make our clothes are paid a living wage,” it adds.
With the exception of four factories supplying Target Australia, H&M Group and Inditex (Zara), the rest of the factories surveyed were completely unaware of the living wage commitment of the brands they supply.
Oxfam is calling on brands to act urgently to improve their purchasing practices to reduce their exposure to human rights risks in their supply chains and improve the lives of the women factory workers.