Joe Fresh and other Canadian Brands caught up in Bangladesh Ethical Sourcing Tragedy

Today we learned of the devastating collapse of a factory building in Bangladesh, in which some well-known Western brands, such as Joe Fresh, were having their clothing manufactured.  While our sympathies are with the victims and their families, this tragedy brings into focus how important it is for companies who are manufacturing items overseas and domestically to have robust auditing and sustainable and ethical purchasing practices.

This is not the first such tragedy in Dhaka. Just five months ago, a fire killed 112 people in another garment factory. Faulty electrical wiring combined with few and narrow exits were to blame for the deaths. A year before the incident, the factory was purportedly flagged with an “orange” grade by a Walmart ethical sourcing official for “violations and/or conditions which were deemed to be high risk”.  Yet, major brands such as Benetton, Children’s Place, Mango and Walmart were all associated with this tragedy.

Here at home we’ve also seen the effects of poor working conditions ending in tragic situations. Examples such as the mushroom farm in Langley, BC where three people died and two suffered permanent brain damage when entering a pump shed where toxic gas had accumulated. The farm’s composting facility had been operating without an occupancy permit and the Township of Langley had reportedly been trying to shut it down for two years. When manufacturers cut corners and ignore warnings about safety for the sake of their profit margin, they endanger their employees.

Factors like fair pay, good working conditions, health benefits and banning child labour are strategic supply chain issues. Making sure that buildings are in safe and operational condition with no violations is just as imperative as banning child labour, or ensuring fair pay. Responsible sourcing across a supply chain is a process of continual improvement. Working to put the right steps and measures in place takes effort. But the downside risk to a brand when things go bad can sometimes be too much to recover from. Too often, a public relations department is left scrambling after unfortunate events such as this one in Bangladesh, and in 2013 we are still hearing far too often of families left destitute and grieving.

Reeve Consulting is a boutique consultancy that helps clients enhance their brand, their profitability, and their social license by working with them to strategically re-think how they approach the ethical and environmental issues affecting their supply chain.

Message from Earth: Organic Matters

This week we’re bringing you a re-post from our friends at Fairware, a distributor of ethical and sustainable promotional products. Reading some of the latest posts on the Product with Purpose blog, we were particularly taken with the following video by Fairware supplier Anvil Organics. Highlighting the sustainability merits of organic over conventional cotton, we thought it was a nice summary of the issue and of particular relevance to our readers considering sustainable programming for uniforms, corporate gifts and give-aways.

We were impressed by this digital short created by one of our suppliers, Anvil Knitwear. The short video released at Farm Aid 25 last October, highlights the impacts of pesticide use on the environment and farmers, encouraging consumers to support organic farming practices.

Anvil Knitwear has made a commitment to double organic cotton production in the US through an agreement with the Texas Organic Cotton Marketing Cooperative. Along with Disney LLC, they’re hoping to encourage conventional cotton farmers to switch to organic methods by offering a premium for their yield.  Anvil will also purchase any of the cotton making the transition to organic at a price close to that offered for organic. Read more about Anvil’s project to plant the seeds of change HERE.

Fairware is proud to carry a full line of Anvil organic apparel. Browse our site or contact us for more information.

Play Fair 2012: Advocating for workers’ rights in London 2012 and Olympic supply chains

Flickr / Michael Francis McCarthy

Millions of people are employed in the global supply chains that produce souvenir Olympic apparel and athlete uniforms. Through the Play Fair 2012 campaign, a consortium of unions, advocacy groups and non-profit organizations have come together to advocate for the rights of these worker’s.

Building on the original PlayFair 2008, the 2012 campaign is asking organizers of the London 2012 Olympics and global sportswear brands to ensure internationally recognized labour standards are upheld in the production of all materials with the Olympic logo. These include the International Labour Organization’s (ILO) Core Conventions and the Ethical Trading Initiative’s Base Code – standards encompassed by the ILO’s concept of Decent Work.

