Frilco Philippines Corporation

We can’t leave global workers in the lurch

By May 13, 2020News

By Kevin Thomas, SHARE CEO 

As an organization that engages actively with corporate management on solving pressing environmental, social and governance issues, we know that solutions are not always as easy as they first appear. As an exercise, we often practice imagining ourselves on the other side of the table, trying to solve multi-faceted problems with limited resources, multiple stakeholders, and time pressures that constrain our choices.

It’s not enough to have ideals: we need to have good ideas that can actually be implemented.

That has become even more critical in our current context. When SHARE started looking at the question of how workers in global supply chains are being impacted by the pandemic and the related economic crisis, we knew three things: a) that this is a crisis that is having devastating and unequal impacts on those workers, as compared to workers in countries with better social safety nets; b) that the capacity to act will be limited by the very real financial challenges retailers and brands are facing right now; and c) that real solutions are going to take collaboration and coordination.

But we also knew that the crisis for those workers is very real and very immediate, that inaction is not an option, and further, that what happens now in global supply chains is part and parcel of business continuity issues for retailers and brands, not a separate and isolated issue.

So on May 12th, SHARE and the Retail Council of Canada hosted a special online meeting for Canadian companies that are grappling with the question of how to act responsibly in global supply chains. Our discussion featured presentations from the Ethical Trading Initiative and PVH Corporation, both of whom shared real-world experience and lessons from the front lines of the supply chain crisis, and answered questions from the companies on hand.

Three critical priorities related to the COVID-19 crisis quickly emerged from the meeting:

  • First, that the responsible thing to do is pay suppliers for work that was already in progress, as well as finished work. To do otherwise is to leave the most vulnerable workers in the lurch. And despite the crisis, or in fact even more so because of the crisis, international norms of decent work still have to apply to company conduct in their global supply chains.
  • Second, there is a need now to engage with international financial institutions to inject liquidity into the sector in key countries while demand is low due to COVID restrictions. While individual companies may not have the ability to solve this problem, they do have a voice on the matter.
  • Third, as we look to the future, companies need to use that voice, collectively, to advocate for new social protections in priority countries, to build a safety net for workers who currently have none.

The good news is that some of that work is being done at the international level including through the Call to Action from the International Trade Union Confederation, the International Organization of Employers, and the International Labour Organization, and that Canadian employers can endorse that work as well. Getting behind that work is what will help to build more resilient and reliable supply chains for the future, and will help address the extreme vulnerability faced by workers in many of the factories that produce the goods we rely on.

The other good news is that there are resources out there now with practical guidelines for addressing worker rights in the supply chain during COVID. A few of these are listed below. Multi-stakeholder efforts to identify and organize practical responses are even more important now, when individual retailers and brands face their own resource constraints.

In addition to facilitating dialogues like the above, SHARE is engaging directly with companies in our clients’ investment portfolios on how they are addressing these questions in their own operations and supplier factories.

Given the severity of the impact that COVID-19 has had on the garment sector and its supply chain, SHARE has identified the sector as a high priority for engagement. These engagements primarily focus on companies’ efforts to maintain responsible relationships with suppliers. This includes, for example, taking steps to share the costs and burdens of the crisis with suppliers in order to protect vulnerable supply chain workers. We have been urging companies to honor orders that were completed or in production, to work closely with suppliers to ensure that suspended or terminated workers receive appropriate severance pay and, to encourage active and constructive dialogue between suppliers, workers and trade unions. We ask companies to show leadership by participating in collaborative and multi-stakeholder initiatives, as an opportunity to share and learn from best practices in the industry and to advocate for governmental intervention to support local suppliers and workers.

When SHARE’s team engages with these companies, we recognize the challenges that they’re facing right now. But we also know that the answer isn’t avoidance. Rather, it’s to work together: to reach out to suppliers, worker representatives, investors, and other companies and multi-stakeholder initiatives to create practical solutions for now and the future.

Resources

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