'Fashion crisis' hits developing world as a result of COVID-19

Unsurprisingly, given the closing of retail outlets across the developed world, the Covid-19 pandemic has caused a huge drop in demand for clothing. While this creates financial challenges for brands and retailers, corporations have a responsibility to manage the crisis responsibly and honour obligations to suppliers and workers.

However, many brands and retailers have responded to the crisis by cancelling (or “holding”) orders, or by demanding retroactive price reductions for goods already in production or completed and ready to ship. In some cases, brands have demanded large rebates, even on orders already in transit.

This is leading to large-scale dismissals of garment workers in developing countries, and to the inability of many companies in these countries to pay their workers. Many of these workers already work for low wages in poor conditions. With little or no social protection, this loss of income leaves garment workers and their families in an incredibly vulnerable position.

For example, the garment industry accounts for more than 80 per cent of Bangladesh’s exports and so is obviously a cornerstone of its economy. Over 1,100 factories there have reported cancellations of orders worth more than $3 billion, directly impacting the lives of 2.2 million workers and their families. 56 per cent of Bangladeshi garment workers are women aged 18 to 25.

Several brands and retailers have committed to pay in full for orders in production or completed. This is commendable, and will help to reduce negative effects on suppliers and workers. However, many others have not made this commitment, or are cancelling some or all orders, or attempting to impose rebates.

The Workers Rights Consortium, in association with the Center for Global Workers’ Rights at Pennsylvania State University, are monitoring and reporting on the positions of leading corporations. They have created this helpful tracker to monitor the response of firms to the situation as it unfolds. The tracker offers a list that will continually be updated to indicate which apparel labels and retailers are paying their suppliers for orders that are in production or completed, as well as those that are refusing to do so.

As noted as part of our mission statement, Social Justice Ireland envisages a just and sustainable society where human rights are respected, human dignity is upheld, human development is promoted and the environment is valued and protected. Our understanding of justice revolves closely around the creation of ‘right’ relationships between people, institutions and the environment. This extends to the corporations and businesses we interact with when consuming goods and services. Even in ‘ordinary’ times it is important to know what kind of economic or social activities we are supporting:

• Are our pension savings invested in funds which draw returns from fossil fuel extraction or other environmentally harmful activity?
• Do the companies whose products we buy behave in an ethical manner?
• And are the clothes we buy produced in an ethical fashion, or do the brands we wear exploit workers in poor countries?

These questions are especially important during events such as a global pandemic. The globalised nature of the world in which we live and the structural disparities within it will unfortunately ensure that it is the world’s poorest who suffer most from the coronavirus outbreak. The pandemic will expose afresh the depth of the inequalities between countries.

In the midst of all that we are going through in the developed world, it can be easy to forget that there are many people who are in a far worse situation. But through our interactions with many firms and companies, we have a role to play in supporting principled action and punishing unethical behaviour.