Progress to date: London 2012 and the International Organizing Committee

In addition to outlining a full Sustainable Sourcing Code and Diversity and Inclusion Business Charter, the London organizers have included the labour standards in the Ethical Trading Initiative base code in their contracts with suppliers. Play Fair 2012 is asking the commitment to ethical sourcing go further, by including stronger labour standards, transparency in factory auditing and a clear course of action for workers reporting abuses.

More than pressuring London 2012 organizers, the Play Fair campaign is asking the International Organizing Committee to promote workers rights in all future Olympic events. The IOC is being asked to include respect for workers’ rights in the Olympic Charter and Code of Ethics as well as in all contracts with companies supplying the games.

playfair2012.org

The PlayFair 2012 website features resources, news stories, event listings as well as a number of informative videos (including a particularly entertaining spoof on setting the world record for hat wearing). Site visitors can participate in the campaign by sending an electronic message to major brands of the Olympics, asking them to raise the bar on workers’ rights. UK-based supporters can also participate in Workers’ Rights Days, a series of free workshops, panels and interactive sessions focused on educating people on workers’ rights in apparel factories around the world.

Pressure is mounting on London and future organizing committees (e.g. Socchi, Rio de Janeiro) to continue the responsible sourcing work started in Vancouver. This is a large topic and complex field.  Reeve Consulting will be actively monitoring developments in ethical and sustainable purchasing for Olympic Games and updating our readers as London 2012 approaches.

Cotton Supply Chain: organic & fair trade sustainability in the global market

2010 was a record-breaking year for cotton prices in global markets. In this post, Reeve Consulting presents an overview of recent market activity, considers the implications for working and environmental conditions in the supply chain and takes a look at how organic and fair-trade cotton sectors are fairing. We finish with a few suggestions for corporate and governmental purchasers looking to reduce brand risk and improve ethical and sustainable purchasing practices when it comes to cotton goods.


Flickr / kimberlykv

Cotton is the largest non-food crop in the world with over 24.3 million tonnes consumed worldwide annually. Did you know it’s also the largest employer? From farm workers to retail employees, an estimated 1 billion people are involved in the growing, processing and selling stages.

Given the ubiquity of cotton, it’s significant that 2010 was an unprecedented year for the commodity in global markets. The price doubled in a year and broke the $1 (U.S.) per pound level for the first time in 15 years.

Globe and Mail / Bloomberg

Rising prices affects the entire supply chain

A number of factors have been attributed to the sudden price increase, a main one being poor weather conditions in top growing regions, including floods in Pakistan, a severe cold snap in China, crop-killing hailstorms in Texas and, more recently, flooding in Australia. Speculation has played a significant role, as well as export restrictions put in place by India (the second-largest cotton producer) to protect domestic supplies and prices.

Consequently, the clothing sector is feeling the squeeze of both increasing input costs and a weak consumer environment. According to media reports, the prices of jeans, t-shirts and other cotton apparel will likely increase 2 – 15% in 2011.

Clean Clothes Campaign

To avoid passing a price hike to consumers, clothing companies may reduce costs by mixing in less expensive, synthetic fibers or by decreasing pack sizes on smaller bulk products like socks. Of greater concern is that companies will move production to lower wage countries with lower duty tariffs and weaker environmental restrictions. As examples, consider how garment workers demanding a fair minimum wage are currently being treated in Cambodia and Bangladesh. Anticipating such tactics, the Ethical Trade Initiative released a statement in late-September urging retail buyers to factor in the cost of a living wage for workers in their price negotiations with garment suppliers.

