Even Largest Companies Struggle to Get Information Deeper in Supply Chains
Although garment companies are motivated to learn more about working conditions and environmental practices deeper into their supply chains, most cannot find out what the vendors three and four steps down are doing, according to Sheng Lu, an associate professor of fashion and apparel studies at the University of Delaware.
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Lu, who was speaking on a panel during an Organization for Economic Cooperation and Development forum on due diligence in the garment and footwear sectors, said that "even though we think fashion brands are very powerful ... there might be some limits of their influence over their supply chain." He said that a company with $9.2 billion in annual sales shared information with him about their efforts to survey their second-, third- and fourth-tier suppliers, and that about half didn't answer their questions. Even such a large company didn't have enough leverage to get suppliers to its suppliers to respond to questions, he said.
Lu said there are many barriers to knowing garment supply chains -- their diversity, the lack of cooperation from suppliers and insufficient budget to do the tracing. He gave the example of one jacket whose construction relied on 21 suppliers across seven countries in Asia; and he said that 24% of fashion brands source from more than 20 countries.
Fellow panelist Anna Walker, vice president of public affairs at Levi Strauss and Co., said that her company definitely has a diversity of suppliers, with 448 tier one suppliers, including 75 textile mills, and 559 suppliers overall. "No one country has more than 20% of our production," she said, and Levi sources in about 30 different countries.
Walker said Levi has been publishing all of its tier one suppliers since 2005, and now also publishes its textile mill partners. She said that some inside the company worried that disclosing the names would make the company a target for nongovernmental organizations focused on labor rights. But she said it led to more collaboration instead. "It really only paid dividends to us," she said.
Walker said that building the business case for suppliers to comply with environmental and social goals makes the biggest difference, even more than regulatory action. "When a supplier understands the business case in making these investments in their business ... things move much faster," she said during the Feb. 22 panel.
Lu said those who want better conditions in the textile industry need to weigh the best course of action for improving the situation in countries rather than exiting from countries were there have been labor violations. He gave the example of Haiti, and said the garment industry is such an important source of jobs for developing countries, if Western companies exit, that's not the best outcome for the garment workers.