WWD Digital Daily

Group Calls for Brands to Pay Contributi­on to Help Workers in Asia

- BY ROSEMARY FEITELBERG

In an effort to help compensate factory workers whose incomes have been dented due to the COVID-19 shutdown, the Asia Floor Wage Alliance is calling on brands to pay up.

A firestorm of media coverage was sparked in March due to factory workers in Bangladesh losing wages after numerous American and European brands canceled orders or suspended overseas production as a result of the coronaviru­s. Two months after that #PayUp campaign targeted companies for not yet compensati­ng workers in Bangladesh for lost wages, 15 brands agreed to pay for back orders, totaling more than $600 million in Bangladesh. Adidas, H&M, PVH and Uniqlo were among the companies that agreed to do so.

The AFWA is challengin­g how garment supply chains in Asia have responded to the pandemic in its second “The Emperor Has No Clothes” report. The global labor and social alliance group has been monitoring the impact of COVID-19 on garment factory workers in Cambodia, India, Indonesia, Myanmar, Pakistan and Sri Lanka through on-the-ground reports from AFWA Partners and allies. For shortterm relief, the AFWA is calling on brands to make a one-time “Supply-chain Relief Contributi­on,” wherein companies will pay an additional 2 percent of their past annual sourcing that will be passed on to suppliers to pay workers directly.

Looking further out, brands should commit to a fair price or premium that ensures that workers are paid a living wage and social security, as well as safeguardi­ng freedom of associatio­n, according to the AFWA.

Executives at Gap, Walmart, Mothercare, Bestseller, C&A, Kohl’s and URBN — some of the brands affiliated with the #PayUp campaign — could not be reached immediatel­y for comment Tuesday.

Citing media reports, the AFWA said millions of garment workers across

Asia including 2.1 million in Indonesia and 1 million in Bangladesh have faced indiscrimi­nate layoffs due to the shutdown. They have been triggered in part due to the lack of financing to continue production or material shortages. Market uncertaint­y is another factor. In addition to layoffs, furloughs are being used in some cases as a strategy to avoid severance pay in Indonesia, according to the AFWA report.

The report questions pandemic-related compensati­on plans for displaced workers in different countries. In India, for example, the government has announced plans for a package of INR 20 lakh crore, which is 1.1 percent of the GDP, to provide free food grains, loans, credit and cash relief for certain workers and to generate employment for migrants returning to rural areas through the Mahatma Gandhi Nationsl Rural Emplyment Guarantee Scheme. This package does not offer any specific support for garment and textiles workers, and is considered to be “highly insufficie­nt” in mitigating the humanitari­an crisis, according to the AFWA.

The report also claims that trade unions are concerned that the COVID-19 crisis will lead to a spike in child labor, bonded labor and human traffickin­g, with garment workers moving to other occupation­s including sex work.

AFWA is looking ahead to how the shutdown could lead to a realignmen­t of production with many companies. Noting how current production is primarily geared toward completing orders, making samples for the upcoming year and meeting demand for PPE, the group cited how brands have decreased new orders considerab­ly. The canceling and postponeme­nts of orders has hamstrung many suppliers in garment-producing countries that operate on wafer-thin margins, according to the AFWA.

Acknowledg­ing how the pandemic has forced some fashion companies to file for bankruptcy, the report speculated that in the post-pandemic world, brands may be inclined to adopt near-shoring to reduce lead times and invest in digital technology to reduce uncertaint­y.

Asia Floor Wage Alliance estimated millions of garment workers have faced layoffs due to canceled orders and suspended production.

 ??  ?? Women in PPE at an apparel factory in Bangladesh.
Women in PPE at an apparel factory in Bangladesh.

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