Going undercover: Retailers need to expose their own supply chain risks before media investigators

In this month’s look at modern slavery, we’re focusing on the supply chain scandals at the forefront of public attention.

Filling Our Screens

Recently, the BBC’s Panorama exposed Syrian refugee children working in garment factories supplying the likes of M&S and Asos. The programme also found evidence of hazardous chemicals in another factory and observed the covering up of illegal factory practices during auditors visits.

This important piece of investigative journalism adds to a long list of labour-related scandals that have implicated almost every industry and corner of the world. The apparel industry especially, and its “fast fashion race to the bottom”, is one of the biggest concealers of modern slavery and other unethical practices.

Transparency and Traceability

The Modern Slavery Act is a huge step towards pushing ethical trading higher up the agenda. The question is whether this new legislation can permeate deep enough of the supply chain to reach the most hidden illegal practices.

How far are retailers expected to go? In a report by advocacy organizations Fashion Revolution and Ethical Consumer, the meaning of true transparency is spelled out clearly: “Companies know who makes their products – from who stitched them right through to who dyed the fabric and who farmed the cotton.”

Indeed, forward-thinking clothing companies like Patagonia are owning up to their production strategies, and even making them part of their brands’ identities.

The Vicious Cycle

What about brands who are playing catch up to the ethical frontrunners? As a Benetton executive told the Wall Street Journal, the company works with seven hundred suppliers to meet the demands of the fast-fashion market.

To comprehensively monitor a typical retail supply chain like this is a staggering feat.

The majority of breaches happen beneath Tier 1 factories, with worker welfare decisions being made by (many corrupt) factory owners under pressure to meet retailer demand. Retailers in turn fear the squeeze on shareholder profits if prices are raised, while vulnerable workers have no choice but to accept the very worst conditions.

What More Can be Done?

Auditing and remediation measures are key factors in improving this toxic system, and echoed in the Fashion Transparency Index survey. Onsite and offsite factory audits should be far more effective at tapping into the worker voice; they need to be as penetrating as the investigative journalists with their ear to the ground who find ways to record illegal operations and interview mistreated workers.

Large migration populations, in what is now a long-term crisis, should prompt retailers to conduct stronger due diligence to avoid being linked to forced labour. The RTW Assessment is playing a major role in several major brands’ efforts to tap into the worker’s own voice for an accurate picture of factory floor level practices.

Retailers have the opportunity (and purchasing power) to ask for certain transparency measures from their suppliers at any stage of the relationship. Many suppliers are beginning to actively initiate ways to meet ethical standards within their operations, to promote a more trusting retailer/supplier relationship. The rewards for the supplier can be significant, including greater independence and reliance on self-auditing.

The Media Attention is Not Going Away

The recent migrant crisis and repeated stories of labour mistreatment in both developed and developing countries have made the plight of supply chain workers impossible to ignore. If household giants such as Walmart, Carrefour, Costco and Tesco are using suppliers who rely on slaves, no brand is immune to reputation-damaging practices in their supply chains.

Granted, the camouflage provided by layers of factory sub-contracting and easily manipulated audits makes it very hard for large brands to spot risks within their own supply chains. But neither can the retailer afford to be the target of a media investigation revealing labour mistreatment under their watch.

Finding the risks and wrongdoings before tragedy occurs or national TV exposure should be of the highest priority from every business angle, moral and financial.