Organic cotton prices are linked to conventional cotton prices

A recent edition of Engage, an e-newsletter published by the Organic Exchange, takes a close look at the organic cotton industry. The opening article suggests the extraordinary times experienced by conventional cotton have on the one hand created a beneficial seller’s market. At the same time these conditions have had a potentially damaging impact on the sector by leveling the price of organic and conventional cotton. As the Organic Exchange (OE) puts it:

“Farmers are seeing their carefully tended organic harvest end up in conventional supply chains. Organic cotton procurers are struggling to meet their usual premium commitments (which don’t make sense anymore) and on top of this the lag time for organic buyers to respond to the market is adding a further complication.”

The article concludes that if organic cotton is to be secure in a stable, appropriate value chain it needs protection from the dramatically changing commodity price. This could come in the form of working partnerships that deliver benefit to farmers as well as buyers.

This concept is further covered in a recent article in the World of Organic Agriculture – Statistics and Emerging Trends 2010 journal:

“The sector must address the protection of the farm and fiber business model to ensure farmers and those who work with them receive sufficient returns to maintain investment in farmer development and productivity.”

Protection from the commodity market rollercoaster

A number of programs have attempted to protect cotton from market conditions. Perhaps the best known is the fair trade movement.  We’ve written a number of posts on the Reeve Consulting blog about the new garment certification program unveiled in 2010 by Fair Trade USA. For the first time the full supply chain of a product, not just the agricultural inputs, can receive fair trade certification ensuring workers are paid a fair, living wage for their goods and services. While only a handful of brands have completed the certification process, recent reports indicate more companies are working with Fair Trade USA to acquire certification.

Flickr / kimberlykv

Another example can be found in the recent commitment by Anvil Knitwear to double the production of organic cotton in the U.S. Through the Texas Organic Cotton Marketing Cooperative, Anvil will pay a premium for organic cotton as well as purchase any cotton making a transition to organic at a price close to the premium. The hope is that having a guaranteed buyer will encourage conventional cotton farmers to switch to organic production.

Social Alterations, an online education lab for socially responsible fashion design, has also focused on this issue and recently shared a post outlining approaches undertaken by two other global commodities – coffee and cocoa – that have similarly attempted to address the volatility of global commodity prices.

Purchasing cotton responsibly: ethical and sustainable purchasing considerations

When it comes buying cotton goods, purchasing departments can reduce risk and improve supply chain practices by considering the following:

  • Making a formal commitment to specify and support sustainable forms of cotton in purchasing decisions (e.g. organic, fair trade, ethically sourced)
  • Considering the origins of cotton goods including. More specifically, the working and environmental conditions under which they were made
  • Investing in long-term relationships with suppliers and focusing on continued improvement

To learn more about how our clients and organizations are benefitting from these and other sustainable supply chain practices contact us.

Fair Trade Certified Apparel Now Available

Flickr / Shared Interest

In early-May Reeve Consulting reported that Fair Trade Certified jeans and t-shirts would be available in the United States this fall. After more than 3-years in the works, Trans Fair USA’s apparel pilot program has certified it’s first cotton garments.

Previously only the agricultural inputs of products, such as cotton, could be Fair Trade Certified in the United States. This new certification for Apparel and Linens is the first social, economic and environmental standard that directly benefits workers at both ends of the supply chain – the farmers who grow the cotton and the workers who sew the garments.

The new standard has two parts:

Obligations of Factories, which includes Fair Trade management systems, core labor standards from ILO Conventions and multi-stakeholder initiatives; and,

Obligations of Buyers, which explains the requirements for US companies interested in using the Fair Trade Certified label on cotton products.

Fair Trade garments for uniforms & corporate team apparel

Flickr / Wonder Mike

While there are many companies still undergoing the certification process, a number of early adopters, Maggie’s Organics, Hae Now and Tompkins Point Apparel, are currently selling Fair Trade Certified apparel (mainly shirts) through their online stores. All companies offer styles that would be suitable additions to uniforms and corporate team apparel, ship to Canada, and offer wholesale discounts for larger orders. We at Reeve Consulting look forward to seeing a broader style selection of Fair Trade apparel emerging over the coming months.